In addition to the isolation that others have cited, there's quite an opportunity for moral hazard on behalf of the entrepreneurs you accept into your house. Not only would you have to be very good at selecting capable entrepreneurs, but you would also need to structure the incentives such that the entrepreneurs met some set of goals or else they would have to pay back the investment you make in the form of rent. Otherwise, there's nothing to prevent squatters from leaching your resourses and stringing you along in the process.
Although I don't see this as a great deal of investment. If somebody's really acting in bad faith, they'd get terminated, but if somebody gives it a go and it just doesn't work out, then at the end of their "fellowship" they just move on, no hard feelings. Or so I see it.
One big issue is how hard it is to evict people. A normal tenant would be out as soon as they got an eviction notice... but a normal tenant also pays rent, and probably doesn't get evicted.
The type of people that don't pay rent and get themselves evicted tend to ignore eviction notices too... meaning you have to go get a court order and have the county sheriff throw them out.
You'd also have to worry about Equal Opportunity Housing laws. You could largely mitigate getting deadbeat tenants if you interviewed them all and made sure they were bright young hackers... but whether you can discriminate based on 'hackerness' is probably legally questionable... but IANAL.
I think it's a mistake to sell this as free. People don't value things that are free.
Maybe you could make the rent non-free, and then pay them (or call it a stipend/scholarship/grant) the same amount of money as the rent/broadband/food etc while they met some condition? As soon as they stopped meeting the condition they stop getting paid, and they have to pay the costs themselves or get evicted.
Well that is part of what I was trying to get at... legally it might be less of a hassle to get rid of people if they were merely guests in your house rather than tenants. Then again, IANAL... I've only heard horror stories from friends that are landlords.
I believe there is another collective of designers in rural Alabama who avoids this problem by focusing on "sustainability" type projects with an emphasis on making the world a better place. http://www.projectmlab.com/
