Disruption might well be one of those terms you’re over and entirely sick of hearing about. Understandable perhaps, as the term has been popular since the 1990’s, although some would suggest due to the continued technology boom, we have so far only seen the tip of disruption. That might well be true as we see various naysayers poo pooing different aspects of disruption while, others embrace the idea with unashamed glee.
Although the two ideas are often linked, there’s sometimes confusion about the difference between innovation and disruption, even though there is a real distinction between the two. Disruptors are innovators, but not all innovators are disruptors. Innovation and disruption are similar because they are both makers and builders. Disruption literally turns an idea on its head and brings about a revolution displacing an existing market and produces something new and more efficient, creative and worthwhile.
If we reflect on the two ideas of disruption and innovation we see that: disruption means to break apart, split, shatter, break into pieces. And innovation by contrast is all about restoration, renewal, to change; to renew, to innovate a novel change, experimental variation, new things (ideas and services) introduced in an established arrangement.
The one (disruption) breaks up, blows apart and the other (innovation) renews and rebuilds. These are great notions to apply to the apartment market and I’m going to look at two ideas and both are linked to the ‘sharing economy’. Think GoGet, Airbnb and Uber, these are the big boys of the shared economy, but there are hundreds of others covering almost every imaginable service from dog sitting to finance.
Shared Apartment Living
Where and how we live, was always going to get further shaken-up in the shared economy, extending well beyond the reach of Airbnb. Here I’m looking at two examples and both are linked to how parts of the apartment market might be more widely and creatively disrupted.
The first is WeLive the partner of the now well-established WeWork. WeWork is already turning the whole approach to how and where we work upside down and is making some traditional office spaces look positively archaic. WeWork has also encouraged some big office space users and owners playing catch-up as a new ‘connected’ generation starts to dominate the workforce.
WeLive has not yet spread as far as WeWork, but the potential looks massive and is described by the business as “a new way of living built upon community, flexibility, and a fundamental belief that we are only as good as the people we surround ourselves with.”
That’s a very powerful and for the target demographic, an attractive statement full of grit and in reality WeLive has the commitment and resources to deliver on the promise. Their web site screams “Love Your Life” and features lots of happy moments and cuddles.
What I find interesting is that part of the evolution of WeLive came about because technology, and a constant diet of digital communications with less face to face connections, was sighted as creating more social isolation, which in part WeLive looks to reverse.
According to their marketing WeLive turns laundry rooms into bars and event spaces to communal kitchens, and there are also roof decks, and hot tubs and lots more.
It’s an idea they promote as changing traditional apartment living through the adaptation, or if you agree, the disruption of physical spaces which then foster meaningful relationships between residents.
Occupancy terms can be from a day, a week, a month, or a year. As an example a studio in NYC could cost US$3050/month and a 4-bedroom place US$7600/month.
One immediate observation is that occupancy terms are flexible for both short and long-term, while facilities are first rate, two points that anyone renting an apartment would look for. Flexible occupancy and flexible services is very much a disruption that we need to take note of.
The second example highlights aspects of apartment living that will look more familiar but, this example is also tied to aspects of shared ownership, evolving apartment design and affordability and how much space we actually need or waste in our homes.
Question: Is there a spare room in your house or apartment? Or do you have a dining room you only use once a year, or indeed an empty house? For many of us the answer is ‘yes’. Here’s two headlines that address this issue.
February 15, 2016, Sydney, finder.com.au: There are seven million spare bedrooms across Australia – a whopping $1.4 billion in untapped real estate, new research by one of Australia’s biggest comparison sites finder.com.au reveals.
October 22, 2016, Sydney, Morning Herald: As astronomical house prices shatter the home ownership dreams of many Sydney-siders, government research has found the equivalent of 20 years of housing supply is tied up in empty bedrooms.
Do these headlines simply mean that we may have too many homes and homes that are too big? And while Airbnb might unlock some of this accommodation, is the turning point more basic, like the changing nature of car ownership. It’s already possible that in the near future the individual ownership of cars will be a relic of the past as the shared economy disrupts that idea. Dreams of owning a car, as a rite of passage for many teens, is no longer.
While WeLive has a target demographic there’s also another option described as community living with a specific focus on couples and families.
One example is The Lanes in Long Island City where a combination of architect designed ‘micro-apartments’ come with a great range of shared facilities that include a fitness centre, bike and package room, laundry, games room, library, roof top terraces with lounges, cabanas, BBQ and even outdoor fireplaces. The idea is to provide shared facilities that offer flexibility, social contact, value and a quality lifestyle.
The trade-off for the extra facilities is that apartments are generally smaller, around 40% smaller than a typical apartment in the same area, but they are very functional and well designed with big windows, accessible balconies and fully-fitted, if modest, kitchens.
Although the apartments are smaller, with no laundry and limited internal storage, the quality shared facilities more than compensate for the smaller apartments. Not to mention being more affordable.
Another important point is that all apartments have parking, one space, and the building is well connected to local facilities and excellent public transport facilities at the door.
The Lanes and WeWork are just two examples of what is sure to be many new ideas set to disrupt the more traditional approach to apartment living.
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