It was a rough year for everyone, but certain industries absorbed more of the brunt than others in 2020. This would include hospitality, airlines, restaurants and on-campus student housing. There was no clear map for navigating the COVID-19 pandemic, and while campuses and on-campus housing officials tried their best to keep everyone safe and healthy, everyone experienced a turbulent year.
Some on-campus housing communities closed for parts of the school year. Others issued lockdowns that required students to stay in their rooms for up to two weeks at a time. Many tried to stay open, only to find that off-campus gatherings spread COVID like wildfire once it reached housing facilities.
Now that a return to normalcy is imminent — thanks to vaccines and a promising reduction in the number of COVID deaths and cases — on-campus housing executives are tasked with welcoming students back safely while planning for an uncertain future.
“The next six months will be dominated by testing, vaccinations, mitigation requirements, class delivery modalities, planning for fall opening, and occupancy and budget projections,” says Ana Hernandez, assistant vice president of housing and residential education at the University of South Florida in Tampa. “Many campuses are taking a strategic pause on new housing developments to reassess demand, design and financing based upon their campus experience over the last year, while others continue to move forward.”
How quickly a campus moves forward is up to them, but with students returning, projects in the pipeline and future development to think about, many are re-evaluating the issues and trends that will shape housing post-pandemic.
Construction Moves Center Stage
Not all student housing processes were halted when the pandemic took hold. Some developers and owners used this “pause” to complete renovations, while adding features that may play into post-pandemic trends.
“Prior to the pandemic, ACC had been working toward the modernization of resident halls and designing living-learning communities to replace traditional residence halls built in the 1950s and 1960s,” says James Wilhelm, executive vice president of public-private partnerships at American Campus Communities (ACC) in Austin, Texas. “The impact of COVID provided the industry and our company with a sense of urgency to accelerate modernization efforts relating to older traditional residence hall communities.”
One of the biggest trends Wilhelm sees emerging from the pandemic is the need for more private spaces. The best place to start, he believes, is with bathrooms.
“In the long-term, universities will be best served by modernizing their traditional residence halls into modern suite-style communities with in-unit bathroom accommodations,” he continues. “Modern residence halls with in-unit bathrooms will permit effective residence life programming while eliminating problematic traditional group bathing facilities.”
Jay Pearlman, senior vice president of The Scion Group’s advisory services division in Chicago, believes this will be a key trend moving forward as well, along with a focus on academic-oriented amenities.
“One trend that will certainly continue is the focus on smaller spaces with purpose and intentionality,” he says. “Today’s students value academically focused amenities and those that enable increased integration with their studies. Spaces such as music practice rooms, group collaboration rooms, maker space, and other shared work and study spaces will help students bring their work home and further their academic and social success.”
Many of these spaces will be designed with flexibility in mind, allowing administrators to not only change the function of the space, but the size as well. This should allow on-campus housing officers to maximize the use of their communal areas, while staying prepared for another unforeseeable act that may change the nature and purpose of their residence hall at the drop of a hat.
Building in-unit bathrooms and flexible common spaces may be great strategies for the future of student housing design…but that’s only if you can get these projects done.
First, there are the budgetary worries — and they are significant.
“With some layouts becoming out-of-favor due to health and distancing concerns, and with deferred maintenance at record high levels, there will be an increased need for housing renovation and/or replacement,” Pearlman contends. “Unfortunately, many schools will not be in the position to perform these updates as institutional operating costs rise and revenue streams remain strained.”
The American Council on Education estimated in October that the pandemic will result in a $120 billion loss in revenue to U.S. colleges and universities. The University of California (UC) system alone has cited nearly $2.2 billion worth of losses between March 2020 and August 2020. The state further cut $472 million from its contribution to the UC system’s general fund for the current school year.
One solution Wilhelm sees is an increased reliance on public-private partnerships (P3s).
“The financial stress COVID-19 has placed on colleges and universities will likely incentivize institutions to consider public-private partnerships as a means to implement their strategic student housing master plans,” he says.
