What to Expect in the Student Living Space before 2030
The 2022/23 school year is in full swing. But for property owners, developers, and designers, the rest of the decade is going to be a time of significant change.
Think of it this way. Currently, an increased percentage of high school graduates are going to college. But by 2025, the number of students graduating will decrease. The biggest winners in the past few years were big schools in the southeast—and current investment reflects this. Investors have started to see student housing as a safe, lucrative investment. All of this makes for an intriguing decade in the student living space.
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Five Strategic Student Housing Trends to Watch
As trends shape up, understanding where to build, what the next generation wants, and what the landscape will look like in 2030 will be key to maintaining momentum. And that’s what we’re trying to answer today. Following recent articles on this year’s trends, a fall turn recap, and an exploration of mega-amenities, we’re taking a bigger-picture approach.
Today, we’re looking at the big things coming over the next seven or so years and looking at how it will impact the student housing space.
Over the course of the past few years, developers have worked to open new spaces. Seeing the financial benefit of student housing, developers have ramped up investments in properties across the U.S.
Will Student Housing Business’ Top 50 look the same in three or five years? Will new players enter the market? And in turn, where will competitors invest? How will their spaces compete with yours?
Plus, you can’t forget on-campus competition. Residence halls are taking steps to renovate their spaces and add amenities as well. Many on-campus properties are beginning to look a bit more like off-campus ones each year. Maybe the amenities won’t be as bold, but the experience is.
Privacy and wellness—top selling points for off-campus players—are finding a place in residence halls’ offerings. Study spaces won’t simply be a white-walled room and a table. This… could help keep students on campus and out of apartments for an extra year.
Knowing this, owners and developers will need to consider what it will take to stand out—without breaking the bank.
Decreasing Base of Students
One of the biggest worries among colleges and the businesses that surround them is the enrollment cliff. One of the long-term aftereffects of the 2008 financial crisis, decreases in births during the recession will come to a head after 2025.
According to data from Higher Ed Magazine, the number of 18-year-olds is set to peak at 9.4 million before starting a nosedive that will last until the end of the decade. By school year 2029-30, the number of 18-year-olds will drop to roughly 8 million and the number attending college will drop from roughly 3.8 million to 3.3.
And this is assuming that the rate of students pursuing a postsecondary degree remains consistent. Rising interest rates could deter borrowers and co-signers from taking on debt. The significant increase in homeschooling during the pandemic could change the way students think about education. Pair this with questions on the value of college—and it might not just be a smaller base of potential applicants.
For those in the student housing business, this is going to have a lasting impact—and bring up a multitude of questions. Will enrollment continue to increase in southeastern states? What will the next generation expect from your communities? What will it take to compete?
Changing Spaces, More Variation
Student housing is by no means a short-term investment. And even if the pandemic is in the rearview, it is still affecting the way the way that developers have planned spaces. It takes time to build a space. And developers have spent the past year ramping back up their building activities.
In turn, spaces opening in 2023, 24, 25 and beyond will reflect the landscape of 2020 and 21. For example, a property will feature increased privacy and personal space—necessities of the past two years. And this will set a standard. The necessity will become a benefit—and in a competitive landscape, the benefit will become a necessity.
New builds aren’t only going to have more beds (as we’ll discuss below), they’ll have more square footage. And the square footage won’t simply be dedicated to intriguing amenities, it’ll make residential space more palatable. One of the biggest things shaping up is development of diverse room offerings. In off-campus spaces, it’s not simply going to be a 2- 3- or 4- bed unit. VIP suites are becoming popular and six-bedroom options are available, but one-bedroom spaces are picking up too.
Therefore, even those who don’t have “new” properties will need to rethink rooms throughout the decade.
Bigger Student Living Communities
One of the biggest ironies, at least in this writer’s opinion, is that throughout the pandemic, developers planned mega communities. At a time when social distancing was the norm, plans for 900-1,500 beds were in the works. And with things normalizing, the plans are paying off.
750-bed off-campus complexes will start becoming the norm throughout the decade. Many will take on significant acreage to create walkable villages that include all the necessities for gracious living.
In a recent article on Student Housing Business, Core Spaces President Dan Goldberg highlighted some of the company’s plans as they work to build one of the nation’s largest student housing spaces in the country.
Located near Clemson University, the company intends to build a 140-acre development to create a 4,000-bed walkable village. And throughout the decade, this will turn into a 325-acre mixed use site featuring some… incredible offerings.
Will this become the trend? One can wonder. The village-style student housing development offers a ton of outdoor space, which has become a prioritized amenity in recent years. It’ll offer shops, providing developers revenue they don’t have to manage or hire for. And there will be a bit more breathing room. Naturally, finding that much prime space near a college might pose a challenge.
The mega amenity isn’t going anywhere. If students will pay for it, the risk is low. But as we mentioned in an earlier blog, balancing ROI with the wow factor is critical. Over the course of the decade, amenities will evolve.
Maybe this comes in the form of de-densified communities lush with outdoor space, or focused offerings built to prepare students for the real world. But it’s likely that in the next seven years, locations—even under the same ownership groups—will cater to a local audience and the individuality of students.
Much like unit diversity, amenity diversity will become a selling point. When multiple facilities will offer the same choices in rooms, having something that stands out will become a competitive advantage. Naturally, the question is… what will make you stand out?
Morgan Li: Here for Your Student Housing Furniture Needs
As one of the fastest growing manufacturers of hospitality-grade furniture for the student living space, we’re proud to support developers, architects, and more.
From the bedroom to the bathroom, kitchen to living room—and even shared spaces, our custom casegoods, furniture, and more can transform a space and create an unforgettable experience. 2022 was our biggest year in student housing so far following the grand opening of ōLiv Auburn and Hub Tampa, two projects totaling more than 1,700 beds.
Paired with previous successes at student apartments near USC, University of Illinois, and Temple University, and we’re continuing to get the job done on time and on budget. Get to know more about our expertise and get in touch when you want a student housing furniture partner who does more.