Student housing growth slows down
In 2015, no development permits were approved.
Nov. 05, 2015
In fiscal year 2015, Columbia didn’t approve any building permits for student housing. The reason, City Planner Pat Zenner said, is that there were no pending plans from developers.
This is a contrast to housing development in Columbia in the last decade. Zenner said student housing development activity “ramped up” around 2009 and reached its peak in 2013. During that time, the city approved three to four new plans annually.
In fall 2013, there was an oversupply of 902 beds in Columbia, according to previous reporting.
Zenner said student housing complex construction and applications have declined after a period of rapid development. The only student complex being prepared for development now is a project from American Campus Communities on Providence Road and Turner Avenue.
Rusty Strodtman, a member of the Planning and Zoning Commission, said he thinks developers are “letting the dust settle.”
“My assumption would be that everybody is trying to see how things settle down and (if) there is still a demand for housing,” he said.
Like any other commodity, finding the right amount of student housing is a relationship between supply and demand.
Columbia Housing Authority CEO Phil Steinhaus said there “tend to be peaks and valleys” in development because it takes considerable time to bring projects to fruition. Once a demand is identified, the process of buying land, building a complex and filling it with tenants can take two to three years.
He said higher enrollment numbers and overall community growth contribute to higher demand. This year, university enrollment is higher than ever with 35,050 students.
Zenner said developers might have been more enthusiastic to invest in student housing complexes in 2011, after the housing market crash, because it is easier to finance multifamily buildings.
“When the housing market generally suffers and difficulty exists for individual homeowners to be able to obtain mortgages, often multifamily (housing financing) flourishes,” he said.
Zenner said the conditions for student housing all came together in “the perfect storm.”
Steinhaus said an excess of student housing can be good for permanent Columbia residents too, particularly low-income families. Building apartments specifically for students frees up other properties around the city and, when renters have lots of options, competition keeps prices low.