SAN DIEGO—A mix of development cost, rental unaffordability and a large supply of outdated housing options that don't serve the universities' student-retention goals is creating problems for the student-housing sector here, panelists at a recent ULI breakfast event said. According to information provided exclusively to GlobeSt.com, speakers at the ULI San Diego-Tijuana District Council breakfast event this month agreed that student housing—the second-largest college expense for most students after tuition in San Diego and throughout much of the nation—is in crisis.

Moderated by Jeff Graham, executive director of real estate at University of California at San Diego, the event was organized by ULI's Young Leaders and entitled “Trends in Student Housing.” Panelists included Mark Cunningham, assistant vice chancellor for housing-dining-hospitality services at UCSD; Gary Levitt, founder and principal at Sea Breeze Properties; Fred Pierce, president and CEO of Pierce Education Properties; and Robert Shulz, university architect and associate VP of real estate, planning and development at San Diego State University.

The student-housing crisis, according to the panelists, is a mix of development cost and rental affordability, as well as a large supply of outdated housing options that don't serve the universities' student retention goals. The panelists concurred that as the percentage of high-school graduates continues to increase and international student enrollment at universities remains strong, the crisis will only grow, absent fast action and creative solutions.

“Students don't want to commute,” said Cunningham, adding that many of California's CSU colleges have better affordable-housing options in the surrounding communities than University of California schools. At UCSD, he says, undergraduate double-occupancy rooms have become triple-occupancy rooms.

While the neighborhoods surrounding SDSU offer more affordable housing than those near UCSD, Schulz says SDSU wants to extend its live-on-campus requirement for freshmen to sophomores as well, in order to promote student success and retention. This policy change will require additional on-campus housing.

Cunningham added that a student's experience living on campus often shapes their connection with the school, which can last past graduation and drive the decision to become an alumni donor.

Walkability is another part of the student experience universities now need to provide to effectively compete for students, as well as retain them. Cunningham reported that only 40% of college students in San Diego own a car, and Shulz added that only 26% of SDSU students apply for parking passes.

Pierce, whose firm has developed and consulted for student-housing projects across the nation, said that 80% of the projects his firm owns include three or four bedrooms and easy transportation to the campus to meet the changing lifestyle preference of today's college students.

Levitt, who developed a student-housing project affiliated with CSU San Marcos, the Quad San Marcos, says his firm designed several common areas where students could gather at the housing property. “The social aspects have changed,” he said, citing his firm's objective to minimize opportunities for students to feel isolated.

Levitt's project at CSU San Marcos is an example of private student-housing development but with an affinity agreement with the university. Schulz added that SDSU can structure public-private partnerships like this by providing long-term ground leases from the SDSU Foundation to the private developer and offering a limited-term affinity agreement. Under this model, the university controls the occupancy mix for the near-term, and the developer regains control after that time. Tax-exempt bonds cannot be used to finance this type of development, however.

Another option for universities is to purchase projects outright from developers, but the majority of university housing is still developed using the traditional model, which Cunningham summed up as “issue financing, hire an architect, build it.” Pierce pointed out that this model of student-housing development typically moves slower, but the university maintains more control and can use tax-exempt financing.

Cunningham reported that UCSD may issue a request for proposals to developers for an as-needed list in order to address some of their student housing needs.

Cunningham added that a student's experience living on campus often shapes their connection with the school, which can last past graduation and drive the decision to become an alumni donor.

Cunningham reported that UCSD may issue a request for proposals to developers for an as-needed list in order to address some of their student housing needs.

Instant Insights /

Why San Diego's Student Housing is in Crisis

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