This can be a good solution, but Pearlman warns these arrangements aren’t necessarily conflict-free.
“The shutdowns of campus housing across the country created a situation that was not anticipated by many of the operating agreements in place for on-campus P3 developments,” he says. “There was confusion over who made the ultimate decision to close, who bore the financial risk, and whether P3 residents were entitled to the same cost adjustments or termination rights that those in campus-owned housing received.”
Even if a university manages to avoid all these pitfalls, they still have to contend with the current construction climate if they want to get a project off the ground — or completed.
“One of the big impacts of COVID has been on commodity pricing and the supply chain for finished goods,” says Ned Williams, senior vice president of Michaels Student Living in Camden, New Jersey. “With all the universities that delayed projects from the fall to the first quarter of this year, those commodities are in even higher demand. That’s making pricing future projects for feasibility studies a challenge.”
Williams notes wood is particularly volatile and scarce right now. He advises that universities focus on their existing operations and protocols, as well as the flexible spaces they already have, if a large-scale construction project isn’t feasible right now.
Tech Takes Top Spot (Again)
Developers may be interested in renovations, layouts and amenities that promote health and safety. Student residents? They just want their Wi-Fi. Thankfully, connectivity can be an easier (though nonetheless expensive) project to tackle when major renovations and upgrades must be put on the backburner.
“The most important thing for us to build into a project is flexible technology infrastructure,” Williams asserts. “High-speed internet Wi-Fi connectivity is the number-one requested amenity in student housing properties. The backbone of those systems has to be adaptable and upgradeable as technology changes. That is a must-have.”
Students’ love of Wi-Fi, combined with their passion for sustainability, need for safety and the COVID-induced proliferation of online learning, have created a plethora of smaller-scale projects on-campus housing can tackle. This includes digital dashboards in the lobby that display water and power usage by a building’s floor or wing. Some residence halls use these dashboards to compete for the lowest usage and impact amongst floors for prizes, Williams notes.
“The role of sustainability and green energy platforms will emerge as priorities as we move forward, along with state-of-the-art interaction software,” says Alma Sealine, executive director of university housing at the University of Illinois at Urbana-Champaign. “Technology continues to drive many of the new initiatives provided within housing development — card access systems, wireless access, ADA upgrades, biometrics, green energy and sustainable practices, to name a few. The pandemic has also highlighted the many options available in providing a hybrid in-person and online experience.”
Though students are eager for the full college experience, which includes rejoining their peers in classrooms and social settings, online learning will most likely remain a part of academia, many experts believe. This has prompted savvy on-campus housing officials to find ways to foster learning within their communities.
The Village opened in August 2018 on the University of South Florida campus in Tampa. The design emphasizes open spaces and flex classrooms to support a live-learn environment, which become essential during the pandemic.
“We will begin to see more Zoom Rooms or Microsoft Teams Booths that will be akin to the old-time phone booths, but better,” Hernandez says. “This will give students the opportunity to take online classes in the halls, connect with friends and family, or even participate in virtual interviews with sound proofing and a professional backdrop.”
Technology cavn also be used to reduce community touchpoints, ensuring students stand the best chance of getting back to that in-person college experience. That’s why ACC used downtime during the pandemic to run a complex touchpoint analysis at each of its communities, specifically targeting common areas like amenities, elevators, study rooms, public bathrooms and other high-touch areas.
“We implemented innovative solutions with touchless plumbing fixtures and bathroom components, door foot-pulls, occupancy sensors and state-of-the-art antimicrobial surfaces,” Wilhelm says. “Technology will continue to provide opportunities to reduce operating costs while providing accommodations compliant with public health guidelines.”
On-Campus Demand
Students may be eager to return to campus and the classroom, but does this sentiment extend to on-campus student housing facilities?
“While students lived on campus during the pandemic, there were many restrictions related to how they engaged with others — lounges were closed, in-person dining was restricted, many did not have roommates, building programs were moved online, etcetera,” Sealine notes. “This has directly impacted the student’s perception of the college experience and will take some time for us to return to a pre-pandemic structure for community building.”
