How to Make Affordable Student Housing a Reality
For students who are either going to college full time or juggling a job and school, finding affordable housing is a major issue. Making on-campus student housing a part of a higher-education institution’s list of offerings not only can help meet student demands but improve a higher-education institution’s overall retention rate. With the convenience of having their learning and living environments combined through on-campus housing, students are given more time to study and develop social connections, better enabling them to excel academically, obtain degrees and become loyal alumni.
But for higher-education institutions who have never developed student housing, the process can be a challenging undertaking. Since Universities and Colleges are in the business of educating students, outsourcing development oversight and assigning development risk to a private partner can be the best option.
The real challenge to achieving a successful project lies in selecting a qualified developer who brings to the table both the required skill sets and a considerable portfolio of campus development projects. The right development partner can help higher-education institutions turn the idea for student housing into a reality by equipping them with the proper resources towards the quick and efficient delivery of new housing—in time for the new school year.
The Advantages of Selecting a Developer
While selecting a developer is a critical step towards ensuring an expedited project—no matter if it’s first-time housing or additional housing—it is most crucial to engage a developer for those higher-education institutions who want to implement housing for the first time. Through in-depth experience and marketplace understanding, developers offer the following advantages over the more traditional design/building method:
- Cash flow from university-owned student housing remains available for the necessary repair and renovation of university-owned facilities.
- Management of the new facility may be retained by the University, thereby insuring a seamless continuity of housing policies and procedures throughout the campus.
- Working through the non-profit entity, the development manager is able to more efficiently secure contracts and services as compared to the process of strictly following public procurement guidelines. An added benefit is the coordination of direct purchase tax savings which can be substantial.
- The use of a third-party developer may avoid the elongated capital planning requirements and processes.
- Can eliminate the traditional finance model requiring university housing pledges and cross-pledges of operating revenue.
- Has the potential to create additional capital that can be used to take care of other University needs such as renovation of existing housing stock
However, warns Bob Mills, Executive Vice President of University Housing Services, Inc. (UHS), higher-education institutions should be careful to select only a developer with student housing experience. “It’s important for colleges to select a developer with student housing experience, as these projects can be much different from other campus development projects,” explains Mills. “This is especially true of first-time housing projects which have their own unique challenges. If a developer doesn’t have this specific experience, it can greatly affect both the quality and timely completion of the finished facility.”
Armstrong Atlantic State University partnered with UHS to implement its first-time housing Compass Point I & II, a 564-bed project, completed in 2003. Vice President of Student Affairs, Dr. Vicki McNeil, said that by partnering with UHS, AASU was able to assign the project’s development risk. UHS provided the up-front funding to design and build their student housing, while AASU owns and manages the property.
“The advantage of using a developer is the professional expertise in design and building of residential housing and negotiated cost savings in construction and purchase of furnishings,” said McNeil. “While the developer provides the initial funding base, the tax-exempt bonds support the project and the rates that will be charged to the students pay for the tax-exempt bonds used for financing.”
In response to AASU’s continued demand for student housing brought on by the growing Savannah metropolitan area, UHS was recently selected to develop Phase 3 of AASU’s student housing. Construction of the 553-bed Windward Commons project is scheduled to begin in May.
About UHS:
As the campus development partner for colleges and universities throughout the United States, UHS has turned student housing projects into successful long-term investments for many higher-education institutions, including several first-time housing projects. UHS offers all the services and partnerships needed to guide higher-education institutions throughout a student housing project, including conducting a market study, site selection, master planning, obtaining financing and design and construction.
Email or call us at 888-847-8326 (UHS TEAM) for
help planning a successful student housing project on your campus.