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Student-housing changes in the Twin Cities mirror trends elsewhere

MinnPost photo by Corey Anderson
412 Lofts at S.E. 4th Street and 12th Avenue Southeast in Dinkytown.

It’s a bit jarring to walk around University of Minnesota campus these days. Huge new apartment buildings are popping up like gophers out of their holes. For example, the Marshall is a new apartment building that can house almost 1,300 students in Dinkytown. (It even has a Target on the first floor.) Likewise, Washington Avenue in Stadium Village is now lined with five- and six-story buildings. Even Sally’s, the famous sports bar with an overly attractive rodent mascot, has had to move into a new building.

Many of these new apartment buildings offer amenities like granite countertops or community rooms that might seem odd to people who remember the spartan housing of their college years. But they’re part of a trend toward newer high-end “luxury” student housing that is indeed a far cry from the “Animal House” image of students living in squalor. For many students, the rise of these new apartments is a long-awaited sign of progress.

Impact on affordability

One of the premises surrounding the new construction is that student demand for housing near campus is increasing because, increasingly, students prefer living within walking distance to campus. For example, when justifying some of his project proposals, developer Kelly Doran was fond of saying that the number of noncommuting students attending the university has increased from 25 percent to 60 percent. Those kinds of trends, along with the new Green Line light-rail line, threaten to shift the housing dynamics for the large school, and might make the school’s many parking ramps less profitable.

Chris Iverson, who graduates from the University of Minnesota this semester, was one of the people curious about how these new five- and six-story buildings would impact neighborhoods around the U. For his senior urban studies project, which he recently posted to streets.mn, Iverson studied how the construction of the new buildings around campus affected the traditional student housing market, duplex and older, smaller apartment buildings concentrated in the neighborhoods surrounding the campus. Compared to private homes, it’s difficult to find data on rental properties, so Iverson combed through online rental listings and compared them over time. He found that the recent apartment construction might have lowered prices for students living in more traditional duplex-style homes.

“People against these kinds of projects claim that luxury housing units are only for rich students and their well-off parents, and removes affordable housing around university area,” Iverson told me. “But there’s an interesting supply and demand system, where sucking up students from older units into high-amenity living makes older housing options less desirable.” 

According to Iverson, rental properties that have traditionally been seen as “cash cows” for university-area landlords might be less valuable, and forced to compete with the new buildings.

Housing tensions around St. Thomas

Meanwhile, just down the river in St. Paul, the University of St. Thomas and St. Paul are struggling to figure out the best way to build student housing. As St. Thomas has shifted its St. Paul campus to focus more on undergraduate students, neighbors in the area have become concerned about the increase in the density of student houses. Common complaints include late-night noise and occasional vandalism due to student parties.

Josh and Laure Capristant live on Fairview Avenue close to the university campus, and would like to see the construction of more residential density along Grand Avenue. According to the Capristants, a surface parking lot at the corner of Grand would be an ideal place for some residential density.

“It’s been highly contested and contentious,” Josh Capristant told me. He serves on the West Summit Neighborhood Advisory Committee, a group intended to calm tensions around the school. “For years here there’s been no ground broken on any of that housing [along Grand Avenue]. I’m an architect and do some planning, and I’d like it to be denser. But the big problem is that the university only has 40 percent of its students living on campus.”

In hopes of spurring denser apartment development along Grand, St. Paul recently re-zoned the area to increase the potential for density around intersections. 

Russ Stark is the City Council member in the area, and has been trying to balance the concerns of neighbors with the institutional needs of the school.

“There’s been a supply problem one way or the other,” Stark explained to me this week. “And the market’s been taking advantage of that. There’s this push and pull. Our interest in the city is to push more toward apartment buildings, as opposed to using the single family homes. But part of the solution is for UST to build more housing on campus as well.”

Neighbors are hopeful that apartments can be built somewhere, on- or off-campus, which would ease some of the tensions around the conversion of single-family homes into student living spaces.

West Grand Zoning Study Area, Macalester-Groveland, St. Paul
Saint Paul Department of Planning and Economic Development
West Grand Zoning Study Area, Macalester-Groveland, St. Paul

 

Avoiding the student ghetto

Maybe “luxury student housing” seems like a paradox whose time has come. Years ago, St. Paul instituted a zoning ordinance that limits the number of “student houses” that can be built on any given block, in an attempt to prevent the neighborhood from becoming a student ghetto. While one of the concerns was that the ordinance would limit supply and drive up prices for cash-strapped students, according to Stark that hasn’t happened.

In many ways, a university campus seems like an urbanist dream, filled with walking, density and street life. But because college students are different from many other people in the city — they’re often active late at night, are willing to live at higher densities, and are full of desire for new social experiences — these differences inevitably cause tension. Iverson’s research, which looked at four different Big-10 college towns, reveals that the Twin Cities’ student housing shifts are part of a much larger trend toward newer and nicer apartments.

