May 10, 2022 / 7:26 PM / CBS San Francisco

PALO ALTO (KPIX) --  A Palo Alto startup is aiming to add to the Bay Area's stock of affordable housing with "sleeping pods", a new concept that redefines minimalist living.

The company, Brownstone Shared Housing, has converted a 1,400 square foot, 3-bed, 2-bath home in the Midtown neighborhood into a communal living space for 14 people.

"It's about meeting that desire to give up a little more space, to share costs with more people, that is also comfortable," said James Stallworth, Co-Founder and CEO.

Stallworth and co-founder and Chief Product Officer Christina Lennox, both live in pods at the home.

Lennox and Stallworth designed and built the pods, paying particular attention to the height. Each sleeping pod measures 4 feet wide, 3.5 feet tall, and 6.5 feet long. The pods, which are significantly taller than the capsule hotels popularized in Japan, allow occupants to sit straight up.

"It's a little bit larger than a twin size bed," said Lennox. "I did not want a coffin feel."

Each pod comes equipped with a mattress, temperature controlled fan, LED lighting, standard 120V outlet with USB ports, magnetic hooks, clothing rack, and small folding desk.

Due to the limited storage space, residents are often forced to pare down their possessions to just the essentials. For Lennox, it was liberating.

"Once I relieved that clutter, and got rid of it all, I'm able to think more clearly. It's very, very helpful for my own personal mental health to basically get rid of all my stuff," said Lennox.

Ten of the pods are stacked in the living room, five across, in a double-decker configuration. The remaining four are located in the rear of the house.

Stallworth drew from his experience of struggling to find affordable housing in his final days at Stanford University. He lived in a "hacker house," traded his coding skills for rent, and shared a home crammed with bunk beds that housed 20 people. Stallworth said the hacker house had little consideration for the tenants' well-being.

"I was determined to make something better, that can accommodate people who are willing to give up space, but in a way that they could preserve dignity, comfort and privacy," said Stallworth.

Two of the rooms have been reserved for communal spaces: a home office with three workstation desks, and a dedicated TV room. The main shared space features an open floor plan with a spacious kitchen and dining area.

The $800 monthly rent includes utilities and Internet access. To make the pods more accessible, no contracts or deposits are required, and tenants are welcome to stay as long as needed. Stallworth acknowledged the home could likely generate more revenue as an Airbnb vacation rental.

"One-night stays, and tourism and all of that, is probably more lucrative in the short term. But we care about housing people. And so we're really not about taking all of someone's money, we're about providing a service that people need," said Stallworth.

Alonso Palacios, visiting from Peru, is staying at the home while interning at a local tech firm.

"And here, it's my second family. It's good to have some company when you're out of your country, right? It's very nice for me," said Palacios.

"I was actually talking to a few residents, who said they're able to respect each other more, because these interactions that they're having with each other are actually growing them," said Lennox. "We're choosing to be here, and we're choosing to live alongside each other. These people are becoming my second family."

The company has a second home in Bakersfield. Stallworth and Lennox have plans to scale up and expand in other cities with a long-term vision of expanding affordable housing across the nation.

"We ultimately would like to have a marketplace where people can do this through us, where we provide the pods, and they'd be able to set them up in their house, and we get people into their homes, and provide all the services," said Stallworth.

First published on May 10, 2022 / 10:50 PM

© 2022 CBS Broadcasting Inc. All Rights Reserved.

©2022 CBS Broadcasting Inc. All Rights Reserved.