Top 5 Design Challenges in Co-Living Units and How AEC Teams Solve Them

In major cities, one issue rises above the rest: finding housing that’s both affordable and livable. This ongoing challenge has pushed urban dwellers to explore alternative models like co-living. Hence, people look for alternative ways to live in an urban setting. 

Co-living has become a popular accommodation option, especially in city settings where people prioritize association with neighbors while looking for affordability. Businesses want to capitalize on this movement by supplying all-inclusive packages and communal services. Nevertheless, co-living companies’ recent insolvencies and operational challenges highlight major obstacles in creating viable and durable business models.

What is the future for architectural building design companies working on creating co-living? This question lies at the center of many webinars. While industry leaders address the challenges, they also provide insights as they explore the changing market, evolving investment scenarios, and design advancements influencing shared living.

Managing design challenges can enhance how people feel and use a room. When designers create features that fit users’ requirements and priorities, they make spaces easier to use and more appealing, leading to a better quality of life for inhabitants. However, designing for co-living isn’t as simple as reducing square footage and adding bunk beds. Architects, engineers, and contractors (AEC teams) face unique challenges in creating efficient, inclusive, and desirable spaces.

1. Balancing Privacy with Community

Designing for co-living starts with navigating the delicate relationship between individual privacy and communal interaction. Residents crave social connection, yet also need personal space for rest and reflection. Creating an environment that respects both is one of the most nuanced tasks in shared housing design. Unlike traditional apartments, where private units dominate, co-living spaces blend individual and communal areas. Tenants often want to engage with others over coffee or a feast, but also need quiet time for work, rest, or reflection.

The Challenge

How do you construct spaces that help involuntary interaction without making inhabitants feel like they live in a glorified dormitory? Without thoughtful design, residents may feel constantly ‘on,’ leading to burnout and tension. Conversely, isolating layouts defeats the very purpose of co-living. Designers must understand psychological thresholds for interaction and retreat, especially in high-stress urban contexts. It’s a nuanced proportion, especially when different residents have different thresholds for privacy and interaction.

The AEC Response

Architectural rendering companies are approaching this challenge by creating intentional zones. Intimate sleeping areas are sound-insulated, often with minimal visible chaos and soothing color combinations. Shared kitchens, coworking spaces, and lounges are centrally located, visually open, and well-lit to motivate engagement. 

Uppteam’s design team recently worked on a project. “The biggest challenge was sound privacy. We solved it with staggered wall layouts and insulation—simple, but effective.” – Lead Architectural Designer, Uppteam. 

Circulation design is also key to how people move through a space. Materials such as auditory wood panels, zoning with plants or lighting, and adjustable partitions allow shifts from communal to private spaces without sharp limitations.

Real-World Example

WeLive by WeWork (New York City and Washington D.C.) illustrates this hybrid model. Tenants have personal, modular sleeping quarters, while vast lounges, game rooms, and shared kitchens promote organic social connections. Interior layouts prioritize flow and comfort, avoiding the sanitary feel of institutional housing.

2. Optimizing Space Efficiency in Urban Settings

Co-living has emerged as a viable solution in urban cores where housing is limited and expensive. However, the actual test lies in how well designers can turn small footprints into livable, multifunctional spaces that support modern lifestyles without feeling cramped or temporary. Inhabitants may live in units as small as 250–400 sq ft. The difficulty lies in making these close spaces feel accommodating, practical, and adjustable for various actions, from working and cooking to hosting a friend overnight.

The Challenge

How can designers make a micro-unit feel spacious and livable rather than cramped and practical? In urban contexts where real estate is expensive, maximizing space without compromising comfort is both an art and a science.

Here’s How Design Teams Handle It

Since Uppteam, a US-based architectural design firm, worked on a challenging project, one of the designers shared their experience, “In one project, a 350 sq ft unit needed to fit two tenants. We rotated the kitchen layout 90 degrees, freeing up wall space for storage and creating a breakfast bar—instantly more livable.” The architectural team redefined the small living space through thoughtful spatial planning and built-in flexibility. 

The general solutions include:

• Vertical utilization: High ceilings, mezzanine levels, lofted storage areas.
• Multifunctional furniture: Murphy beds, expandable dining tables, ottomans with storage.
• Natural light and visual openness: Large windows, mirrors, and translucent partitions create the illusion of space.
• Custom joinery: Built-ins that integrate desks, wardrobes, and appliances, eliminate clutter, and preserve floor area.

These techniques are tested digitally using BIM to simulate real-world usage and fine-tune layouts before construction begins.

Real-World Example

Carmel Place in New York City (developed by Monadnock Development) features micro-apartments beginning at 260 sq ft. The units include foldable furnishings, high ceilings, and combined storage, proving that well-designed small spaces feel open and elegant.