At this point, it remains to be seen whether the housing trend is sustainable. Many of the new buildings around the University of Minnesota are having trouble filling up. One thing is for sure: Student neighborhoods aren’t like the rest of the city. Restrictions on rental housing and the boom in new construction means students will have more housing choices in the future. “Student ghetto” neighborhoods, full of dilapidated homes and couches placed on curbs, might just become a thing of the past.

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Comments (8)

  1. Submitted by jody rooney on 12/19/2014 - 11:29 am.

    And we wonder why

    student debt is increasing.

    • Submitted by William Lindeke on 12/19/2014 - 12:12 pm.

      part of the picture

      I certainly agree that it’s part of the picture. One of my points is that student housing has been more expensive than it “should be” for some time.

      To me, the larger picture around debt is ever increasing tuition.

  2. Submitted by Karen Sandness on 12/19/2014 - 03:12 pm.

    All those new buildings springing up within the space of a year

    or two–I’m not surprised that it’s been difficult to fill them up. For all practical purposes, all the new construction from Stadium Village to I-35 is luxury student housing. I wonder if some of them, especially those farther from campus, will eventually be turned into non-student housing.

  3. Submitted by David Markle on 12/19/2014 - 03:53 pm.

    The U of M’s new housing scene

    The rents around the University of Minnesota’s main East Bank campus have gone into the stratosphere, with many units apparently priced around $2,000 per month. This, plus tuition costs that have greatly increased over past decades, means an education at our land grant tax-supported University has become quite expensive indeed, for many students. It seems that parents and student loans must be the indirect financial basis for the boom in new student housing construction. But one trend that’s received little public notice is the obvious rise in the number of foreign students living near campus. For example, I’d guess that a majority of those living in Riverton’s long-standing and quite nice Chateau high rise may be Chinese nationals. And not all foreign students bunch up as room mates; I know of one whose parents apparently bought a house for her to use while in school. The University and housing developers alike must see these foreign students as great sources of revenue: very fine, but it alters the market for others seeking housing.

    • Submitted by Steve Titterud on 12/20/2014 - 02:18 pm.

      The foreign student market is no doubt involved in…

      …the stratospheric rents, as many of them come from highly-favored families with wealth in their home country. The local rents – even student housing at $2,000 a month – is puny to those who are accustomed to far higher prices.

      Look at what the influx of princelings and princesses – and/or their money – has done to the Vancouver real estate market – blowing prices beyond the stratosphere, to the point where locals can’t afford to buy – NOR SELL – since they’d have to buy another property to live in and couldn’t afford the new balance even after selling the old property – a curious kind of trap.

      There is data on enrollment numbers at the U of MN by “Home Location” available at http://www.oir.umn.edu/student/enrollment/term/1149/current/12883 and doing a little arithmetic with the 6,528 “foreign” students vs. the other categories’ sum of 44,619 – the “foreign” student population is nearly 15% of all students.

      Of the 6,528 whose home is outside the U.S., I would be surprised to find that very many of them come from poor families. No doubt there are some, but I’d guess few.

      That number of foreign students can fill quite a few of those luxury apartments, and without them, the market for those pricey units would be drastically reduced.

      So the luxury student housing boom is just another example of how the perception of college students has, over the years, been turned from a fine investment (see NDEA act years ago) into a market where profiteers gouge as much as possible. The policies and practices of the University fully support this trend, as the institution also gouges the students. Don’t be fooled by the much-ballyhooed tuition freezes – this is pure window dressing.

      • Submitted by Steve Titterud on 12/20/2014 - 09:32 pm.

        Interesting related data from Yale Economic Review…

        http://www.yaleeconomicreview.org/archives/294

        It casts more light on the economic impact of Chinese students in particular – though not specifically about housing, but rather the total dollars spent in the U.S. by Chinese students. It includes the following:

        “Based on Institute of International Education, 60% of Chinese students are supported by their families. In addition to tuition, they often spend a large amount of money preparing to study abroad.

        According to the Chinese National Bureau of Statistics, the average annual salary is $3,837 per capita, and the annual household income for the top 10 percentile is $10,314, far less than the average cost of a year of U.S. undergraduate education or that of a year of private school expenses. These values indicate that it is difficult for an average Chinese couple to afford international studies for their child.”

        It would seem to be an extremely tall order for the average Chinese family to send their child to the U.S. for their college years. And that $10k income for the top 10% is misleading, as it obscures the fact that the top 1% in China own about 1/3 of the wealth. http://english.caixin.com/2014-08-04/100712733.html

        So within that 1% (which represents quite a few people, considering the population of China), the cost of an American university education is not nothing, but hardly worth worrying about.

  4. Submitted by mark wallek on 12/20/2014 - 11:12 am.

    it works out

    With parents assuming the lions share of responsibility for tuition who needs non luxury living. I’m sure you won’t find that rare student, the one working/paying their own way, living on the high end. This is for profit spending, and has nothing at all to do with education, like the business of sport on campus.

  5. Submitted by Valerie Hurst on 12/22/2014 - 03:00 pm.

    I can’t help but wonder what these students are majoring in…if they graduate without a job lined up and/or parents to support them they will be in for a rude awakening when it comes to finding a new apartment.

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