Gen Z: More Frugal, More Focused On Job Prospects, Less Interested In Fancy Student Housing
Student housing developers must consider new options to make housing smarter and cheaper as the market for high-end dorms approaches its saturation point.
Speakers at Bisnow's BASH South event about the student housing industry noted the market for $1,300 per-bed rental rates can only go so far. The current round of student housing construction has been flush, but the need has turned to projects that can meet lower price points, or a variety of price points within a single property.
Kit Johnson's job, as St. Edward's University's chief architect, was to convince university leaders that building dense, pedestrian-friendly apartments was the right direction for the campus. Johnson squeezed 300 beds onto a narrow lot on his 160-acre campus in South Austin as one component of a larger master plan.
"The whole idea is to bring the housing into the core of the campus and push the parking outside," Johnson said. "It's all about densification."
Page senior principal Larry Speck said the newest wave of students, which now bear the label Gen Z and are between the ages of 15 and 20, are more frugal than their millennial peers. They have seen their siblings take on college debt, and they do not like it. As a professor at the University of Texas, Speck has polled hundreds of students about their preferences in housing.
"These kids are serious about school," Speck said. "They're coming to the university to get a degree and get out. Sure, some are here to go to the big football game, but the notion that all of these UT students are on Sixth Street is wrong. Most of them keep their heads down and get to work."
Gen Z is practical and financially driven, Speck said. The purpose of college to them is to get the degree and get to a job. That means study lounges and private space are at a premium rather than upscale gyms and rooftop pools. That translates to one study lounge per two dozen beds, or even one lounge to every 17 beds.
The Gen Z student values swap shops, hard-wired computer labs and even maker space, Speck said. In some cases, instructors are meeting students in maker space in the dorm to teach demonstration classes in topics like engineering.
The right student housing option — and not necessarily the most expensive product — can make all the difference between success and failure at college, Speck said. He described one off-campus student who was destined to fail because he had no social support system in an off-campus apartment.
"He is failing in school because his student housing is failing him," Speck said. "He has no idea how to be a college student."
A number of speakers agreed ride-sharing has made construction more affordable in the student housing sector. For the first time in decades, developers are building properties without parking garages. Preiss Co. Chief Investment Officer John Preiss said on-street parking made a new property at East Carolina University more affordable.
"We stick build and street park, and the cost of construction puts us under a lot of urban locations," Preiss said. "We're able to charge a lot lower than some of the older product. And ride-sharing means you don't have to be right on top of campus. As they said earlier, there are only so many kids who can pay $1,300 a bed."