Hi! I’m Jason Benn, founder of the Neighborhood, a one-square mile community of communities in SF that aims to recapture the vibes of a university campus, but for all generations. We’re part of a movement composed of coliving (one big rented house), cohousing (multiple adjacent owned houses), third spaces (community centers), and good vibes (I bump into friends once every 40 minutes around Alamo Square and Hayes Valley). For past updates, and to subscribe to this newsletter, see jasonbenn.com.
So long 2023, and thanks for all the fish. Before I talked about what we learned in the last 6 months and what we’ll do in 2024, two calls to action:
In 2023, we learned how to organize real communities. We went from haphazard meetups in 2022 that didn’t really add up to anything, to hosting 3 large unconferences in 2023, one of which turned into a new coliving house. This post is mostly about what I learned.
2024 is about adding real estate and building cohousing. Cohousing is when you have multiple adjacent owned houses that are part of a single community, and they’re much better for raising families because you have your own private space. They’re also in short supply because they’re hard to build, but now (I think) we’ve got the prerequisites in place: a community-building strategy, a platform, aligned real estate professionals, and housing supply.
What I learned from the Village Retreat (September)
This is why our third major unconference last year, the Village Retreat on September 15-17, was cohousing-themed. I teamed up with my friend Phil Levin (of Supernuclear and Radish) and we rented a 50 person bus, hired 3 nannies, and piled 7 kids and 40 community-oriented adults on similar kids timelines and drove to a 21-acre retreat center near Yosemite called Camp Earnest. There, we presented what we’ve learned, played improv, hiked Calaveras Big Tree National Park, and enjoyed the most incredible chef-made food (s/o to Raman of Camp Earnest for being an impeccable host). Here are some photos. A few takeaways:
- The 80/20 of cohousing is having friends live within Baby Monitor Distance. Phil and Kristen put their infant to bed at 7pm. If they want to go out, they can message the groupchat, volunteers offer to sit with the baby monitor while they do whatever they were going to do anyway, and now Phil and Kristen get to have normal social lives without finding babysitters. Phil, about life with an infant: “I feel like kind of a jerk for saying this… but it’s been far easier than advertised”.
- Folks say they’re down to lead. We asked people if they cared enough about cohousing to will a project of their own into existence, or if they’d rather join someone else’s group. To my surprise, the majority (25+ people) said they’d be down to lead a project.
- However, that hasn’t exactly translated to action. In my interviews since, people say that they don’t really have a strong top-of-funnel or middle-of-funnel for building their group, and they don’t know how to evaluate real estate.
If you wished you were invited, well, I do too! Camp Earnest is a small venue and we didn’t even get to invite all of our friends that we know are interested. We’ll continue the cohousing-themed events on Feb 17th at Noasis with an info session, get-to-know-you game, and happy hour at El Rio, and there will be more ones after that.
What I learned from launching Treehouse (April through September)
Meanwhile, I learned about what it takes to launch a single great coliving community. Treehouse emerged from Califlorence Climate, our first unconference back in March. One of the goals of that event was to kickstart a climate-themed coliving house. It’s exceptionally gratifying to report that this actually worked :) The house is warm, fuzzy, full of ambitious and inspiring people, many of whom were previously on the fence about rearranging their lives to move in together (or to live communally, period).
It wasn’t easy. After the event, myself and a core group met every week for nearly five months, often for 3+ hours, to make arrangements and recruit other housemates. None of us suspected it would take nearly so long, which caused morale to ebb and flow like the tides. This is what y’all meant when you said do things that don’t scale, right? Some lessons:
- Community formation revolves around a 1-3 burning souls. They’re usually extraverted, energetic, optimistic, and well-connected. Most people won’t feel comfortable taking on “community risk” and would prefer to wait until the community is already 60-80% formed before committing to join.
- Coliving groups should start small (5-10) and grow gradually. The biggest challenge is keeping morale high while uncertainty is high. Does everyone in your group believe that this project is actually real, that we’re going to find a house before more of the group moves on with their lives and finds simpler housing? The more housemates you still need to recruit, the less real it feels. So start smaller and move into buildings where it’s probable that adjacent units will open up in the next couple years. It also makes a big difference to talk to skeptical folks 1:1.
- All of this would’ve been so much easier with a consistent recruiting pipeline. This all would’ve been much less tiring if there was a consistent source of housemates from somewhere with a larger platform: hence, the Neighborhood Meetups.
Throughout 2023 I was excited about repeatedly building rented homes and monetizing through property management, which is where the owner of an investment property pays someone like me 10% of rents to find people to sign master leases. With 10% of $27K monthly rents for 15BR houses, I’d only need to manage 5 houses to earn $135K/year. However:
- Groups of 5-10 prefer to find their own housing. Ultimately, Treehouse was able to find a 10BR that they were happy with, even though it took them 4 months. However, at the beginning of 2023, I thought that large vacant colive-able houses in the Neighborhood would be vanishingly rare and that it would be up to me to go find big houses and make deals with the owners. This was hard, to say the least, and although I did land 2 property management contracts for houses, both of them were intimidatingly large for a new community — they simply weren’t confident that we could fill a 20BR house right off the bat without making any compromises. 5-10BRs felt way more achievable, and groups can find their own houses of this size on Zillow.
