Spoiler alert: They don’t like group bathrooms.
Following a 2013 national survey with over 7,000 responses, J. Turner Research produced a detailed report: “What Millennials Want: Resident Preferences in Student Housing Design and Amenities”. They conclude that “dorm days are over” and that “to satisfy both cost and quality of life requirements, most students have moved (or desire to move) off-campus into modernized student housing communities,” but there is certainly still a clear way forward for the on-campus student housing market. While most Millennials have made their way from student housing to the workforce, we can assume that this trend will continue and possibly even intensify as higher education institutes transition from housing millennials to the Generation Z era.
What is brutally clear is that traditional dorms can negatively affect enrollment numbers. Similar to their Millennial counterparts, Generation Z students (and their parents) simply expect more: Ample storage, private bathrooms, accessibility to high-speed internet, resources for electrical devices such as outlets and ports, attractive common areas that include fitness options and study areas, mid-rise modern structures, and living room/kitchen areas all while being civically responsible in a sustainable environment. And, they want this at a competitive price. The traditional, mid-20th-century dormitory with cramped double-occupancy rooms, group bathrooms, failing infrastructure, low ceilings, and undersized wardrobes/closets is often the negative tipping point for visiting high school students and their parents.
In a fiscal environment that frequently does not allow post-secondary institutions to easily invest in new housing facilities, the slack is often taken up by private developers who can meet market demand with off-campus housing. Although a very popular option, these new, market-driven off-campus housing complexes can significantly reduce revenue streams from on-campus housing. However, as noted earlier, there is room for optimism for on-campus housing in the form of creative financing solutions and a focus on location.
As the realtors often say, location is crucial: A significant majority of students want to be near to campus; close enough to be able to leave their cars parked at home while they walk or bike to class. This kind of proximity is frequently a problem for the private, off-campus developer (who may be building 2 to 3 miles away from campus) but is clearly a baseline amenity for on-campus housing.
Of course, it eventually comes down to the dollars. Dwindling financial support for public institutions, increasing operating costs, and a crippling backlog of deferred maintenance work make it difficult to find and/or allocate funds for new capital construction. Colleges and universities are faced with stiff competition from both benchmark institutions and off-campus housing developers. Fortunately, where there is a need, solutions do tend to arise.
Large off-campus housing developers now offer public-private partnership (P3) development solutions to larger institutions. In return for long-term land leases, they will finance, design, build, and operate student residence facilities on campus. Smaller and more flexible development partners like our own Luckett & Farley Development can offer an even broader range of similar, customized financing options for smaller institutions that cannot support the kind of market required by the big developers.
There is nothing that the off-campus developments offer that cannot be matched on campus with the appropriate development partner. The trick, as always, is to remain nimble and to respond to what the customer wants. Take some time to download and read the J. Turner Research article; it’s a fascinating dive into the expectations of a generation and a solid foundation of expectations for Generation Z to come.
For more information on Luckett & Farley’s student housing portfolio, click here.