Meeting the Demand for Student Housing: Challenges and Solutions in California

Student housing is gaining fresh attention as an asset class in the face of significant hunger for housing, but developers say meeting that demand is difficult, especially at a price point that works for students.

An estimated 417,000 students at the state’s three largest college systems don’t have stable housing, surveys done at the University of California, California State University, and California Community Colleges have found.

“That’s absolutely a critical need on our campus,” UC San Diego Associate Vice Chancellor of Housing and Hospitality Hemlata Jhaveri said at Bisnow’s Southern California Student Housing and Higher Education Summit.

Efforts to address affordability start with bringing the design and construction teams in early and looking for innovative ways to save money in the development process. Early collaboration has already been helpful in altering the way UC San Diego plans out projects, with architects and engineers streamlining room designs to maximize efficiencies.

UC San Diego is also utilizing modular pods to reduce construction time on a major project — two towers of student housing, 22 and 23 stories tall, respectively.

At Claremont McKenna College, students pay a single rate for on-campus housing, but pricing off-campus options is trickier. Surveys have found the greatest need for affordable housing among the state’s community college students, 20% of whom lacked stable places to sleep.

Many community colleges have rising enrollment and an increased need for housing, but they can be a hard sell for capital sources, according to Champion Real Estate Co. CEO Parker Champion.

“Inevitably, we go to our mortgage broker, we talk directly to our lender relationships, and almost unanimously it’s, ‘I’m not going to be able to fund that,’” Champion said. “It’s so hard to get those funds, and the last thing they want to do is put it at a school that they’ve never heard of, and that’s the real challenge.”

The challenges of providing affordable and stable housing for students in California continue to be a pressing issue for developers and colleges alike.