Several users have suggested coworking spaces on Spotmojo, including a space we’re working with in Oakland. I’ve been thinking about this concept and am starting to think coworking spaces may be a great way to revitalize certain neighborhoods.
What is Coworking Space?
Coworking space is a shared work environment that can be rented by the day or even by the month. It provides an alternative to working in coffee shops and most have many other features. Some provide shared tables, some provide dedicated desks, and some even have dedicated offices. Many of them also provide WiFi, meeting rooms, printers, coffee, a cafe, lounge areas, etc…
Some of the people who utilize coworking space are telecommuters, but many of them are entrepreneurs. Beyond the amenities, it is a great way for entrepreneurs to network.
You’ll find coworking spaces in a range of places. I know of several in the Financial District and SoMa district of San Francisco. Those areas are prime office real estate so you’ll be paying about $35/day there. That’s much more than a few cups of coffee. If you’re looking for the networking features, that may be worth it, but if you’re looking for a reliable place to work regularly, it’ll need to compete with the price of a few cups of coffee.
Where it might work
I did some rough estimates of how much you could pay for space to keep prices competitive with Starbucks (approx. $20/day) and concluded that the space would have to be pretty cheap for it to be a worthwhile venture. But to find cheap space, it would have to be in lower tiered markets.
Then I started to wonder if coworking space would work in these sort of “transitional neighborhoods.” It made me think of that Oakland space where I used to live right around the corner of.
This neighborhood was historically a lower-income residential neighborhood with some light-industrial commercial spaces. However, during the housing boom they started to convert some of the old industrial spaces into condos. If the housing boom continued the redevelopment probably would have also, but we all know how that went. So now you’re left with this incomplete redevelopment project. People living in nice condos but the neighborhood is lacking a lot of basic things. Businesses have been very slow to move in to this neighborhood and that particular space has been vacant since it was built in 2006.
But that space, and spaces in similar situations, I think would be great for coworking space, and here’s why.
The housing boom and smaller ones before it brought in a lot of tech workers, entrepreneurs, artists, and creative people into these neighborhoods. Of course not everyone that lives there fits that description, but many of them do. So there’s a good chance the customer base is there or in nearby cities like Berkeley, Oakland, or Albany.
Because this neighborhood isn’t Class A, you could possibly get a lease rate that would allow the operator to charge a competitive price. I also think some of the owners of these properties would be interested in some sort of partnership with the coworking space operator.
How Coworking Space Could Revitalize Neighborhoods
Although the housing boom brought in residents with more disposable income, they’re not there during the day. I suspect many of them commute to San Francisco and get back pretty late in the evening, probably too late to get dinner. That only leaves the weekend for them to go out to eat or spend money in their neighborhood which probably isn’t enough to convince someone to build a restaurant in that neighborhood.
One common solution to this is to have offices in or near those neighborhoods so you have a daytime population. This particular neighborhood isn’t setup to be a downtown type office HQ. It could work for small retail offices like an insurance agent or doctor’s office, but that might not bring in enough workers to solve the foot traffic problem. And these businesses might not be comfortable with opening in this type of neighborhood given its condition.
But a coworking space could fit in these retail spaces and they could bring more foot traffic to the area.
This is an assumption based on my experience, but I believe people who would work in coworking spaces have a bit higher tolerance for a little scrappiness. Some of these spaces aren’t in the most polished neighborhoods, but I think coworkers might be more accepting of that especially if they can save some money. For example, the SoMa district in San Francisco was in much worse shape ten or fifteen years ago. There are still many dirty streets, but its gotten a lot better and I don’t think many will argue that the many tech startups that moved there had a lot to do with it.
However, I am not at all suggesting we put these in dangerous neighborhoods. I’m also not suggesting that coworking space is the first step in neighborhood revitalization. But I think it fits really nicely in the current state of neighborhoods like that North Oakland/Emeryville area where crime is mostly under control, there are seeds for revitalization, but it’s not to the point where new businesses and shops feel comfortable about opening up there yet.
Having more workers in an area, filling up the daytime population, they’ll need places to eat, places to have a drink after work, and so on. So, I think coworking spaces could be an interesting element to revitalizing certain neighborhoods and at the same time fill a need for people to work and meet.