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Posted Jul 31, 2009, 2:14 PM
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BANNED
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Join Date: Jun 2006
Location: San Francisco & Tucson
Posts: 24,088
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Quote:
Friday, July 31, 2009
S.F. seeks a ‘super dorm’
City, schools struggle with student housing
San Francisco Business Times - by J.K. Dineen
When Menlo Capital Group Managing Partner Karan Suri decided to convert an empty former tourist hotel at 851 California St. to student housing, he knew there was a long-simmering need in San Francisco.
But he had no idea how dire the situation was. Within a week, nearly half of the building’s 100 beds had been leased by students with proof of enrollment in a San Francisco college or university.
“We already have 40 desperate students, and we have not started marketing to the schools yet,” said Suri. “It will be fully leased in the next three weeks. The desperation knocked my socks off.”
Suri said rents are $800-$950 per person for a double and $1100-$1300 for a single.
The reaction has prompted Menlo Capital to join the growing group of institutions, housing advocates, city officials and private developers hoping to address the growing need for a place for San Francisco’s students to live. The city’s 31 universities and colleges enroll 82,000 full-time students and 13,100 full-time faculty, according to a study by Grubb & Ellis. Nine of the schools provide some housing, for a total of 8,869 beds. That is roughly one bed for every 10 students.
A taskforce is looking at possible incentives to help make student housing a reality in San Francisco. The group includes the Housing Action Coalition and administrators from California College of the Arts, UC Hastings College of the Law, San Francisco State and other schools. Capstone Development, which has built 31,000 beds on 54 campuses across the country, is actively looking at possible development sites. The Mayor’s Office of Housing has also been involved in discussions.
Thus far most of the talk has focused on the concept of a “super dorm,” where a developer builds a large dorm that is then leased by multiple educational institutions. In Chicago, a number of institutions collaborated on a 1,750-bed super dorm, and similar projects have also been built in other markets. The problem is that San Francisco’s 15 percent affordable housing requirements makes building affordable housing to struggling students economically infeasible: Dorm rents would have to cover the cost of the affordable units.
Students have been traditionally excluded from affordable housing programs because their economic status is so difficult to assess. Many students have little or no income but ample parental support; others are on their own and surviving on a combination of student loans and wages,
“It’s like building low-income housing without any subsidies,” said David Meckel, CCA’s director of research and planning.
Doug Shoemaker, director of Mayor Gavin Newsom’s housing program, said “we are absolutely interested in trying to encourage the student housing movement to go forward. ... We understand that there is a need for student house and we get that it’s a category of housing that doesn’t fit well within the inclusionary housing ordinance.”
Shoemaker said several supervisors have expressed interest in sponsoring legislation that would facilitate student housing, but cautioned that the bill would be carefully crafted so it doesn’t become a loophole for market-rate housing developers looking to avoid affordable housing requirements.
“You don’t want to create a new problem to solve an old one,” said Shoemaker.
Public-private deals
Capstone Senior Vice President Dan Howard, who lives in San Francisco, said third-party student housing development generally requires some public-private partnership. At Arizona State University, Capstone developed 1,300 beds in two 13-story towers. There the city donated some of the land and helped expedite the entitlement process.
“We think there is a real need for housing. The real issue is what can students pay for rent and the cost and uncertainty of developing in a place like San Francisco,” said Howard. “There has to be some effort to reduce overall costs — whether that is cheaper financing, cheaper land, or a cheaper cost of construction, or higher density.”
Tim Colen, executive director of the Housing Action Coalition, said student housing should be a policy priority for the city because it would free up thousands of large flats students occupy from the Richmond to the Mission to the Haight. By moving students to more affordable dorms, larger units would be freed up for families, seniors and working professionals.
“The purpose was to get many, many thousands of students off of Craigslist and into housing the schools could provide,” said Colen. “You can’t argue that students don’t occupy a lot of family-sized housing units.”
Hurting recruitment
Meckel said the lack of housing hinders recruitment. CCA has 250 beds for 1,700 students, including 90 beds at the Julia Morgan YWCA in downtown Oakland. CCA also has 12 students at the UCSF dorm in Mission Bay.
“These small schools add a lot of energy to the economy and not having housing is a roadblock to getting the best talent to relocate here,” said Meckel. “Everybody is a little frustrated with our inability to do this. We certainly don’t need to be able to house everybody, but you like to be able to house the incoming class as they get settled.”
Hastings houses 280 students out of a total of 1,250, most of them at 100 McAllister St. The school has a waiting list for another 100 units, according to CFO David Seward.
“It’s a very competitive higher-education segment and this time of year everybody scurries around at the last minute trying to nest in a desirable school,” said Seward. “The market here doesn’t allow that. We book up in May. For kids making their final decision right now on where to go to school the housing options in San Francisco are very daunting. We have kids commuting in from Livermore.”
sduxbury@bizjournals.com / (415) 288-4963
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Source: http://sanfrancisco.bizjournals.com/...03/story1.html
For anybody liking this idea and seeking an investment, there are at least 2 publicly traded REITs that also develop third party student housing.
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