Housing startup Starcity is building largest-ever co-living space

by Kimberly Greene03 Jul 2019

Cooperative housing communities have existed for just about all of human history. Whether due to affordability issues, a desire to share workload and resources, the need for shared caregiving, or some combination of the above, there seems to be a renewed interest in the idea of true communal living, and companies like Starcity are taking advantage.

Starcity, a startup based out of San Francisco, has recently been approved to start its biggest project yet: an 18-story building with more than 800 units in San Jose, California. It will be the largest high-rise co-living building ever constructed. Rents will start in the low-$2,000s will include furnishings, utilities, WiFi, and community-building events within the development. This is similar to the company’s eight other co-living communities in San Francisco and Los Angeles that feature dorm-style housing that has been converted into living spaces from existing non-residential buildings and inefficient residences. The existing developments, however, topped out at a mere 15 units.

Zoning regulations for these types of projects, however, can make building difficult for developers as well as investors who want to get involved. In San Francisco, for example, Starcity properties are built under the group housing category. In Los Angeles, they’ve built under the multi-family category, and the spaces have required designs that fit into those parameters. The newest project, however, received its own unique co-living designation after San Jose City Council approved the rezoning application in April.

Starcity is based in San Francisco, an area that’s in a true housing crisis, and while builders nationwide have been struggling with multi-family construction in general, city officials in nearby San Jose may be more likely to do whatever they can to help ease the strain.

“We struggle so greatly just to get a shovel in the ground to get housing in the city, because construction costs are so high right now,” San Jose Mayor Sam Liccardo told Citylab. “The fact that the developer had found an approach that could get housing built was a good enough signal to me that we should get any obstacles out of the way.”

The parking requirements will be waived for the development, as well as an inclusionary housing ordinance that holds developers to building 15% affordable units or paying a per-unit fee. The waiving of the housing ordinance has some affordable housing advocates shaking their heads.

Membership organization Silicon Valley at Home acknowledged that residents were excited about the co-living opportunities, but along with some speakers and members of council, noted that the units are not really affordable in the traditional sense.

“They are not rent-restricted, and often charge rents well beyond the reach of lower-income households. The representative of Starcity explained to council that their goal was to come in at 10-20 percent below the current market for efficiency apartments, which he reported was about $2,500 for new construction in the current market,” the organization said.

Outsiders may scoff at the rents that start at $2,075 per month. Insiders, however, know that local rents are closer to $3,000 for a one-bedroom apartment, and with Silicon Valley giants expanding their employee base, competition for housing will even get more fierce.

Still, Starcity’s mission is to make cities more accessible to everyone, and San Francisco recently approved yet another Starcity development: a 270-room, 16-story building with rents starting around $800 a month. Half of the units will be affordable for renters who make 80% of area median income or lower. This makes it one of the first developments to qualify for California’s SB35 program, which offers an expedited building timeline for these more affordable buildings.

Cities are growing faster than the capacity to plan, build and manage urban housing, as well as the ability to adapt to the needs and desires of those who want to continue to live there rather than flee to the suburbs. A growing number of alternative housing solutions are emerging, hoping to fill the void left by previous housing models. There are now almost 800 reported co-living and co-housing spaces in the United States, according to the Foundation for Intentional Community, an organization that supports and promotes the development of intentional communities and the evolution of cooperative culture.

Construction for the San Jose development is set to start in the fall, of 2019, opening in late 2021.