Student Housing May Get A Second Wind From The Pandemic As Universities Seek Upgrades
Student housing took a beating in the past year, along with most other industries, but with coronavirus vaccinations spreading, many providers are looking toward a relatively typical fall semester, and over the long term, a significant boost in demand.
“We fully plan to have everyone vaccinated who wants to be vaccinated by the beginning of the fall semester,” University of Illinois at Chicago Vice Chancellor for Student Affairs Rex Tolliver said last week during Bisnow’s Back to School, Soon: The Future of Chicago Student Housing webinar.
UIC allowed its students to remain on campus if they chose, even during the worst of the pandemic, and with mandatory Covid-19 testing and multiple vaccination sites, the school is well-placed to resume mostly normal housing operations by fall, he added.
Other providers agreed.
“We do expect mostly normal housing operations,” Peak Campus Executive Director Brooke Lopeman said, although her company also has several alternate plans ready in case the pandemic persists. Her firm manages several Illinois student housing properties, including University Center, the downtown hub for students from several local universities, and Tailor Lofts, a 135-bed building at UIC.
But if providers are set up for a normal fall, an important question remains: Will students show up?
Leasing has so far been strong at the Austin, Texas-based developer’s properties, which in Illinois include more than 2,000 beds at the University of Illinois at Urbana-Champaign, he said. At some properties, leasing has even been stronger this year than in pre-pandemic days, although overall leasing is down.
Much will depend on whether individual markets are still seeing high infection rates. And even within markets, some student housing options will fare better than others.
“There are residential programs at certain institutions that will always have a draw, despite having potentially greater density than off-campus,” he said.
That includes the University of Chicago’s residence halls, where students from around the world mix together and living on-campus is considered integral to their academic experience, according to Taylor. But in some ways, the opposite is true for students at Chicago’s DePaul University.
“Part of that student experience is living off-campus and renting somewhere,” he said. “It’s going to be campus by campus and market by market.”
One reason overall leasing is down somewhat at private, off-campus properties is that many providers were reluctant to give refunds to students even as the pandemic took hold, Taylor said. That has made students and parents a little reluctant to pull the trigger on new leases, at least until it’s clear how much progress will be made in combating the pandemic.
“We said that housing is an essential service and that we have a lease that says you’re going to pay us, and you’re going to live here. We were less forgiving,” he said.
Blue Vista Senior Vice President Patrick Flaherty said his Chicago-based firm, which acquires and develops off-campus housing, also kept its properties open even as its schools shifted to online learning.
“We saw occupancy at our properties stay relatively high, 65% to 70%,” he said. Students were able to go to school and have a living option safer than crowding in with their parents and other loved ones.
“Even at the height of it, we still saw both demand and the fundamentals stay strong for student housing,” he said.
And once the pandemic loses steam, private, off-campus housing may look even better, especially when compared to the traditional on-campus dorm experience.
“A lot of the housing stock is pre-1970s-vintage-style,” Flaherty said. “A lot of us on the call lived in one of these; I myself shared a bathroom down the hall with 25 guys. We are starting to shift away from that into more of the purpose-built, semiprivate offerings that we have here at University Center and a lot of the properties we own and operate. I do think universities will look at what their current housing offerings are and come up with creative solutions for that.”
That means the post-pandemic era could present major opportunities for student housing developers, according to Gene McDonald, principal of Chicago-based architectural firm HED. And universities will need help, not just with new off-campus options but with their existing on-campus housing.
“A lot of it was built post-G.I. Bill in the ’50s and ’60s and is in dire need of renovation,” he said.