June 25, 2024

Housing Finance Development

It's Your Housing Finance Development

Despite National Enrollment Slide, Many Universities Are Investing In Major Student Housing Projects

Although total college enrollment continues its more than a decade-long decline, several universities have recently announced major investments in the construction of new, large-scale student housing projects.

According to the National Center for Education Statistics, between fall 2009 and fall 2020, undergraduate enrollment at degree-granting postsecondary institutions decreased from 17.5 million to 15.9 million students nationally, a drop of 9%. And from 2019 to 2022, total higher education enrollment has fallen by almost 7.5%.

Nonetheless, several colleges and universities are embarking on massive additions to their housing stock. This campus building boom reflects several factors, some specific to a given institution, others more reflective of general trends and student needs and expectations.

Some universities have bucked the enrollment slide and are in desperate need of more student housing to accommodate a growing student body. The University of Cincinnati, for example, is planning an estimated $100 million project that would include space for 625 beds of suite-style undergraduate housing and 125 beds of apartment-style housing for graduate students. The university has faced serious housing issues this fall as it welcomed its largest incoming class ever.

A similar situation exists at the University of Michigan, which just announced that it’s planning to add a 2,300-bed residence hall and dining facility intended to address a growing student demand for on-campus housing. It will be developed to align with the university’s stated carbon neutrality goals.

University of Michigan President Santa J. Ono explained the importance of the project. “Since 2004, undergraduate enrollment has increased by more than 8,000 students, yet on-campus housing has simply not kept pace. Adding more on-campus housing capacity also will ensure more equitable access to affordable housing for those who need it,” Ono said.

Cornell University has completed a North Campus Residential Expansion (NCRE) project that includes 1,200 beds for first-year students and 800 beds for sophomores. It’s intended to accommodate the university’s planned enrollment growth and to permit all of Cornell’s first-year and sophomore students to live in campus-affiliated housing.

Just this month, the University of Wisconsin-Madison broke ground on a new on-campus housing facility that will contain 142 units with a total capacity of 536 residents in rooms ranging from one to five beds.

In other instances, the need for new housing has been driven by the fact that many student dormitories built during the college enrollment surges of the 1960s and 1970s have now become obsolete or fallen into such disrepair that new construction makes more financial sense that attempts at renovation. In addition, many college administrators believe that offering modern-campus housing with an ever-increasing array of amenities and fancy finishes is essential to attracting new students.

At the University of Alabama, construction has recently been completed on Julia Tutwiler Hall, a 383,000 square-foot residence facility that will house more than 1,200 female students in 625 two-person rooms, 35 resident advisor rooms, and apartments for housing staff. The new facility replaces the old Tutwiler Hall, built in 1968, which was demolished earlier this year.

At many institutions across the country, the housing crunch has become an increasing concern among students as they find it more difficult to afford off-campus arrangements, leading them to view living on campus as a better economic value than private rentals. New residence halls can help ease the growing problem of housing insecurity among students.

And rather than discouraging investments in congregate living facilities, the Covid-19 pandemic may actually have served as another impetus for colleges to add new housing. Older housing stock with its communal bathrooms and large dining halls makes social distancing and quarantining more difficult, compared to the suites and apartments popular in modern student housing. That’s created new pressures on institutions to build facilities that will be safer from a health perspective in the future.

Here are other schools recently completing or announcing major new student housing projects:

  • Virginia Tech University’s Board of Visitors recently approved adding a 5,000-bed, on-campus, housing complex to the university’s master plan. Although the project has not yet received all the necessary approvals and is still under review, the initial concept calls for building a “Student Life Village” that would house up to 5,000 students at a cost of $935 million across three phases of development.
  • Tulane University revealed plans to build three new residence halls with a total of 1,200 beds.
  • Missouri State University opened a new 400-bed residence hall this fall, financed through a public-private partnership.
  • Tufts University, which last built an on-campus residence hall in 2006, will build a new facility that will house 398 juniors and seniors in apartment-style units. It’s expected to open in the fall of 2025.
  • William and Mary, where the average age of its residence facilities is 54 years, is continuing work on a Housing & Dining Comprehensive Facilities Plan, that includes building a new residence hall.
  • The University of Tampa has started what will be its biggest on-campus building, a 10-story, 460,000-square-foot multipurpose facility that will include a 600-bed residence hall, along with faculty offices, classrooms, study rooms, other campus offices and a parking garage.
  • Liberty University unveiled plans last month to build a new ten-story residence hall with 654 student beds. The project, which could begin as early as January, is expected to be completed by the Fall 2024 semester.
  • Gonzaga University is moving forward with construction of a new dorm that will house only sophomores. Expected to open in August of 2024, the new facility will help Gonzaga address what a recent study showed was an 800 bed shortage for upper-division undergraduates and graduate students.

The campus building boom raises several interesting issues. Will increased student demand for on-campus housing continue, or is it a fad? How much pressure will it exert on colleges to initiate housing projects that they might not be able to afford, in an attempt to keep up with the competition? How will local landlords and private developers react? Will public-private partnerships become the main mechanism for campus construction?

With billions of dollars at stake and the competition for students ever more fierce, universities and their home communities will be monitoring these questions closely.