Student Housing Business is the voice of the student housing industry.
Issue link: https://studenthousingbusiness.epubxp.com/i/616872
PUBLIC/PRIVATE PARTNERSHIPS NOVEMBER/DECEMBER 2015 STUDENT HOUSING BUSINESS .COM 48 P3 PERSPECTIVES On-campus student housing offcers and development professionals recently discussed their experiences replacing outdated university housing stock utilizing public-private partnerships. A Across the country, universities are faced with outdated and obsolete housing stock built follow- ing World War II for students taking advantage of the GI Bill. In the 21st century, older, on-campus housing is costly to maintain and needs updating, but construction and maintenance costs often vastly outweigh a university's budget capability to address them. In response, many universities and student housing companies have formed public- private partnerships (P3s) to create a structure where new housing can be built. At the recent 3rd Annual InterFace On-Campus Housing con- ference in Tempe, Arizona, several profession- als from both sides of the partnership equation refected on their experiences building this hous- ing, and where it might be going in the future, in a panel session called "P3s — Not a Fad and Here to Stay." Here are some excerpts. Michael Coakley, moderator: Prior to World War II, what stu- dent housing at public institutions tended to be for was women, to keep them safe. It was the way soci- ety was at that time, and men were expected to live off-campus in boarding houses or with families that would take them in. The institution really didn't care. After the war, with the GI Bill, and with vast number of servicemen and women who wanted to pursue higher education, there was a huge infux of students and the local community could not provide enough hous- ing through boarding houses and families, so the institutions were pushed to provide housing. At the time, the states released a lot of money to the institutions, allowing them to issue bonds. That's when the frst wave of housing was built, the boxy, double-loaded corridors and common bathrooms, that type of thing. No one really knew how to run student housing at the time, it was a new ani- mal. They turned to quartermasters from the armed services because they had been hous- ing and feeding large numbers of servicemen and women and they replicated that model on a college campus. It seemed to work at that time. Then in the 1960s, we baby boomers hit the campuses and had much different expecta- tions. We didn't want house mothers, rules and regulations, to wear collared shirts to dinner, or for the institution to treat us like a child acting on behalf of our parents. That was when the next growth of housing took place, moving away from the boxy double-loaded corridors into something that was more desir- able by the baby boomers. At that time, the federal government provided a lot of loans to institutions to build housing on a very small footprint. If the bed was attached to the wall, it became part of the structure and could be covered by the loan, which didn't cover furni- ture. That's when the high-rises with the built- in beds and really ugly dressers came to be. Now the next phase is happening. There is an uptick in students coming to campus, more students than before, and we have aging facilities and need more beds. Many schools are looking to private partners to achieve that goal. There are a lot of issues that need to be worked through about people's acceptance of the concept, their willingness to do it and things related to that. Kyle, can you talk about, from your point of view when you look forward, what the mar- kets are going to be? Kyle Bach, president and CEO of Annex Student Living: Our model is perhaps dif- ferent from most people in that we tend to focus on underserved institutions with no housing or very limited housing. Our philoso- phy is very simi- lar to what they're building at Divi- sion I schools, but our product, atmo- sphere and experi- ence are delivered into these smaller tertiary markets. We don't talk about tiers in our offce, or allocate a tier to an institution. We think if a student or parent is send- ing their kid to a regional campus or community college, they should have the same experience that Division I institutions provide. We see a tremendous amount of growth in community colleges, as well as smaller institutions like regional campuses throughout the Midwest. Coakley: ACC has been in the game a long time. Noel, how have you seen the markets change and how are they expanding? Noel Brinkman, vice president of public-pri- vate partnerships, American Cam- pus Communities: We were formed in 1993 and have seen the industry evolve from then to its current state. As the industry has evolved in terms of product offering, you're starting to see institutions go the full gauntlet of developing honors colleges using pub- lic-private partner- ships. So it's gone the complete array of delivery services both on- and off-campus, urban environments. It's no longer a four-letter word that universities are using P3s, but really something they need to embrace for debt capacity, ease of effciency or speed of delivery. From our perspective we are starting to see a lot more transactions that are becoming a lot more complex. University of Kansas, Florida A&M; and University of California - Merced have all had procure- ments recently. They've all changed the indus- try substantially in terms of what universities are looking for beyond student housing. Case in point, at Merced, it's going to be about a $1 billion development that includes 1,800 beds of student housing and then another half of the campus, including academic buildings, research labs and more. That's not our core competency as a company, however. We're going to focus on the student housing por- tion and let other companies develop the infrastructure. Coakley: To the developer representatives here: Since the partnerships started to pick up speed in the late 1990s, how have the scope and size of projects changed? MICHAEL COAKLEY President, Coakley and Colleagues (moderator) KYLE BACH President and CEO, Annex Student Living, LLC NOEL BRINKMAN VP of Public-Private Partnerships, American Campus Communities