Are $800/month Pods the Future of Housing in San Francisco and Beyond?

By Published On: July 14, 20226.6 min read

The housing shortage in San Francisco is one of the worst in the U.S. One company is hoping to provide a solution with an innovative co-living space.

The project started as a personal one. James Stallworth and Christina Lennox, founders of co-living space Brownstone, simply wanted an affordable place to live in Palo Alto. Given the state of the housing crisis, figuring out a way to achieve this goal would require some creativity.

A modest but brightly furnished apartment.

Image provided by Brownstone Shared Housing

Lennox and Stallworth began by designing pods that could enable more people to share a space together. “We basically just started with the goal of creating furniture that allows as many people as possible to share a room comfortably. So privacy was important. Comfort in the space was important. And then of course, aesthetics was important too,” Stallworth told Leverage.com.

After brainstorming ideas and coming up with different designs for pods, they created the current structure for Brownstone Live: 14 pods in the same space, stacked two by seven. The residents share common spaces such as the kitchen and living room. The pods themselves resemble capsule hotels, a trend that originated in Japan where travelers stay in a bed-sized pod instead of a full room. However, Brownstone Live’s pods are more spacious than the typical pod in a capsule hotel and residents have access to common areas like the living room.

Given the interest in the first location in Palo Alto, the duo decided to open another space in Bakersville. Pods go for $500 to $800. The main tenants are usually either seeking temporary housing for an internship, school or temporary work that requires them to be in the Bay Area.

Each of the four-feet-tall pods have a curtain so residents can get some privacy. The units come with outlets, as well as a shelf and a rod to hang clothes. People can also hang personal items on the bar of the pod’s exterior.

A micropod apartment is furnished with the belongings of a young woman.

Image provided by Brownstone Shared Housing

Even though the square footage is minimal, many residents like to personalize their pod for the duration of their stay. “I like to think of it as a blank canvas where people make [the pods] their own. They decorate and they organize their belongings, and it’s really nice,” Stallworth explained.

So far, they’ve had a lot of people apply, and haven’t had trouble filling the spaces. One aspect that’s made it successful is that Stallworth and Lennox both live in pods in the apartment, so they get a direct view of what’s happening on a daily basis, as well as a personal interest in choosing people who will be a good fit.

Stallworth said co-living has gone surprisingly smoothly, given the number of people sharing one space is over a dozen. “There’s kind of an application process where [candidates] apply, we read their application and then we do a video call with them to get a sense of their needs and if they’d be a good fit for the house,” Stallworth explained. “We’re doing a pretty good job of getting people who are friendly and open-minded and willing to live and share with other people. So we haven’t really had too many problems with that. We’re definitely getting a lot better at getting a sense of who would be good for the house and who might not be as good.”

Bathroom lines and house traffic hasn’t been an issue either, according to Stallworth, because everyone’s schedules tend to scatter. “Because we’re not a niche co-living space, naturally people are going to be on different schedules,” he said. “Not everyone’s going to have a nine-to-five job, so we don’t have a line out the door waiting for a shower before 9 am. Some people go in at noon, some people go in at 4 pm and then, of course, some people go in the morning. It naturally works.”

Since they launched, they’ve also received a lot of interest from landlords who want to turn their current property into a co-living space similar to Brownstone.

Stallworth explained that Brownstone was designed to meet the needs of both landlords and tenants in the Bay Area. The residents want both comfort and as low a price as possible, and the landlords want to be able to easily rent out their properties.

“There’s not a lot of room in the current conventional rental market, especially in a place like Palo Alto that’s all single-family homes to charge anything less than six to $8,000 for a renter,” Stallworth explained. “But at the same time, there are always people who need to be in school or internships. They’re not getting paid a lot. And so we’re kind of filling in that gap for the landlords, realizing that they’re able to get as much money as they would charge just to a conventional renter. The residents are able to pay a fraction of what they would pay trying to live somewhere near where they work or study.”

In an effort to meet the increased interest from landlords, Stallworth and Lennox have taken a hands-on approach for landlords who are interested in adopting these pods for their property.

“Our core model is that landlords purchase the pods through our website and we set them up and agree with the landlord on the price they would be charging,” Stallworth explained. “So we’re not interested in just selling a bunch of these pods to private landlords and then them charging whatever they want. We want it to be more like a marketplace through our website where we still own the pods, we place them in the landlord’s homes, and then we rent them out to people,” he explained.

A backyard is lit by summer sunlight.

Image provided by Brownstone Shared Housing

This revenue model splits profits between the landlord and Brownstone. Brownstone is handling the logistics and management that comes with running a space with multiple people, but the landlord is able to convert their property into a co-living apartment without direct experience of running a space like this.

Stallworth and Lennox also received interest from public and private sectors who wanted to adopt these pods in their spaces, such as colleges and universities. As a response to this interest, Brownstone opened up the option for these institutions to purchase the pods through their website.

Overall, Stallworth sees Brownstone as an innovative solution to increased housing costs that can be suitable for some people looking for short-term housing but also stresses that they are not for everyone.

“There’s clear people who need this, people who need to be somewhere for a few months, whether it’s school or an internship,” he explained. “Traditionally those people are competing with families and more stable people who need to be in an area for the same housing. So this is an innovation that I would imagine helps in that front,” Stallworth explained.

Given the high cost of rent in the Bay Area, for many these opportunities might not be possible without affordable living options. Given that these pods were conceptualized for short-term housing, it hopefully stays limited to tenants looking for a temporary solution if this trend continues to expand. Longer-term innovative solutions will still be needed to address the housing shortage.

As the team gets more experience, they are improving the design of the pods and refining the process of managing a co-living space. The company is considering expanding outside of the Bay Area to different cities across the U.S. New York is at the top of the list, based on the high level of interest they’ve received.

“[The pods] you see in Palo Alto are literally just the very first ones we’ve made,” Stallworth noted. “Then, of course, the Bakersfield ones are a little better. The next ones are going to be even better.”

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