Here’s what America’s backyards really need: a few friends

Want to be 25% happier? Move within a mile of a friend. Halve that distance for a 40% boost.

Real estate developer Phil Levin and his wife knew that living close to pals wasn’t just a nice-to-have but a necessity. “We watched our friends outbid other buyers for homes near ours,” he says. “That’s when it clicked: There’s a massive premium hiding in proximity to chosen neighbors. And nobody is building for it.”

He’s out to change that with Live Near Friends: a platform that helps groups buy or build duplexes, triplexes, or mini ADU compounds where BFFs live close enough to share a baby monitor or a beer at a moment’s notice. These friend-plexes are catching on as Americans realize that having a huge house and yard to themselves can feel more isolating than idyllic; many others simply can’t afford that solo setup. Meanwhile, a number of states have revised their laws to allow single-family lots to be carved into smaller parcels, enabling more homes to be built at a 20–30% discount (more on this below).

“The laws finally exist,” says Levin. “But the product doesn’t—yet. We think this category has enormous latent demand.”

Buyers clamoring for compounds typically fall into one of three camps: young families looking to share a yard and child-rearing responsibilities, multi-generational families hoping to keep aging elders nearby, or “Golden Girls” who want to grow old together. Levin is not alone in thinking that demand for these properties is untapped and waiting to explode.

“Duplexes, homes with ADUs, clustered cottages with shared outdoor space are becoming increasingly valuable,” agrees Barron Peper at Architecture of Belonging, who designs these dwellings and lives in one himself with a friend. “On a very simple level, housing is expensive. Friends who trust each other can do more.”

“Demand is skyrocketing because the traditional single-family home on a large lot is becoming out of reach,” agrees Daniel Ellington, a real estate agent in Chicago who helps clients find multi-generational properties and shares one with his mother and kids. “The pros are significant: We save on housing, food, and childcare, while regaining a sense of community.”

But do friends make good neighbors?

Still, this Friends fantasy can turn Jersey Shore fast if the right questions aren’t hashed out ahead of time to make sure everyone’s on the same page.

“Shared mortgages are where things get messy. People should ideally not be on the same loan,” says Levin, who advises buyers to each get their own mortgage and deed. Or if one friend has more capital, a landlord/tenant relationship can be cleaner than co-buying.

But even in the most well-intentioned setups, “Living in a community is hard,” admits Peper. “People are used to having their own space, which buffers them from relationship skill-building, where you grow and learn. To choose to live in a community is, in some ways, a commitment to becoming skillful in relationships.”

Scroll down for a closer look at what living near friends is like, warts and all.