Ryan Jensen, a director and co-leader of the Midwest Higher Education practice group at Brailsford & Dunlavey in Chicago, believes the on-campus restrictions and housing closures may impact demand in the short-term.
“Off-campus student-oriented properties — especially those well positioned around Power Five schools — have seen stable occupancy and rent collections as students were allowed to remain and, in many cases, were unable to break their leases during the pandemic,” he says. “We’d expect that short-term, off-campus housing will benefit because, in our experience, once people move off, they do not move back on.”
Though Patrick Martin, assistant vice president of real estate, public partnerships and compliance at Louisiana State University (LSU) in Baton Rouge, agrees demand may suffer, he doesn’t see it occurring at the lower classmen level. This sentiment aligns with 2018 research conducted by Robert Kelchen, an associate professor of higher education at Seton Hall University in New Jersey. His research showed 49 percent of first-year students lived on campus at private non-profit colleges, while 36 percent lived on-campus at public four-year colleges.
Martin’s worry extends to the older students, particularly with the advent of digital learning.
“I think there will always be a significant demand for a fairly traditional university experience, which includes living on campus the first year,” he says. “I wouldn’t be surprised to see demand for on-campus upper-class housing diminish somewhat due online courses, though.”
The Scion Group has seen increased demand for its off-campus housing communities, but the company has also seen renewed interest in on-campus housing for the 2021-2022 school year as two-thirds of the schools in their market have announced a return to in-person instruction.
“As evidenced by current pre-lease performance, undergraduate applications and even survey data, todays’ students are ready to return to the academic community,” Pearlman says. “It is not only classroom activities that are drawing students back. It is all of the intangibles of the campus experience – being among fellow students socially, playing a sport, going out on the quad to play Frisbee, and even just being in a residence hall and having that first-year experience are all rites of passage that students were ‘promised’ and are ready for. That desire, coupled with the almost daily announcements of a return to in-person learning, convinces us that demand for all types of student housing will remain strong at sought-after colleges and universities.”
Still, that desire could quickly wear off if students and parents are forced into another situation where their institutions and housing can’t guarantee they’ll remain open. This is where on-campus housing operators and developers must manage their risk, Martin believes.
LSU and its development partner RISE have carved out expectations and accountabilities that allow both entities to work toward the common goal of providing an outstanding living environment for students. For Martin, the first step involves an investment in upfront programming and planning, which identifies demand and outlines clear goals. The next step is creating a deal structure where the university and developer share substantial risks.
This is exactly what the pair did when they built Nicholson Gateway, a 763-unit student housing community that can house more than 1,500 students. Construction commenced in October 2016. It opened exactly two years later.
“With Nicholson Gateway, LSU undertook the long-term occupancy risk for the project, while the developer’s risk was largely on the construction and delivery side,” Martin explains. “That let LSU focus its efforts on the quality of the residential life experience, while the developer focused on what the private sector does best. When the pandemic hit, this protected our students because it didn’t leave the developer and the university squabbling over the university’s right to make decisions about living conditions.”
Martin is happy with his development partnership arrangements, and RISE shows no signs of slowing down post-pandemic, either. Though many experts agree that the industry has taken (and may continue to take) a short-term hit, the nature of the college experience means development plans may need to be altered to accommodate for future concerns, but certainly won’t halt altogether.
“The student housing industry has proven it will once again rebound quite strongly as we come out of the backside of the pandemic,” says Greg Blais, president of RISE: A Real Estate Company based in Valdosta, Georgia. “The future of on-campus student housing will remain solid, if for no other reason than schools are recognizing the deficiencies within their inventory. While no one knows when the impacts of COVID on society will end, we have to remember that students are social by nature.”
And a pizza and movie night just isn’t the same over Zoom.
— Nellie Day
This article was originally published in the March/April 2021 issue of Student Housing Business magazine, sister publication to REBusinessOnline.