Student Housing Market and Feasibility Study U NIVERSITY OF M ARYLAND AT C OLLEGE P ARK
ANDERSON STRICKLER, LLC 18310 Montgomery Village Avenue, Suite 520 Gaithersburg, MD 20879 August 15, 2005
TABLE OF CONTENTS U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
Executive Summary .................................................................................................... 1 Overview................................................................................................................................................... 1 Summary of Existing Housing............................................................................................................... 1 Graduate School Peers .......................................................................................................................... 2 College Park Rental Market.................................................................................................................. 3 Housing Preferences .............................................................................................................................. 4 Demand and Gap Analysis .................................................................................................................... 5 Conclusion................................................................................................................................................ 6 Methodology ................................................................................................................ 8 Background ................................................................................................................ 10 Summary of Existing Housing.............................................................................................................10 Graduate School Peers ............................................................................................. 14 Housing System Overview..................................................................................................................14 Policies .....................................................................................................................................................15 Apartment Amenities...........................................................................................................................16 College Park Rental Market ..................................................................................... 17 Overview.................................................................................................................................................17 Occupancy and Rental Rates..............................................................................................................17 Amenities and Policies .........................................................................................................................19 Where Students Live............................................................................................................................19 New Construction................................................................................................................................23 Where Students Want to Live ..........................................................................................................25 Housing Preferences ................................................................................................. 28 Factors Considered in Choice of Housing......................................................................................28 ANDERSON STRICKLER, LLC
TABLE OF CONTENTS U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
Desired Amenities in New Student Housing .................................................................................29 Unit Configuration................................................................................................................................32 Married Students and Students with Children...............................................................................37 Demand Analysis....................................................................................................... 39 Overview.................................................................................................................................................39 Demand Calculation .............................................................................................................................40 Gap Analysis .............................................................................................................. 43 Overview.................................................................................................................................................43 Undergraduate Student Housing.......................................................................................................43 Graduate Student Housing .................................................................................................................43 Conclusion..............................................................................................................................................44 Development Budget and Project Pro Forma ....................................................... 45 Overview.................................................................................................................................................45 Graduate Student Housing Program ................................................................................................45 Costs ........................................................................................................................................................46 Rents and Occupancy...........................................................................................................................46 Financing..................................................................................................................................................47 Single Undergraduate Housing Program .........................................................................................47
ANDERSON STRICKLER, LLC
TABLE OF CONTENTS U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
ATTACHMENT 1: Focus Group Notes ATTACHMENT 2: Graduate School Peer Data ATTACHMENT 3: Rental Market Property Listing ATTACHMENT 4: Survey Tabulation ATTACHMENT 5: Demographics of Survey Respondents ATTACHMENT 6: Gap Analysis ATTACHMENT 7: Project Pro Forma
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
EXECUTIVE SUMMARY Overview In spring 2005, the University of Maryland College Park (UM) retained Anderson Strickler, LLC (ASL) to conduct a student housing market and feasibility study. ASL conducted the study to gauge unmet demand for undergraduate housing, to determine if UM was offering undergraduate students desirable unit types, and to explore the demand for graduate student housing. UM wanted to know if it should make adjustments to its housing stock in light of a significant increase in the supply of off-campus housing due to a recent zoning change. The market study included interviews with key stakeholders from the University and from the City of College Park, a graduate school peer analysis, student focus groups, a rental market analysis, a student survey and a housing demand analysis. The assignment also included a gap analysis and the development of financial pro formas for the construction of new housing. As a result of its analysis, ASL estimated that there is demand for 1,871 additional beds of undergraduate housing and 828 beds of graduate housing. The gap analysis showed that UM has a surplus of traditional beds and a deficit of suites and apartment units. Therefore, ASL recommends that the traditional housing slated for renovation (Caroline, Carroll, and Wicomico Halls) be reconfigured to suite-style housing more popular with students, and that UM plan for development of apartment housing for graduate students. Once these two priorities are addressed, UM should consider new construction for undergraduate housing. In preparation for the next planning phase, ASL has provided two pro formas, one for undergraduate housing and one for graduate housing.
