Affordable housing for graduate students is in short supply. In 2018, Chancellor Gary May at the University of California – Davis appointed a taskforce specifically to examine student housing affordability for the campus. Among the many challenges identified by this task force, they noted the increasing gap between stagnant graduate student income and rapidly escalating rental rates. This challenge is not unique to California, if you ask any campus about their inventory of family and graduate housing you will likely hear them echo a similar concern: the demand for quality affordable housing simply exceeds their supply. The result is graduate students being pushed further and further from the campus to secure leases they can afford, or prospective students simply opting not to enroll at institutions located in the most competitive rental markets.
Aging On-Campus Inventory
The typical on-campus graduate housing apartment facility has far outlived its useful life. Yet colleges and universities continue to invest resources; waging an uphill battle to keep these buildings in operation because they remain affordable and in high demand. Shuddering these communities seems unthinkable because doing so may leave numerous graduate students with no housing option at all. Meanwhile, replacing the buildings also seems untenable as new construction typically requires new project bonds and a significant increase in rental rate to service that debt. So, campuses find themselves in a Catch-22. These tired facilities that have served the campus for decades eat up more and more capital to keep them in operation, but replacing them seems to be cost-prohibitive. So, the campus must continue to operate substandard housing for some of the most vulnerable and outspoken members of the campus community.
As these buildings continue to age, they will accumulate increasing levels of deferred maintenance, decreased operating inefficiency and potential safety concerns. Couple this with the recent spike in home prices and rental rates in virtually every college housing market, and we have a looming housing crisis on our hands for graduate students. This crisis seems to threaten many institutions’ ability to successfully recruit and retain graduate students, and hire the teaching and research assistants they often rely on. To further complicate matters, data collected by both Capstone and other independent consultants in housing demand studies indicate that graduate students prefer private units and bathrooms – the most expensive unit types to construct and operate.
As campuses continue to consider phasing out family and graduate housing completely due to the challenges we have already cited here, it is our charge to work on developing and implementing creative, realistic solutions to mitigate the housing affordability crisis. To be certain, there is no single, simple answer to this dilemma, but there are strategies to be explored. Some of these strategies might include:
- Look closer at your existing inventory. Are there opportunities to renovate and convert existing buildings or residence halls? Graduate students typically do not require the same amenities and scale of common area spaces that undergraduates expect. In addition, studios and efficiency apartments require less square footage, thus allowing a converted building to achieve a high unit yield, contributing to better economies of scale.
- Consider segmenting portions of new buildings for graduate student housing or adding graduate housing components into other capital projects. While new construction is expensive, there are potential savings that can be realized when combining multiple needs into one project.
- Explore the potential of partnering with the private sector in the off-campus market. Graduate students are looking for affordable, convenient options near campus, and an affiliation with an existing, affordable off-campus property could be worth exploring. A private sector partner can also potentially assist your campus in acquiring and renovating an existing community to replace existing graduate housing.
In conclusion, the demand for quality, affordable graduate housing is likely to increase as institutions continue to seek opportunities to expand academic programs and employ more graduate teaching and research assistants. The challenge facing so many campuses, is a lack of on-campus apartment inventory and affordable off-campus options to support these students. As the inventory of graduate housing options continues to be constrained, colleges and universities will need to think creatively about potential solutions. While new construction is an option, there are other strategies that should be considered and a private sector partner can help you assess various strategies and identify the one that makes the most sense for your specific campus and unique circumstances.