Q&A: Coldwell Banker Commercial’s Dan Spiegel Talks Student Housing

As universities across the nation return to school this fall to deal with the ongoing COVID-19 pandemic, how will the student housing market fare? To find out, we caught up with Dan Spiegel, managing director at Coldwell Banker Commercial.

Q. Let’s start off with the big question – How much impact will COVID-19 have on the student housing industry?

A. The impact will depend on how successful the various back-to-school models work for colleges and universities. There are several variables in play: (a) the percentage of students who return to campus vs study from home; (b) the percentage of international students who return; (c) and the university market location – urban vs. rural. Further, since many students signed 2020-21 leases pre-COVID, the true impact may not be clear until the following year, depending on where we are with the pandemic. At the same time, if students/parents demand single rooms vs doubles, then despite attendance changes, overall demand for bedroom units may increase.

There is no consensus on how to reopen this fall. According to The Chronicle of Higher Education, 21% of schools plan to have in-person classes; another 24% plan to operate primarily online; and 16% plan to operate a hybrid model. Whether predominantly online or not, many schools (including Harvard, Princeton, Georgetown, Duke, and Texas A&M) are allowing only 40-50% of students back on campus at any one time. 27% of schools are still undecided.

A sizable drop in international student enrollment will have a big toll on U.S. higher education, not only in subsidizing financial aid for domestic students but also in contributing to the U.S. economy ($41B in 2018/19 per NAFSA). At 5.5% of the U.S. higher education population (per IIE), international students are a key demographic for student housing in many markets.

Q. What parts of the country do you think will be most affected by any changes in the student housing model?

A. Urban campuses, where a sizable portion of the student population lives in the same metropolitan area, are likely to be negatively impacted because students, or their parents, may not feel it is worth living on campus when a study-from-home option is available. Universities which attract primarily out-of-state students may maintain stable demand, even if all students are not on campus per se. There is still the “college experience” which many students and parents value.

Universities planning to be fully remote this fall, including the entire California State University system, several UC’s (Berkeley, Irvine, Los Angeles, Santa Barbara) and Rutgers, may find students choosing to stay home instead of paying for off-campus housing.

Universities offering in-person classes could see demand for off-campus rentals increase as schools reduce the density of on-campus housing. Large public schools with student housing built around them that plan to bring some or all students back to campus include all nine Massachusetts State Universities; the Texas A&M University system; Purdue; the University of Illinois system; Temple; Penn State and the University of Florida.

The most selective universities – including Stanford, Harvard, Columbia, Yale and Princeton – will see the least impact despite anticipated declines in international enrollment as they increase their acceptance rates to fill seats.

Q. Student housing projects have always been dense and with lots of shared spaces. If creating more separation is important, are there some creative solutions to de-densifying student spaces?

A. With the construction of modern student housing over the past decade, both private and public, there was already a trend towards more single rooms within suite style apartments. Perhaps as homes grew in size over the past few decades, and fewer children shared rooms with siblings, there was already a trend away from shared dorm rooms. One solution is simply to eliminate two-roommate rooms and offer singles only, or singles within apartment suites. Once the appropriate density is achieved, the next step is to embrace touchless access products for common areas such as gyms, exterior and interior doors, along with frequent cleaning to re-assure student families that they are in a safe environment.

Common areas like studies and lounges are being redesigned to discourage large group gatherings – with rearranged furniture and more open space. Other safety measures include upgraded air filters in residential units to MERV 9, which captures bacteria and viruses.

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