Summary of Existing Housing UM has a housing system of 36 residence halls for undergraduate students in six residential communities with capacity for 8,266 students. There are two alternative housing options for undergraduates who wish to remain in a student-oriented living situation that add approximately 3,300 beds to UM’s housing stock: single-student apartments (South Campus Commons and University Courtyard, both public/private partnerships) and fraternity or sorority housing. Thus, there are a total of nearly 11,600 undergraduate beds in University and University-affiliated housing. The Universityaffiliated option for graduate students is Graduate Hills and Graduate Gardens, together containing approximately 475 beds in off-campus apartments under a public-private partnership. There are 22,933 fulltime undergraduate students (as of fall 2004) that live as follows: 8,266 on campus, 3,314 in University-affiliated housing, 6,340 rent off campus, 4,784 with parents or relatives and 229 own their own home, as illustrated in Figure 1.1 Fifty percent of UM’s fulltime undergraduate students live on campus or in University-affiliated housing.
1
The numbers of undergraduate students who rent off campus, live with parents or relatives, and own their own home are based on
survey respondents’ living situations. Therefore, these figures should be considered estimates.
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
Live with Own home
parents/relatives
1%
21%
Live on campus 36%
Rent off campus 28%
Live in Universityaffiliated housing 14%
Figure 1: Undergraduate Student Residence
There are 6,355 fulltime graduate students (as of fall 2004) that live as follows: 476 in Universityaffiliated housing (Graduate Hills and Graduate Gardens),5,039 rent off campus, 262 with parents or relatives, and 578 own their own home, as illustrated in Figure 2.2 Live with
Live in University-
parents/relatives
affiliated housing
4%
7%
Own home 9%
Rent off campus 80%
Figure 2: Graduate Student Residence
Graduate School Peers ASL reviewed the graduate housing offered at the following peer institutions provided by UM: University of California, Berkeley; University of California, Los Angeles; University of Illinois at UrbanaChampaign; Massachusetts Institute of Technology, and the University of Michigan-Ann Arbor. The median number of beds offered by peers is 1,673, a median of 14% of graduate enrollment. If UM were
2
The numbers of graduate students who rent off campus, live with parents or relatives, and own their own home are based on survey
respondents’ living situations. Therefore, these figures should be considered estimates. The numbers of students living in Graduate Hills and Graduate Gardens is based on number of units.
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y to offer campus housing to 14% of total (full-tiome and part-time) graduate enrollment of 9,793, it would provide 1,370 beds. With its University-affiliated housing (Graduate Hills and Graduate Gardens), UM’s 476 beds provide housing for 5% of all graduate students, a shortfall of 9%—about 900 beds—compared to the peers’ median. Graduate housing at most peer institutions is experiencing high occupancy levels. Three institutions indicated that demand for housing for single graduate students was not being met. The most common unit type for single graduate students is a two-single bedroom apartment. All five peers offer studio or efficiency units, one-bedroom units, and two-bedroom units. Four peers offer three-bedroom units, and one offers four-bedroom units. Two universities have recently developed new residence halls for graduate students. MIT opened a 700-bed apartment complex in 2002 and UCLA opened a 1,287-bed apartment complex in 2004. Monthly unit rents reflect the variety in unit types and policies (e.g., lease term, inclusion/exclusion of utilities). For apartments rented by the bed, with single-occupancy bedrooms, rents range from $609 per month, per person in a four-bedroom unit to $1,194 per month for a one-bedroom unit. Typically, utilities are included in apartments rented by the bed. For apartments that are rented by the unit, the median rent for a one-bedroom is $819 and the median rent for a two-bedroom is $1,0203. UM’s rates at Graduate Hills and Graduate Gardens where a one-bedroom unit is $807 per month and a two-bedroom unit is $983 per month is priced just below the median of its peers.