3. Ensuring Accessibility and Inclusivity for All Residents

Today’s co-living communities attract a wide spectrum of residents, from young professionals and students to seniors and individuals with disabilities. With such diversity, creating inclusive, accessible environments is no longer optional—it’s foundational to good design. A one-size-fits-all approach no longer works. Designs must accommodate people with varying mobility, sensory, and cognitive needs.

The Challenge

Creating an inclusive environment without feeling clinical is a fine line. Traditional accessibility retrofits often feel like afterthoughts. In co-living, these considerations must be baked into the design from the start to promote dignity and independence for all residents.

The Effective and Efficient Solution

Universal Design principles guide architectural building design companies in much of the accessibility work in co-living:

• Step-free entries and elevators
• Lever handles instead of doorknobs
• Wider corridors and doorways
• Accessible bathrooms with grab bars and roll-in showers
• Easy-to-navigate layouts with clear signage and lighting contrasts

Collaborations with occupational therapists, accessibility consultants, and the use of BIM help AEC teams simulate real user experiences. Inclusivity is integrated without compromising the space’s aesthetic integrity.

Real-World Example

K9 Coliving in Stockholm has become a model for accessible design. The property includes varied unit types, from fully accessible studios to multi-room shared flats. Features like adjustable kitchen counters and intuitive wayfinding ensure inclusivity while maintaining a warm, community-focused design language.

4. Embedding Sustainability from the Ground Up

Sustainability has become a key driver in residential design, particularly among co-living residents who expect their homes to reflect their environmental values. This pressures AEC teams to deliver energy-efficient, low-impact buildings without sacrificing comfort or affordability. While many companies still struggle to decide whether to embrace sustainability, it is not optional for most architectural firms designing co-living spaces. According to the US-based architectural design firm Uppteam’s design team, which regularly works on co-living space design, “Residents want to see green practices embedded into their homes, not treated as add-ons.”

The Challenge

How can co-living projects remain environmentally responsible without driving up costs or complicating maintenance? Achieving sustainability often requires higher upfront investment and long-term thinking, and some developers resist.

What The Pros Do

AEC teams are embedding sustainability into every phase of design and construction:

• Energy-efficient systems: Heat recovery ventilation (HRV), energy-saving HVAC, LED lighting
• Green materials: Low-VOC paints, reclaimed wood, recycled steel
• Smart controls: Occupancy sensors, smart thermostats, energy dashboards for residents
• Shared amenities: Reducing the number of individual appliances and systems by centralizing kitchens, laundries, and lounges also reduces energy consumption

Some projects aim for Leadership in Energy and Environmental Design (LEED) Building Research Establishment Environmental Assessment Method (BREEAM) certification, which also makes them more attractive to environmentally conscious investors.

Real-World Example

ROOST Apartment Hotels combines stylish extended-stay housing with low-impact materials and passive design features. Shared bicycles, energy-efficient infrastructure, and sustainable cleaning policies align with both resident values and operational efficiency.

5. Navigating Regulatory and Zoning Roadblocks

While co-living continues to gain momentum, outdated zoning and housing regulations often fail to accommodate its hybrid model. These legal ambiguities can stall projects or limit innovation, making regulatory navigation a core part of the design process. Many cities still classify housing as single or multi-family, leaving co-living projects in legal limbo.

The Challenge

Co-living projects can face costly delays, permit rejections, or even shutdowns without proper classification. Developers must often work around outdated definitions of “dwelling unit,” “kitchen,” or “roommate occupancy.”

Designers’ Go-to Strategy

Early collaboration with city planners, zoning officials, and legal experts is critical. In many cases, adaptive reuse—converting office buildings, hotels, or former dormitories into co-living units—offers a path of lesser resistance than new construction. In parallel, AEC firms advocate for policy updates by sharing research, engaging in pilot projects, and demonstrating that co-living meets safety and community standards.

Real-World Example

The Collective Old Oak in London transformed a disused office building into one of the largest co-living spaces in Europe. The team navigated regulatory barriers by working closely with the local council and reclassifying the space as “sui generis” (a unique use class) while delivering a vibrant, community-centric space.

Conclusion

Co-living design demands a deep understanding of how people want to live together today. From fostering connection without sacrificing solitude to embedding sustainability and inclusivity as core principles, AEC teams play a critical role in shaping the future of shared living. At Uppteam, our approach centers on adaptability, empathy, and precision, ensuring that each project we support becomes a home, not just a housing solution.

AEC professionals at Uppteam are stepping up to these demands with thoughtful, flexible, and forward-looking solutions. Our team of skilled and experienced designers is integrating sound design principles, sustainable technologies, and inclusive practices to shape living environments that respond to the realities of modern urban life. As the demand for co-living continues to grow, so does the responsibility to create spaces that genuinely enhance how people live together.

Looking to bring a co-living project to life? Our team specializes in AEC design support tailored to your vision. Let’s create spaces where community thrives and design excels.