Real Estate is a local game and local policy decisions can make or break your investment thesis.
That’s why we’ve analyzed all student housing city decisions in the largest 200 cities nationwide. Our sample also includes the largest 25 student housing markets in the U.S.
This deep dive focuses on Q4 24 & Q1 25.
We cover an increase in building heights for affordable student housing in Madison, the elimination of single-family zoning in Cambridge, noteworthy projects, and a unique funding strategy.
As a bonus, we also dig deep into all student housing developers.
Purpose-built Student Accommodations (PBSAs)
Purpose-built student accommodation (PBSA) is an international term used to describe buildings, often multi-unit buildings, built for students.
Unlike traditional university dorms, PBSAs offer richer amenities, built-in facilities, and a more luxurious experience.
Based on our sentiment analysis of councilmember commentary in university towns, municipalities with a large population of students, look favorably towards the idea of increasing student housing inventory. Their goal is to increase affordable options.
This can be seen in the the following citywide decisions:
Cambridge, MA Eliminates Single-Family Zoning
Cambridge, MA, a university town with a population of 120,000 (~30,000 students) completely eliminated single family zoning.
While this change isn’t exclusively about student housing, it certainly represents an opportunity for a student housing developer to design and mass produce a PBSA in Cambridge.
In an exclusive interview with Burhan Azeem, a Cambridge City Council member, he stated:
Mass production is a key strategy to bringing down housing construction costs. That's why Cambridge created by-right laws so you can design a 4- or 6-story building across the city easily.
Burhan Azeem
Cambridge City Council
We’ve had a few conversations with student housing developers who are currently in the planning stage, but haven’t seen any concrete projects yet. If you are planning on developing student housing in Cambridge, feel free to reach out and we’d love to interview you for our Q2 edition.
Madison, WI Expands Downtown Student Housing Height Requirements
UW-Madison had ~52,000 students enrolled in 2024 and plans to add more for 2025. With pressure on increasing rents, the city council amended Section 28.071(2)(a)2 to increase downtown building height requirements for affordable student housing projects.
While developers can’t add additional feet, they can add additional stories. This means that many existing 4- to 6-story buildings can be redeveloped into 8- to 10-story towers while staying under the 284-ft absolute cap.
Two developers, Klein Development and Subtext have already initiated rezoning inquiries for 700-800-bed towers under the new rules, however, we haven’t recorded any formal applications yet.
Noteworthy Projects
Vale Student Housing, Tempe, AZ
The Tempe City Council approved the development plan for Vale Student Housing, rezoning the property from CSS and R-4 to MU-4.
The final project includes 277 student housing units with 865 bedrooms, designed as an eight-story, mixed-use building with an area of 578,773 sq. ft.
Skye Tempe, Tempe, AZ
We’ve covered Skye Tempe in our piece about mixed-use zoning in Arizona, and while it’s not exclusively a student housing project, it’s location suggests that it’s at least in part.
The 27-story mixed-use development with 306 units and a 5,800 sqft ground-floor commercial space is the last piece of the puzzle that finishes an impressive transformation from parking lots to a vibrant downtown in Tempe.
Editor’s note: Check out the google street view from 2016 vs. 2024.
Office to Student Housing Conversion in Cincinnati, OH
A 1980s office block was stripped to its concrete shell and re-leased in 2024 as “The Union on Taft”.
The office to student housing conversion yielded 103 fully-furnished units (studio to 5 bds) marketed to University of Cincinnati students.
The developer and owner, Uptown Rental Properties, is now trying to rezone the 5.5-acre property from Office General (OG-T) to a Planned Development (PD).
The goal is to add a 5,020 sqft Chick-Fil-A with dual drive-through lanes.
Texas Christian University is Expanding its Student Housing Portfolio
We’ve tracked 4 rezonings submitted by TCU in Fort Worth, TX to rezone a total of ~15.4 acres of TCU-owned land to MU-2 High-Intensity Mixed-Use Overlay.
Currently, all parcels are used for parking or feature vacant buildings.
We estimate that the upzoning allows for the construction of ~1,600 new beds.
Funding Student Housing Through Tax-exempt Bonds in Lubbock, TX
The city of Lubbock, TX approved a tax-exempt bond for a Class A student housing project at the intersection of Queens Street and North Quaker Avenue.
The developer is a non-profit company called Community Finance Corp (CFC) and they are building a 14 acres, 174 units, 510 beds 3-story building.
CFC was able to obtain the tax-exempt bond in exchange for a rent restriction program covering at least 50% of the units.
The project is called “Amplify Lubbock” and the bond transaction went through common conduit public finance authority (PFA).
This represents a very unique approach to building student housing that is commonly observed in affordable housing.
Tax-exempt bonds are typically 100-150 bps lower than typical financing.
Market Players
We partnered with the TD Developer Database to analyze their data on student housing developers.
We’ve found 351 active student housing developers in the US. ~70% of them are multifamily developers who also build student housing.
Interestingly, Chicago is the most headquartered city for student housing developers, followed by New York and Atlanta. Surprisingly, Los Angeles is not in the top 10.
Sample
Conclusion
Hope you enjoyed reading this Q4 24 & Q1 25 deep dive. We’ll be back with the Q2 25 report in July.
If you have any interesting conversions (from XYZ to student housing or from student housing to XYZ) please let us know and we’d love to feature you in our next edition.
Bye now,
Daniel Heller
[email protected]