As the popularity of coliving continues to grow, so too does the need for multistakeholder ownership and community-driven governance models. The FairShares Commons is one such model, which prioritises shared ownership and decentralised distribution of resources by using a legally recognised incorporation structure for a company. This legal structure is modelled on cooperatives and 150+ years of multistakeholder experience. In this article, we’ll explore how the FairShares Commons can be applied to coliving properties, and why it’s such an important concept for the future of multistakeholder ownership, sustainability and community-focused living.
What is the FairShares Commons?
The FairShares Commons is a company incorporation legal model of shared ownership and management, which seeks to create thriving companies by decentralising power and wealth between all primary stakeholders. It’s based on the idea that a company and its assets should be held in common and managed democratically, and the company itself should be free to create its own destiny without interference by one powerful stakeholder. This means that everyone involved in the company has a say in how it’s managed, and everyone benefits from its use.
This model is particularly relevant to coliving properties, which are designed to foster community and shared experiences. By prioritizing community ownership and decision-making that is deeply embedded in the legal structure of the coliving company, the FairShares Commons can help to create more cohesive and thriving living environments and community cultures.
Sustainable Design Principles in Coliving
Sustainability is a key concern in the design and operation of coliving properties. This includes everything from energy-efficient and renewable energy building systems to circular economy waste reduction and recycling programs. The FairShares Commons can further enhance the sustainability of coliving properties by promoting shared resources and collaborative decision-making to protect and enhance blue and green spaces using dedicated company funding.
One of the key advantages of a FairShares Commons legal incorporation is that investors do not have outsized control over the company, which can prevent environmental concerns being ignored in the interests of short-term profit maximisation. Environmental sustainability principles can be legally embedded in the DNA of the company, and protected by multiple stakeholders, making it a legal requirement for the company to meet environmental objectives such as net zero emissions, or zero waste systems.
For example, a FairShares Commons coliving property might include shared garden space, where residents can grow their own food and reduce their reliance on external sources, and funding can be sought by resident co-owners without needing to gain approval from ‘management’. Additionally, a FairShares Commons approach to energy management might involve shared ownership, coordination and installation of solar panels with energy storage or other renewable energy systems, which can help to reduce costs and promote sustainable living practices.
Advantages of the FairShares Commons for Tenants and Investors
There are several advantages to the FairShares Commons legal incorporation model for both tenants and investors. For tenants, the model legally enables community ownership and engagement. By having a say in how the property is managed and resources are used, tenants can feel more invested in the success of the property, the community and the wellbeing of their fellow residents.
For investors, the FairShares Commons can offer a more resilient and higher value-added community investment opportunity. By prioritising community ownership and decision-making, the FairShares Commons creates a thriving community that has a vested interest in maintaining and enhancing the property and the social fabric of the community. This reduces maintenance costs and significantly raises the value of the coliving company over and above the asset value of the property by making it a sought after place to live, thereby increasing demand from aspiring tenants and future customers. Additionally, the FairShares Commons can help to mitigate risk for investors by promoting a more collaborative and transparent management approach because all primary stakeholders feel safe to air their concerns as joint owners in the company.
Challenges and Potential Solutions
While the FairShares Commons is an attractive model for many reasons, there are several challenges to implementing it in coliving properties. One of the biggest challenges is ensuring that all residents have a proportionate voice in decision-making. This requires robust and flexible governance tools that are sufficiently advanced to cover the nuances of shared ownership accounting and different levels of decision-making from day-to-day living to higher-stakes long-term strategic decisions.
Additionally, the FairShares Commons can be challenging to finance, particularly for investors who are unfamiliar with multistakeholder governance models and structures where they do not have majority decision making power. To address this, education and outreach efforts are needed to promote the benefits of the FairShares Commons, with a particular focus on showing how reduced control by investors translates into much higher value and ROI due to the power and resilience of shared ownership communities that create unique cultures.
Conclusion
The FairShares Commons is an innovative legal incorporation model for shared ownership and multistakeholder governance, which can offer significant benefits to enable sustainable, thriving and community-driven coliving properties with the potential for a high-value ROI for investors if they are willing to cede some control.