- Simple renovations can transform a generic house into a phenomenal coliving house. One of these houses, 1664-1670 Fell, was its own whole saga. I struck a deal with the owner to transform a 4-unit multiplex into the ultimate coliving house: he would finish the attic, move a bedroom, extend a hallway into the backyard, and join two common spaces into one enormous beautiful space — it was going to be amazing, like Embassy-level quality. I paid a security deposit up-front, promised a longer lease and a full house as soon as it opened, and in exchange he paid for $50-100K of renovations.
- But it’s crucial to partner with trustworthy real estate professionals. In this case, the owner neglected to get the proper permits for renovations, a neighbor noticed and complained to the city, the city sent an inspector, the inspector issued a stop work order, and then his lender foreclosed on the house. This was demoralizing, to say the least, both for myself and for Treehouse, who had already been planning around this place for months.
- My biggest mistake of the year: canceling the Aligned AGI community for lack of a big house. When Fell St was foreclosed, the Aligned AGI community that formed during our June unconference was just beginning to assemble. At this point, I didn’t realize that communities could just find their own large houses, and my priority was just finding a good place for Treehouse, so I offered Oak St to Treehouse and let the nascent alignment community fizzle. This was a mistake — both probably could’ve found their own house if I hadn’t given up. Now that group has mostly scattered to the winds and settled into other houses. Damnit.
- Still, it’s all so worth it. Every time I visit my friends at Treehouse they remind me of why I’m doing all of this in the first place.
2024 is about helping you build cohousing
Working in public has been an unmitigated blessing for me. It’s how I got my Schmidt Futures grant, and it’s how my Brian Elbogen found me. Since we were introduced in November, we’ve been exploring starting a real estate business that will help people build cohousing.
Brian is a wholesome Christian dad of 3, he’s 38 years old and wants to live long-term in San Francisco, and he’s about as obsessed with building cohousing as I am. He’s lived in 15-20 cohousing villages across the country in his life and intends to build his own here in the Bay in the next year. Skills-wise, he’s perfectly complementary to me: he’s been Chief Strategy Officer or Chief Investment Officer at proptech startups for the last 10 years. So we both get to specialize in what we love to think about: strategy, mortgage finance, and real estate for him; community-building, events, and systems for me.
In December, we planned and co-hosted a talk about strategies for building cohousing in the Bay Area at The Commons. Here’s the recording.
A major blocker to cohousing is that most folks don’t know how to find and evaluate real estate. It’s much easier to find a single-family home for yourself than to find a bigger house that works for everyone in a group. And how do you find adjacent properties?
To help, we’ve been starting groupchats where your group, Brian, and myself can evaluate opportunities together. Usually these happen on the Neighborhood Slack (message me for access), because having a thread for each house is handy. Crucially, Brian will also provide analyses of good houses as investment opportunities and strategies to finance it given your group’s mix of renters, owners, and investors. Your group gets full management control over who’s in each channel, and you can freely invite folks into the Neighborhood Slack.
We’re open to whatever is most useful to each groups — I suspect the above formula won’t quite have product-market fit yet, and that some groupchats might become overwhelmed and disengaged, so we’ll have to iterate plenty.
As for our business model, it’ll be some combination of these:
- Real estate development. We create a real estate syndicate with the future owners, “flip” a multifamily home by converting it to TICs which adds 30-50% in $/sqft, and share the upside with the early investors. This is a nice incentive to buy in early! It rewards the burning souls that believe in the community before it’s formed. Returns come from the folks that join after the community is mostly derisked and who buy the TIC at the same price they would’ve paid for a single-family residential unit elsewhere. This works because multifamily homes have been cheaper in $/sqft terms than SFRs ever since the Fed increased interest rates, where before they were roughly the same.
- Real estate agents. This is the obvious one. We’d get a standard transaction fee on home sales. I’ve already done my classroom hours for my agent’s license (I first started studying in April 2022, see Update #6) and Brian is working on his now too.
- Property management. If you want to buy a big multifamily building, like a small condo building, but your group is too small to fill it, then we can help fill the rest of your units with potential future cohousing neighbors, Neighborhood friends, or whole coliving communities.
- ADUs. We can help you convert a garage or add a new house to your backyard. You can rent or sell this separately, use it as common space or a kitchen or coworking, or anything else.
Over time, these cohousing communities will expand into nearby properties within half a block or ideally next door. We’ll knock down the fences, remodel shared backyards into gorgeous communal parks fit for frolicking with little libraries, winding footpaths, footbridges over water features, bandstands, hammocks and hot tubs, or whatever else. This video is a constant inspiration. Noasis, Radish, and Solaris all show that this growth happens anyway, and that you just need to plant the seed.
Brian has been discovering about 2 promising leads per week. If you want to see them, tell me what you’re looking for and I’ll create a groupchat for you where we can share these leads!
As always, thanks for reading,
— Jason
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