timthumbBetter Student Housing Builds Better Communities

For the past decade, across the United States, developers have been building a boom in purpose-built student housing. These mid-rise and high-rise units challenge the old stereotypes of student housing; the buildings are high quality, and feature amenities that cater to student needs.These developments alter the student housing market wherever they appear. They provide housing that’s comparable to or better than on-campus student housing, and they are a challenge to poorer-quality privately-built off-campus student housing.

Recently the Wall Street Journal profiled the rising student housing market, noting that upmarket student housing developments have forced poor-quality developments to close. One such example was “Ashby Crossing” near James Madison University in Harrisonburg, Virginia. The article stated that real estate analysts were worried that the closing of Ashby Crossing was a sign that smaller operators were being pushed out.

However the article itself noted that students at James Madison University were not impressed by the quality of the housing offered by Ashby Crossing, nicknaming it “Trashby”. Students today have more disposable income than ever before, and they are backed by parents and grandparents who want their children to have a good educational experience, including student residences which are safe, comfortable, and which cater to student needs.

In terms of realizing the opportunities that exist, the Canadian student housing market www.rockadvisors.ca/midmarket/student-housing-1/ is about ten years behind the American student housing market. Today, only 19,000 privately built student housing beds are available – a drop in the bucket when you consider that over 400,000 students across Canada are looking for accommodations.However, the City of Waterloo has led Canada in building student housing. Nearly half of all privately built student housing across Canada has been built in this southwestern Ontario city. Most of it has been in high-quality mid-rises and high rises. If there is a place in Canada where we are seeing similar situations to Harrisonburg, Virginia, it is in Waterloo.

The situation in Waterloo did not occur by accident. Various interests, including the city government, local police and fire departments, the University of Waterloo and Wilfrid Laurier University as well as private developers helped come up with a student housing plan that would concentrate new, high-density, high quality student housing developments along major arterial roads around the city’s two major universities.

Previous to this decision, most of the student housing in Waterloo was converted single-family homes in the neighbourhoods surrounding the universities. Many of these buildings were not good quality, and tensions between student tenants and local residents ran high. Proposals to build purpose-built student housing developments in Waterloo met some resistance, at first.

Planners and developers overcame the concerns of residents, however, by pointing out that the new student housing developments would replace converted single-family homes operated by small-scale landlords, without proper oversight. Large, high quality buildings offer students more services, including better security. For fire departments, it was easier for fire inspectors to visit a 400-unit student high-rise than it was to monitor 100 widely-spaced four-bedroom homes.

Waterloo’s efforts have altered the face of the student housing market in the city permanently. The student “ghetto” has shifted, and while it is even more prominent, it can no longer be described as a ghetto. The quality of the housing has vastly improved, and the major roads surrounding the city’s two universities are vibrant mixed-use communities with shops and restaurants catering to student needs. As for the residential neighbourhoods where the older student housing used to reside, studies indicate that families have started to move back into the converted homes. Upkeep has improved, and an older community has reasserted itself. Tensions between students and local residents have eased.

The construction of high quality student housing in Canada and the United States does challenge the providers of the older student housing that existed in the marketplace until the new arrivals. This is a natural economic phenomenon, a sign of the growing affluence of students, and a demand for better quality accommodations. As Harrisonburg shows, the new high quality student housing is pushing out substandard accommodations that aren’t well liked by students. In the case of Waterloo, this changeover is even improving the quality of regular housing in the local neighbourhood where student housing used to be provided.

From April 20-22nd, ROCK Advisors Inc., will be hosting a North American Student Housing Conference. As with the previous years, this will be an excellent opportunity for developers, investors, planners and representatives from colleges and universities to meet and talk about this exciting new marketplace. Further details on this upcoming symposium will be posted at the ROCK website at www.rockadvisorsconference.ca, so stay tuned for more details.

Derek Lobo is the CEO of ROCK Advisors Inc., a real estate brokerage agency with over a quarter century of experience in helping investors make the most out of buying, selling and renovating purpose-built rental apartment buildings. You can learn more about ROCK Advisors Inc., at their website www.rockadvisors.ca