College Park Rental Market Rental vacancies are low citywide. Until a few years ago the Route 1 corridor zoning laws allowed only retail and office space development. A revision passed in 2002 allowed mixed-use and residential projects, including apartments, townhouses, condominiums, and single-family homes. Because of this change, College Park has seen an increase in residential construction. There are new apartments coming online in the UM area over the next three years, although not all of these projects are targeting students. Table 1 is a listing of projects that are under construction or are planning to begin soon. Studentoriented communities are marked with an asterisk. Some will be rented by the unit; others will be rented by the bed. It is estimated that the housing described below will house between 3,327 and 4,000 residents depending on the number that will live in each of the 693 units. Property Berwyn House*
Number of
Number of
Units
Beds
72
Status Approved
Jefferson Square*
245
Proposed
Northgate Condominium
376
Proposed
The Woods at Mazza*
624
Preliminary approval
University Town Center*
910
Under construction; July 2006 opening
1,100
Under construction; fall 2005 opening
2,634
Total Units and Beds: 3,327
University View* Sub Total:
693
+
Table 1: New Construction in College Park
3
Utilities are included at three out of five institutions: UCLA, MIT, and University of Michigan Ann arbor. All utilities except
electricity are included at University of California Berkeley, and utilities are not included at University of Illinois Urbana Champaign.
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y ASL collected rental data on apartment housing in the College Park area through telephone interviews with property managers and the student survey as shown in Table 2. When comparing median market rents of $883 for a one-bedroom unit and $1,063 for a two-bedroom unit ASL found that graduate students living at Graduate Hills and Graduate Gardens are paying below median market rent. Single students (whether undergraduate or graduate students) are able to find one-bedroom units off campus at below median market rent while they pay just above the median market rent for two- and threebedroom units. Students who are married or have children (whether undergraduate or graduate students) pay between $30 and $142 more than median rent for the same size units.
Market
Median Monthly Rents Per Unit Efficiency
1BR
2BR
3BR
ASL Market Analysis
$735
$883
$1,063
$1,285
Graduate Hills / Graduate Gardens (actual)
$692
$807
$983
-
Student Survey – Single Students
-
$788
$1,120
$1,320
Student Survey – Married / with children
-
$1,025
$1,093
$1,406
Table 2: Comparison of Rental Rates
Housing Preferences In focus groups and on the student survey, students were asked to indicate the most important factors they considered in their decision of where to live for the 2004-2005 academic year. Affordable cost and ability to live where friends are living were the most common responses. On-campus residents also value the ability to walk or bike to class, while off-campus residents were more concerned with cost. Students living in University-affiliated housing (University Courtyard, South Campus Commons, Graduate Hills, and Graduate Gardens) value a private bedroom and the ability to walk or bike to class most highly. Based on information gathered from focus groups, ASL tested six unit types appropriate for single students at estimated per-person rental rates. Figure 3 shows how survey respondents answered when asked which unit was preferred, acceptable, or unacceptable (they would not live there). Almost a quarter of undergraduate survey respondents who indicated a unit preference prefer the four-single bedroom apartment over other unit types. The two-single bedroom apartment and the two-single bedroom traditional (semi-suite) were both preferred by 13% of those that indicated a unit preference. When ‘preferred’ and ‘acceptable’ responses are considered together, the two most desirable floor plans are the four-single bedroom apartment and the two-single bedroom traditional unit.
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y Preferred 2-Single Bedroom Apartment
13%
4-Single Bedroom
Apartment 4-Single Bedroom Suite 2-Single Bedroom Traditional 2-Double Bedroom Traditional
Would not live there
48%
24%
Apartment 2-Double Bedroom
Acceptable
47%
53%
9%
29%
38%
55%
11%
13%
5%
38%
34%
58%
47%
28%
48%
Figure 3: Undergraduate Student Unit Preference
When unit preference is calculated by class status, traditional unit types with a mandatory meal plan are preferred by more freshmen and sophomores than juniors and seniors. There is a natural progression of preference for units with more privacy and more amenities (such as a full kitchen), as students mature. When graduate student response is considered separately, the two-single bedroom apartment is preferred by more survey respondents than the four-single bedroom apartment (21% vs. 11%), both tested with a twelve-month lease.
