Why We Launched Noah

Since we started Common five years ago, we’ve become the US’s largest operator of coliving apartments, with over 2,000 units open and more than 15,000 under development across 22 cities worldwide. As we’ve grown, we’ve continued to expand our vision, leveraging technology and operational know-how to improve tenant experience and increase our partners’ returns.

We’ve learned a lot over the past five years. Renters’ need for community and affordability are universal and don’t end with shared apartments — people who live with roommates aren’t the only ones looking for a better residential experience. Similarly, the power of technology to improve property management isn’t specific to coliving. As we’ve grown, we’ve expanded to manage more private apartments, bringing our technology-enabled, community-driven model to a wider variety of assets.

For instance, last year we partnered with Tishman Speyer to launch Kin, a new residential brand addressing the needs of families with young children. In April, we opened our first Kin building in Brooklyn and are excited to welcome our first families to the community — we’re already over 50% leased a month in.

Today I’m excited to announce Noah, the third residential brand under the Common umbrella. With Noah, we’ve created a new management model for a massive but under-loved segment of the rental market: suburban workforce housing. As housing becomes increasingly expensive across the developed world — and more people continue to rent for longer into their lives — naturally affordable workforce housing is not just an important consumer product, it’s a critically important piece of national infrastructure and a key to economic opportunity for tens of millions of Americans.

While workforce housing represents nearly 60% of the US multifamily sector, it hasn’t historically attracted attention from investors and entrepreneurs, many of whom live in cities and rarely interact personally with workforce housing. The result is a subpar rental experience that hasn’t evolved for the better in over 20 years. Renters have tolerated this situation because they have little choice: unlike renters in urban, Class A buildings, workforce housing renters typically make 60–120% of area median income (AMI), which means tenants have few options to go elsewhere. It’s not atypical for renters to stay in place for a decade or more.

Owners of these buildings are facing their own issues. Workforce housing has lagged other residential categories in embracing modern technology and software tools. As a result, buildings struggle to operate efficiently, and financial reporting leaves a lot to be desired. This can make it challenging for owners to secure the low-cost financing required to earn their targeted return while keeping rents affordable. Common’s technology and unique centralized operating model allow us to operate workforce housing assets predictably and efficiently, decreasing on-site staffing needs while improving the quality of financial reporting, marketing, and leasing.

While the smartest minds in residential real estate have been focused on how to spend more money to pamper a relatively small number of wealthy urban tenants, middle-income renters have been ignored and under-served. Take a simple concept like resident perks, for instance: almost every Class A urban property manager is now offering discounts to local businesses and national brands. Entire companies have been built around this concept. But these perks haven’t filtered down to middle-income renters, the people who need these benefits the most. While a 25% discount at a local store might be a nice perk for a New York or San Francisco renter paying $4,000 per month, it’s far more meaningful to a Noah renter making $30,000 per year.

There are countless innovations that have yet to move outside of luxury: for instance, we’re now offering security deposit-free move-ins and guarantor-as-a-service across all of Common’s brands. These innovations are already making a positive impact with the Noah renters who need them the most.

We recognize that many unscrupulous real estate investors target workforce housing with the intention of turning it into something else, evicting tenants and flipping units into “luxury” apartments or renting them out on a short-term basis. At Noah, we work with partners who commit to preserve their assets as workforce housing, maintaining long-term occupancy and rents affordable to area median renters.

Rents at Noah are affordable to someone making 60% of median income in their markets. But it’s important to remember that this isn’t under any formal affordable housing program (such as our ShareNYC project with NYC HPD) — these are market-rate units and the market rate just happens to be at an affordable price point given the local market. We call it Naturally-Occurring Affordable Housing…. or simply Noah. Since launching in January in Hampton, Virginia, we’ve assumed management of five assets in Virginia totaling approximately 500 workforce housing units, and we plan to expand to at least 1,200 units by the end of the year.

We are excited to bring Common’s operating model and consumer focus to workforce housing through Noah. You can read the full press release on Yahoo! Finance.