Student Housing Developers Think This UC Project Is A Sign Of The Post-Pandemic Times
The pandemic has changed the way developers think about student housing design, and those changes are already playing out at one notable project underway in the Bay Area.
A 14-story, mixed-use complex under construction as part of the new Academic Village at UC Hastings Law is an example of how student housing developers and investors are attempting to future-proof their projects, combining multifamily amenities like fitness centers, retail space and an exterior atrium with student housing components like residential lounges and study rooms.
The 198 McAllister St. building will include below-market-rate graduate student housing with a mix of studios and one- and two-bedroom apartments.
“We want to re-envision student housing projects to be resilient and flexible, but not lock us into some temporary phase of time,” Anders Carpenter, a senior associate at Perkins & Will, said during Bisnow’s Northern California Student Housing and Higher Education event last week.
Perkins & Will is the architect of the project; Greystar is the developer; and the general contractor is San Francisco-based Build Group. The 365K SF building will house nearly 700 students from several universities, including UC Hastings Law and the University of California, San Francisco. The project is being financed by $364M in tax-exempt bond funds.
“The student housing projects coming online today are mixed-use in nature, with increased amenities and academic functions all in one building,” Anders said. “Our UC Hastings project had a lot of those ingredients when we started planning it three years ago, and the importance of that has only dialed up during the pandemic.”
To meet demand from students, whether early in their college career or pursuing a graduate degree, student housing projects will need to include a mix of ingredients to weather market uncertainty, from dedicated study spaces to childcare components.
Greystar, which counts about 120,000 student housing beds in its portfolio, is “doubling down” on the sector in the wake of the pandemic, Managing Director of University Partnerships Jared Everett said at the event, held Feb. 10 at the JW Marriott San Francisco Union Square.
“The pandemic proved the value proposition of student housing,” Everett said. “When campuses closed their on-campus residences, we saw those students try and rent off-campus, as they still wanted to gather with friends and classmates. The pandemic has reinforced the value of in-person learning.”
Despite this bullish take, Everett said it’s important to note there are 5% fewer college students now than pre-pandemic, representing 1 million students across the U.S.
“We learned that not all markets are equal, and there will be winners and losers,” Everett said, pointing to community colleges, which were “disproportionately hit,” as an example. He said that pain will ricochet through the market as those colleges feed into four-year schools.
As the Bay Area grapples with housing shortages and affordability challenges, the student housing sector is facing challenges of its own.
“I don’t need to tell anyone in this room that the Bay Area still suffers from undersupply at all levels of affordability,” said Todd David, executive director of the Housing Action Coalition. He noted that students unable to secure or afford student housing often turn to market-rate apartments.
“By creating more student housing, we can take a bit of pressure off of the general market.”
In a separate panel about financing student housing, San Jose State University Chief Financial Officer Charlie Faas said that the need for student housing is exacerbated by demand from graduate students and faculty members, many of whom are grossly underpaid, Faas said.
“We will all go out of business and there won’t be a need for student housing if we don’t solve faculty and staff housing,” Faas said.
The UC Hastings project seeks to address this, and will dedicate 35% of units to “UC learners and employees, primarily from UCSF,” University Chancellor Sam Hawgood said in a statement. Occupancy is set for June 2023.