With summer break fast approaching, many universities are beginning to turn their attention to the upcoming academic year. The question lingering on the minds of many is: What will fall semester look like during a pandemic? Will international students return? Will enrollment numbers fall? And will campuses even host in-person classes? The answer to each of these questions begets an impact on student housing, both on and off campus.
On Friday, April 17, Student Housing Business (SHB) released a complimentary webinar sponsored by Pavlov Media, during which four CEOs from some of the top companies in the student housing sector provided their perspective on the impact of COVID-19 on the industry.
Rich Kelley, publisher of SHB, led the discussion with speakers including Wes Rogers, president and CEO of Landmark Properties; Rob Bronstein, president and founder of The Scion Group; Peter Stelian, CEO of Blue Vista Companies; and Christopher Merrill, co-founder and CEO of Harrison Street.
What will fall semester look like?
Over the past week, a number of universities announced their plans for the fall semester. These announcements are expected to grow steadily in number, with a peak in announcements expected by mid-June.
“Between June 1 and June 15, universities need to make a decision on what the fall semester is going to look like,” said Stelian. “We have at most 60 days before the answer is clear on what universities are doing for the upcoming academic year.
“These schools are going to want to ensure that they’re receiving tuition and room and board,” continued Stelian. “I’ve spoken with a university that is going to mandate that freshmen and sophomore students live on campus so that the university can attend to their physical well-being even more so, and that’s a school that doesn’t have a housing requirement currently. There’s going to be a wide disparity between how universities tackle the upcoming academic year.”
Several of the universities that Harrison Street has spoken to are on track for normal, if not higher, enrollment numbers during the pandemic. “We have spoken to a few schools that have actually had to overshoot a bit,” said Merrill. “Enrollment numbers are looking pretty positive. Some of the schools that are doing it right are going to be seeing a spike in enrollment because they’re admitting more students than they expected to — it all depends on the school.”
Will the international student population decrease?
The decisions made by international students are expected to have a major impact on enrollment over the coming year.
“There is going to be a ripple effect from the top schools down,” said Stelian. “There are going to be fewer international students and more domestic students. As a result, schools will be impacted by the availability of students who are going to say ‘yes’ to attending in the fall and whose parents are going to be willing to pay for what might end up being an online education. There aren’t going to be semesters abroad in the next academic year.”
Off campus, an uptick in leases signed by international students occurred following the closure of university and college campuses for the spring semester, but this rise is expected to wane.
“We’ve seen more international students signing leases now out of fear that, if they return to their home country, they might not be able to return for the fall semester,” said Rogers of Landmark Properties. “Overall, international enrollment will be down.”
“People will go back to their home countries — some already have — and will not be likely to return in the fall,” continued Rogers. “Universities are responding accordingly and have increased acceptance rates for domestic students. That might be felt at your secondary and tertiary universities, as these larger and more desirable schools are accepting a larger number of students.”
The Scion Group has seen a similar uptick in international student leases signed, but agrees this number will fall off for fall semester.
“Keep it in perspective — international students make up about 5 percent of students in the U.S.,” said Bronstein. “That’s a large number, but it’s not catastrophic. There is no question that international enrollment is going to be down over the next several years. But as Wes (Rogers) said, we have seen international students scrambling and we have had several hundred international students elect for immediate move-ins over the last few months. They have been pushed out of on-campus residence halls and have no interest in going home.”
“We have properties at two of the universities with the highest number of international students — the University of Illinois and Purdue University — and both of them have absolutely changed their admissions criteria over the last few weeks to admit more domestic students,” continued Bronstein. “Just earlier today, someone sent me a communication from an engineering department at Purdue University advising international students to not leave this summer because they’re likely not going to be able to get back in.”
On-campus housing moving forward
The impact of COVID-19 for on-campus residence halls has been immense, as many universities closed down campuses and sent students home for the duration of the spring semester. Will these properties remain vacant through the fall? And will residence halls operate differently if they’re able to open for the start of the academic year?
Bronstein expects an uptick in new development and renovation for on-campus residence halls over the coming years, and an immediate shift in how these communities operate.
“There is going to be a realization that schools need to reduce on-campus density,” he said. “Property types that are not suited to shelter in place really need to be questioned. When you look at old residence halls with shared bathrooms and dining, aside from prisons, it’s really hard to imagine a type of housing less suited to being safe during a pandemic.”
“Schools are going to respond to this by thoroughly renovating on-campus housing to be less dense, and they’re going to be more constrained for capital due to the impact of the pandemic,” concluded Bronstein. “Over the next five to 10 years, this might lead to a larger wave of public-private partnership development.”
At some universities, the acceleration of on-campus development and renovations has already begun.
“We’ve been in conversation with some CFOs regarding accelerating their development plans at some campuses,” said Merrill. “The public-private partnerships we’re doing with universities, we’re also doing with healthcare systems — this segment is going to grow tremendously. The amount of deferred maintenance on these campuses is off the charts.”
For those universities that can’t afford to reconfigure existing student housing for safety, the outlook for the road ahead is grim.
“The pandemic is going to hasten the demise of some of these schools who just can’t afford both their operational model and the capital model that is going to be required on a go-forward basis,” said Stelian.
“There has been a huge spike in administrative spending at universities, and that is going to be attacked. Every single school has been tarred by this experience in terms of having their on-campus housing be shut down. Now, it’s going to be looking through the lens of how students and parents evaluate how housing and dining is delivered. The on-campus residence hall arms race is going to accelerate.”
— Katie Sloan