Demand and Gap Analysis ASL calculated demand for undergraduate students and graduate students separately and found that potential demand for housing for fall 2004 from full-time undergraduate students who live off-campus is between 1,369 and 2,373 beds. Selecting the middle of the range, ASL projects potential additional demand from undergraduate students to be 1,871 beds. The calculated demand for graduate students is between 647 and 908 beds. Selecting the middle of the range, ASL projects potential demand from graduate students of 828 beds. ASL isolated the demand from each group of survey respondents—students living on-campus, students living off-campus, and students who live in university-affiliated housing—to conduct a gap analysis. The purpose of the gap analysis is to compare the supply of University and University-affiliated unit types to those unit types that are in demand.
Undergraduate Student Housing The gap analysis for undergraduate students is shown in Table 3 confirming that UM has a surplus of almost 3,100 traditional beds on campus, a deficit of 800 suite beds, and a deficit of 3,900 apartment beds. Overall, UM has a deficit of 1,553 beds. This analysis is based purely on student preferences and does not consider developmental objectives of Resident Life that would be supported by communitybuilding unit configurations.
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
Demand Off-
Unit Type
On-Campus
Campus
Surplus
Supply
U-Affiliated
On-Campus
(Deficit)
U-Affiliated
Traditional
448
2,136
458
6,154
3,112
Suites
69
1,467
241
1,005
(772)
1,354
4,380
2,580
1,107
3,314
1,871
7,983
3,279
8,266
3,314
Apartments
Total Demand: 13,133
(3,892)
Total Supply: 11,580
(1,553) Deficit: 1,553
Table 3: Undergraduate Housing Gap Analysis
Graduate Student Housing Table 4 shows the gap for graduate housing, concluding that there are 828 graduate students who live off-campus and 179 who live in University-affiliated housing who would live in newly developed oncampus housing were it available. Because University-affiliated housing (Graduate Hills and Graduate Gardens) provides housing for at least 476 students, the deficit for graduate student housing is 531 beds.
Demand
Supply
Surplus (Deficit)
Unit Type
Off-Campus
U-Affiliated
Traditional
171
38
0
(209)
Suites
22
3
0
(25)
Apartments
634
139
476
(297)
828
179
476
(531)
Total Supply: 476
Deficit: 531
Total Demand: 1,007
U-Affiliated
Table 4: Graduate Housing Gap Analysis
Conclusion Given the expected changes in the off-campus rental market over the next three years, including the introduction of at least 2,600 new apartment beds and approximately 700 new apartment units, the University is wise to look at the existing housing stock in a comprehensive manner. Thus far, the opening of over 1,000 beds at University View for the 2005-06 academic year has not affected the number of applications being received by UM’s housing office. As of June 30, the residence halls are booked for fall 2005 with a 1,000 person wait list. For planning purposes, the demand analysis and the gap analysis would suggest that any renovations to existing buildings aim towards reconfiguration to more popular unit types with private bedrooms and semi-private bathrooms. New construction should address the needs and preferences of upperclassmen and graduate students. Therefore, our recommendations are:
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EXECUTIVE SUMMARY U N I V E R SI TY OF M A R Y L AND ST U DE N T HOU S I N G M A R KE T A N D FEA S I BI L IT Y S T UD Y
Existing University Housing
Consider improving traditional halls by upgrading unit amenities such as air conditioning and community amenities such as quiet study areas, security cameras, and fitness centers or weight rooms. These are features that survey respondents noted as being most important when making a decision of where to live. Continue to house freshmen in traditional residence halls, as they are the most appropriate unit type for building a sense of community.
Continue with plans to reconfigure three traditional halls (Caroline, Carroll, and Wicomico) to approximately 650 suite-style beds. This will nearly close the suite gap of 722 beds. Developmentally, suites are most appropriate for upper division students.
New Construction
Plan to develop up to 828 beds of graduate student housing. It has been suggested that the Old Leonardtown site might be made available and suitable for up to 650 beds of housing. Although the University will lose 250 beds of undergraduate housing, the graduate student housing gap will be closed.
After reconfiguration plans and graduate student housing plans are implemented, plan to develop new undergraduate housing. As part of the plan, re-evaluate the off-campus market, enrollment projections, and student preferences. ***
Anderson Strickler, LLC would like to thank Dr. Patricia Mielke, Assistant Vice President for Student Affairs, and Ms. Maria Lonsbury, Project Specialist, for their assistance during the course of this assignment.
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