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How can public-private partnerships ease the student housing challenge in tight markets?

August 28, 2018

Amid aging facilities, economic pressure, and a crush of new students, universities are wise to consider what P3 options are available

More students than ever are headed to college campuses, and it’s creating a housing crunch. With high population growth rates, California’s Bay Area faces a serious housing shortage, leaving few options for the 80,000-plus students attending the region’s 30-plus institutions.

Many schools guarantee housing for first-year students, while offering lotteries to other students. Those Bay Area students who don’t fit into these categories are left to fend for themselves in the general housing market where rent averages about $3,300 per month. That requires a six-figure income (as a student) or several roommates.

San Francisco is a challenging market when it comes to student housing. Typical rent averages about $3,300 per month and university housing options are sparse for the students attending the 30-plus schools in the Bay Area.

Earlier this year, Arturo Vasquez, Stantec’s San Francisco Design Principal, hosted a student housing discussion focused on the current student housing boom underway in Northern California. He talked about how universities and their partners are working together to alleviate the current student housing challenge. For many, public-private partnerships (P3) are the best option.

With the challenges that exist to fund and build student housing, what is the trigger for universities to use a P3 approach or model for student housing?

Arturo: Another element that adds a level of complexity for institutions is the pressure of land ownership. When the college looks at “what are we going to do about housing?” They must look at their available land—they must make a decision if that’s going to go to a housing product, or if it’s going to go to an academic program, or a different facility. Maybe they opt to work with a private developer and look at properties and developers working off-site. Both on-campus and off-campus developments can be coordinated in to a P3 agreement that is mutually beneficial to both the developer and the institution.

Particularly in California, land availability is a major issue. Can you explain?

Arturo: As a transplant from the East Coast, the particular wrinkle and the nuances I see in California is the lack of availability of housing to begin with in cities like San Francisco. The pressure of land is so phenomenal that I think institutions and the private sector must be very careful with what they do with properties that are in dense urban environments.

California is experiencing pressure from the tech industry where they have the influx of 200,000 people that come into San Francisco every year and have few housing options. And then you add that to the intensity of the institution that is also drawing in students that want to come to formidable universities here, and then the private sector—people like myself that are just professionals—all fighting for the same space.

A rendering of a P3 student residence facility at Texas Woman’s University in Denton, Texas. Whether in an urban or more traditional setting, public-private partnerships are providing  options for universities looking to add student housing.

So, when talking about expensive housing markets like the Bay Area, how can P3 student housing help that affordability situation?

Arturo: One place where I see this working is in conjunction with transit-oriented development. The incentive for more economically accessible housing is what drives a model there. So now a university wins, the transit authority wins, and the private developer wins because the cost of the land is a lot less.

So maybe you have a mixed-use product with some of the units for student housing and some for housing for the general population, similar to the product we are developing in Brooklyn. I think we’ll see that a little bit more down the line as institutions look for non-traditional ways to build housing and how cities are looking for a way that they can provide housing.

Now, from a design perspective, you must be a lot more flexible with a fully wired campus. You can study from anywhere.

When you sit down to talk with universities do you find yourself needing to explain the value of the P3 process?

Arturo: What I’m seeing is that on the other side, it depends on the sophistication of the college. P3 is not a risk-free concept.

Our developer partner at University Student Living, put it in a very good way, “Once you’ve done one P3, you’ve only done one P3.” That’s because each is so unique in their interpretation. So, in this case, I think the private sector, and even the design industry, is a little bit further ahead in the understanding than I think the institutions are. It’s our responsibility to help them with this model of delivery.

Bailey Hall at Michigan State University was originally constructed in 1955. Our team designed the remodel of the facility, which promotes student interaction and programs. A highlight is the integration of the academic environment into the residence facility, which is critical as students spend less time in academic buildings and more in residence life facilities.

What sort of innovations have there been in student housing in terms of design and construction?

Arturo: It’s interesting, because the traditional campus had physical space that was very well defined. There’s the housing piece, there’s academic, a student center, and a recreation site.

Now, from a design perspective, you must be a lot more flexible with a fully wired campus. You can study from anywhere. Now some of the buildings are a little bit more of a mixture where we are seeing spaces that weren’t there before because students will learn in the residence facility.

Students are spending a lot more time virtually learning. So I think that the typology from the design side has changed significantly in being able to be efficient for that return-on-investment spaces that the developer is looking for in a P3 model, but still be able to put in nooks and areas where a student can perform another function other than being in their residence, or in their living space.

Helping universities and their students

Public Private Partnerships are not the final solution or the end-all-be-all for everyone, but they can help to resolve many issues institutions are facing today when properly implemented. 

The flexibility inherent in the model allows each delivery to be custom tailored to the university’s wants and desires. P3 delivery and use of private resources can be very beneficial to public institutions and, most importantly, to the students they serve. If you have not explored this method of delivery lately, we encourage you take a look, you may find something that can help to resolve the issues you are facing on your campus today.

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