Capstone Development Partners, Shawmut Design & Construction and Elkus Manfredi are teaming up to build the first 1,000 beds of a multi-phase housing initiative at University of Massachusetts-Boston.
The students are coming! Every September, thousands of new college students arrive in Boston bringing their dreams along with linens, backpacks and all-important phone chargers. Most knew it would be tough to get into our schools, but few realized it would be even tougher to find an apartment.
Boston is experiencing an enviable run. Our colleges and universities are attracting the world’s most gifted students and faculty. Groundbreaking research at these institutions is drawing record amounts of investment. Immersed in this rich ecosystem, today’s students become tomorrow’s immensely talented workforce.
But economists and business leaders are warning that unless we create more housing that is affordable for the workforce, Boston’s ability to attract new businesses could be affected. The lack of middle-income housing can hinder Boston’s competitiveness. Many factors contribute to the problem, but the need to accommodate Boston’s student population is a leading culprit. Despite the enormous benefits our higher education institutions bring to the region’s economy, these same institutions exert enormous pressure on Boston’s housing market.
Some quick statistics: from 1995 to 2010, Boston’s student enrollment increased by 21 percent; in 2013, more than 36,000 students were living in off-campus rentals. Workers earning an income of $80,000 – well above the median income of $53,000 – are priced out of home ownership in seven out of Boston’s 15 neighborhoods and can afford to rent in only 51 percent of the rental market, with rental rates projected to rise five times the rate of income. Every student moving to Boston needs a bed. With each new enrollment, the pressure on a stressed housing market increases.
Recognizing the severity of the problem, the mayor’s office has launched an initiative that sets a goal of increasing new housing in the city by 53,000 units by 2030, with 26,500 units targeted for middle-income residents. A central element of the city’s plan is building new student housing in order to free up existing workforce housing.
The plan anticipates that building 16,000 beds of new student housing will open 5,000 private rental apartments to workforce families. Financing will take an estimated $2.2 billion investment. To achieve this, the city is partnering with colleges and universities to set specific student housing commitments and explore public/private partnerships with developers who bring expertise in developing market-rate student housing.
Building student housing is challenging for higher education institutions. Residence halls compete for the same capital dollars and limited real estate needed to fulfill pressing academic priorities. Increasingly, universities are turning to privately financed student housing to defray costs and reduce risk. This private development model can be self-sustaining by monetizing the cash flow from student housing payments, and may enable an institution to build much-needed housing without affecting bond ratings. The city derives additional benefit because private development is most often subject to taxes, unlike other institutional facilities.
For years, although private student housing developers have been active in other parts of the country, Boston’s schools have preferred to develop their own student housing. That changed in 2014 with Boston’s first large-scale private student housing development at Northeastern University and the Boston YMCA. The success of that initiative led the way. Northeastern now has another 800 beds currently under development by American Campus Communities with Elkus Manfredi and Cube 3 as architects.
The University of Massachusetts Boston is pursuing a similar model. Last year Gov. Charlie Baker authorized UMass-Boston to offer on-campus housing for the first time in its history. Capstone Development Partners, Shawmut Design & Construction and Elkus Manfredi are teaming to build the first 1,000 beds of a multi-phase housing initiative. This partnership enables UMass to shift away from calling upon adjacent neighborhoods to house all of its students.
Escalating land costs, construction costs and tuition are all conspiring against making housing available for students and for Boston’s workforce. Innovative design and cooperative efforts among schools, the city, neighborhoods and investors are meeting the challenge and keeping Boston among the world’s most vibrant cities.
John Martin is a principal at Elkus Manfredi Architects in Boston.
