Black-Owned and Operated Coworking Spaces Face an Uncertain Future as Many Shut Down Across the Country

Coworking spaces have been a mainstay over the last decade as many of us have transitioned from typical office jobs to more collaborative and flexible environments as consultants, freelancers, entrepreneurs, and small startup teams. Now, Black coworking spaces across the country are facing a slow shutter as the pandemic continues to swing the business world into uncertainty.  

The facilities serve as alternatives to traditional corporate offices, often billed as the future of work. The U.S. was home to 5,300 coworking centers in 2019, according to The Instant Group, a workspace innovation firm with a comprehensive dataset on the coworking market. While major players like WeWork and Impact Hub dominated the market, many business owners found opportunities in starting smaller spaces that cater to diverse groups of entrepreneurs. 

In 2018, there were about 65 Black-owned co-working spaces in urban districts from coast to coast. That number is slowly diminishing as several have been forced to permanently close in 2020 due to the pandemic’s economic devastation and social distancing protocols affect every city. Even more spaces have shut their doors temporarily while waiting for signs of public health improvement, but as the U.S. faces a second wave of COVID-19 outbreaks, the wait is getting longer than most people expected. 

It’s bad down here,  said Aaron Saunders, founder, and CEO of the Inclusive Innovation Incubator (In3). In3 was forced to close its 8,000-square foot physical location in Washington, D.C. for good after its contract with Howard University and the Office of the Deputy Mayor for Planning and Economic Development was not renewed.  

We were going into our third year, getting our programs lined up, and we were starting to see an uptick in engagement on social media. We felt we were starting to turn the corner,  said Saunders. Saunders saw an opportunity to continue In3 ‘s online momentum, so he decided to expand its offerings. For the foreseeable future, In3 will exist virtually full-time with a suite of technical skills boot camps, fireside chats, and sponsored events. To stand out among the growing number of online professional training options, Saunders puts his experience as founder of a mobile and web development company at the forefront.  

There are just a lot of people in the space doing it right now, so we have to figure out how do we rise above the noise and say look, this is what we have: real-world experience on software development and working with entrepreneurs that are paying us for our expertise.  Saunders expressed disappointment that In3 was not able to get additional funding, a familiar circumstance for Black entrepreneurs. I’m hopeful that the folks who write the checks, the people who fund and support Black and brown businesses, start to recognize that we’re out here, we’re grinding, and deserve the same opportunity as folks who don’t look like us,  he said. 

A study by Crunchbase found that Black entrepreneurs received less than 3 percent of $87.3 billion in venture capital that has gone to all founders so far in 2020. Black and brown communities have been hit especially hard by the public health crisis and loss of minority-owned businesses. Goldman Sachs conducted a survey of 10,000 small businesses and found that Black-owned businesses face a tougher road to recovery through the coronavirus pandemic. Despite federal efforts to support businesses through the Paycheck Protection Program and small business grants, minority-owned businesses were disproportionately left out.  

Founders of those demographics are not seen, so when you have a space whose primary mission is elevating those founders, it also elevates their visibility. That’s our small part, along with our programming, that helps to close the very big VC gap, said Akosua Ayim, CEO of Equal Space in Newark, New Jersey. Equal Space has been able to earn revenue by shifting its marketing strategy to promoting its private suites that give people the option to work in an isolated room. Ayim noted that there is growing interest in the HQ model, which offers newly downsized businesses a central location to bring employees together without the commitment of leasing commercial space.  Working from home is the new normal, there’s no way around that,  said Ayim.  

But a lot of businesses still want a place where they can go and tag that as the workspace, even if they’re not there every day. They don’t want 30,000 square feet in the city anymore, but they may take 4,000 square feet where the team can come in and take a meeting. In Michigan, SpaceLab Detroit is finding new customers in people who are looking for flex office space and trying to avoid work from home burnout.  

People are on Zoom for their corporate meetings or meeting with clients on Zoom and they’re probably just a little  ‘Zoomed ‘ out,  said SpaceLab co-founder and CEO Karen Burton. SpaceLab Detroit’s flagship facility downtown is still open, but Burton closed the northwest location due to low foot traffic and income. She and other coworking space owners in the area have had to collaborate to develop creative ways to keep remaining customers.   

We had to cancel events that people have put down payments on, so that has been a hit to our revenue stream‚ not being able to host large events,  Burton stated.  Many of the coworking spaces came together to try and help each other find solutions for keeping members engaged, putting together a playbook for reopening, and just continuing operations.   

SpaceLab continues to use its online platform to give members practical tips about how to make their businesses pandemic proof, with a special emphasis on helping founders of color.  We do provide the community where people can hear about grants and opportunities, hear about new projects and services, hear about things that their municipalities are offering for small businesses,  said Burton

More Than A Business: A Space for Healing

Black-owned coworking spaces offer a safe environment for Black entrepreneurs to build community and connect professionally and personally, something Zora’s House founder LC Johnson said is central to her business ‘ mission.  The work that we do is literally just gathering,  Johnson said. Giving people space to gather, network, and be outside of kind of the traditional norm of, you know, having to operate in predominantly white spaces that a lot of us navigate, day in and day out. Zora’s House, based in Columbus, Ohio, had been closed since April after Governor Mike DeWine placed his first extension on the stay-at-home order. Johnson said the idea to pivot to a virtual program didn’t come until the end of May when George Floyd was killed by a Minneapolis policeman, followed by nationwide protests that sparked discussions about police brutality and racial discrimination in the U.S.  

We did end up hosting a number of virtual healing circles that week. It was the first time we’ve ever done virtual programming,  Johnson said.  We have always served as a gathering space, both celebration and mourning for women of color in our community. Johnson noticed that limitations on in-person meetings left people in need of safe spaces where they can learn and innovate. Johnson decided to invest $13,000 into back-end software that can handle the bandwidth of long-term online programming. 

Zora’s House is now expanding to include a virtual national network that is set to formally launch in Spring 2021, designed to bring the communal coworking experience to the homes of Black and brown women in business across the country.  Racial equity and the call for justice is intertwined with these conversations around the pandemic. Our communities are hurting multiple ways,  Johnson said.  

We’ve seen again and again, we’re oftentimes the least invested-in group, the group that already has the least amount of support. I think Zora’s House plays a very important role in ensuring that the women of color who are mothering, leading, teaching, growing, and founding things are a priority. Click here to view the database of Black-owned coworking spaces in the U.S.