In 2016, the WeWork cofounder Adam Neumann described home as “a feeling” rather than something you own. He was introducing WeLive, his company’s concept for rental apartments, where lease terms were flexible and apartments came furnished, right down to the linens and toiletries. The idea swapped traditional tenancy for “membership,” allowing people to move between WeLive apartments as easily as Equinox members could swipe into a gym in a different city.

WeLive didn’t last long. It began to crumble, along with the rest of the business, in 2019, when WeWork’s bid to go public revealed that the company was losing more than $200,000 every hour. The company went into crisis mode and halted plans to open more apartments. The remaining two WeLive sites began to operate more like hotels, until WeWork eventually sold them.

Three years later, Neumann is back with his second swing at reinventing housing—and the Silicon Valley commentariat are unimpressed. His new startup, Flow, is another branded apartment concept, expected to offer community features and other amenities, on flexible terms. Reportedly, Neumann owns 4,000 apartment units in four cities (Atlanta; Miami and Fort Lauderdale, Florida; Nashville, Tennessee) to begin the project, which is slated to launch in 2023.

Journalists and investors have suggested that Andreessen Horowitz’s $350 million investment in Flow, valuing it at $1 billion, could soon be vaporized like so much of WeWork’s cash. Neither Neumann nor his investors have revealed much about Flow, but the backlash toward the idea of giving the entrepreneur a second chance has been swift. On Tuesday, Forbes published claims—denied by a spokesperson for Neumann—that Flow might compete with a rental-amenities startup called Alfred he had previously invested in.

None of that means that Neumann and Andreessen have not identified a market with potential. The gridlock in the US housing market has necessitated new ideas about how, and where, people live. And unlike when WeLive launched in 2016, plenty of startups are now trying to reinvent rental housing for a generation of people who likely won’t buy homes. Flow could become part of a new sector that manages to fundamentally change the way some Americans think about housing, by creating upsides in remaining a renter. That could be lasting and profitable—even if it doesn’t mitigate many of the downsides of the US housing crunch.

For the past two decades, a confluence of factors has caused young Americans to give up on buying houses, a pattern also seen in the UK and some other European countries. New construction has stalled, existing supply has remained tied up, and population booms in urban areas have driven up housing costs. Nearly one in five homes in the US is now bought by institutional investors—not individuals—adding further competition. As a result, the share of first-time home buyers has shrunk, leading more millennials to rent well into their thirties and forties.

This new, permanent rental class presents a worrying outlook for some economists: Housing is in short supply, and that drives prices up for everyone. But for startups, it also presents an opportunity. “It’s a massive, trillion-dollar industry,” says Andrew Collins, founder of real estate startup Bungalow. “And yet it really hasn’t been innovated in the last 50 years.”

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