More than 1,000 high-end luxury-apartment units are planned for around the University of Minnesota in the next two years, but Minneapolis is not alone in a development boom.
Across the Big Ten, university districts are experiencing a boom in off-campus student housing development, especially luxury, high-rise apartments.
“We’ve heard very clearly that we’re not an anomaly here,” said Minneapolis principal city planner Haila Maze. “There is a national trend in student housing to build sort of higher-amenity housing.”
There’s a push to construct in West Lafayette, Ind. — home of Purdue University — said development director Chandler Poole.
“The pressures we have here are pretty immense,” he said. “[There’s] tremendous pressure for more dense, nicer, student facilities with more amenities.”
For a variety of schools, the development boom is filling a need for housing close to campus, experts said.
“There’s absolutely a demand for student housing,” said Annette Irwin, city administrator in East Lansing, Mich. — home of Michigan State University.
Jeff Davidson, director of planning and community development in Iowa City, Iowa, said he also sees a trend.
“That’s a huge growing market right now,” he said. “And people are looking to invest money in those projects.”
'Up, rather than out'
Daniel Oberpriller, a prominent Minneapolis developer, said the housing boom is about more than simply meeting demand.
More expensive construction materials, high-priced land and students’ willingness to pay big for amenities all contribute to the decision to build luxury student housing.
Oberpriller said high-rise apartments, like his own upcoming 333-unit WaHu project, are a necessity near urban campuses.
“You have to go up rather than out because there’s not a lot of property,” he said. “More density in the air is more expensive.”
Developers are also competing for students’ attention, Oberpriller said, and the need to out-do each other is constant.
“All it takes is one person to build a nicer building than you, and somebody has to build a nicer building than that,” he said. “So it’s kind of a domino effect.”
Tom Carrino, economic development manager for Urbana, Ill., said he sees money as part of the equation but does the math a little differently.
During the economic slowdown, he said, financing large development projects wasn’t easy. Financial institutions are lending again, he said, making large-scale projects viable once more.
“I don’t know that the market really changed very much,” Carrino said. “But the lending situation, I think, has changed.”
Trending in the Big Ten
City planners and community developers across the Midwest, like Michigan State University community liaison Erin Carter, said students are willing to pay more for their apartments.
“Development companies have figured out that students are willing to pay for these things,” she said. “People see it as an opportunity to make money.”
According to Maze, students are not only attracted by the amenities or added safety of luxury housing but also proximity to campus.
East Lansing community development analyst Tim Schmitt said there’s a reason students are being drawn back to campus.
“When you’re out in that far suburban-type development, you’re sort of disconnected from the university and the city in general,” Schmitt said. “You want to be … closer to where things are happening.”
Students are sharing rooms less and less, said Iowa City’s Davidson.
Iowa City has passed a number of zoning code reforms, he said, so developers can only build units with up to three bedrooms.
Schmitt said the trend to one person per bedroom is the biggest trend he’s seen in the past 15 years.
‘A real delicate balance’
Proposals for new projects in Dinkytown have incited a showdown between developers and longtime business owners, who feel development will threaten Dinkytown’s historic character.
Minneapolis is not alone in this struggle. Experts said other Big Ten communities are trying to leverage new development with the preservation of historic areas.
“It’s a tremendous issue,” said Chandler Poole, development director for West Lafayette. “It’s a push and a struggle between trying to invite new development in near-campus neighborhoods, yet also protecting the historic neighborhoods that surround the campus.”
University of Michigan urban planning graduate student Matthew Lonnerstater said oftentimes the development is at odds with older neighborhoods.
“These tall developments don’t necessarily fit into the character of these older neighborhoods,” Lonnerstater said.
In the end, he said, it’s important to protect historical neighborhoods, but zoning departments have to remain objective in their roles.
“You want to bring in new development,” he said. “You don’t want to give up everything and ruin your neighborhoods in order to achieve that. It’s been a real delicate balance.”
The exception to the rule
The big question in city planning is “Which project is the last one?” Maze said.
For now, she said, they keep coming and low vacancy rates are a good indicator of continuing demand.
But at schools like Ohio State University and MSU, some are worried that soon there will be more housing than students. Although Columbus, Ohio, has added more than 10,000 new housing units in the past five years, very little of the development is actually happening around campus.
“There is no significant construction of new units currently underway in the university district,” said Ohio State spokesman Dave Isaacs
Even still, OSU student government President Taylor Stepp said the school is revamping existing buildings. He said that for students, it’s the quality of housing, not the quantity that needs attention.
In 2016, Ohio State will require sophomores to live on campus — Stepp said he worries there will be too much housing then.
Annette Irwin, East Lansing city administrator, said she shares the same concern.
“Eventually we’re going to have more apartments than we need,” she said.
For now, developer Daniel Oberpriller said he’s not worried.
“It’s still unknown how much the glass can hold, especially with the amount of density that is coming,” he said. “But it will come down to management, it comes down to amenities, it comes down to price, it comes down to being a good owner and manager.”