Student Housing Is Changing Fast. Public-Private Partnerships Are Key.

The ritual of dropping off a child at college for the first time follows a familiar script: Parents fill the car with too many belongings, drive to a freshman residence hall, make the bed one last time, and hope the randomly assigned roommate lives up to expectations.

 The mental image evoked by that scene, however, is likely out of date.

Student housing is changing as fast as college itself. The ability to adapt and meet basic facility needs and modern expectations for lodging will be a differentiator for institutions looking to reassure the market about the enduring value of a college education.

Fortunately, some colleges have already adopted an effective model to expand, modernize and reimagine student housing more efficiently — without the typical budget risks.

Just last year, my company, Gilbane Development, used innovative public-private partnership arrangements to help renovate and create nearly 16,000 modern student beds, making us one of the nation’s largest developers of student housing. While much more needs to be done, colleges and universities from California to Rhode Island are already modeling what works by expediting projects to market to meet current needs and bring future value forward.

To understand why, it is worth getting a full sense of the student housing landscape, which has similar dynamics to the broader housing conversation animating American politics: There is mismatched supply and demand.

Last year, for example, America’s top 175 universities could house only about a fifth of their undergraduates in on-campus housing. At the same time, privately owned, purpose-built student housing properties near campus were 95 percent occupied, and many recorded 99 percent or higher occupancy.

This mismatch has meaningful impacts on families. The misaligned market is putting upward pressure on housing prices as families are already navigating the high cost of higher education overall. Add in aging facilities in declining condition, and it becomes easy to see why educators and families alike are concerned.

But this is not just a supply issue. Expectations have also changed: Even at schools with enough housing, it might not be the right type. Students prefer apartment-style or suite-style living arrangements (just 21 percent prefer traditional dorms). Across institutions, more and more students are asking for single rooms along with robust social programming that fosters a larger sense of community, as well as elaborate resort-style amenities. Meanwhile, more and more upper division students are seeking to live on campus.

For colleges, this poses a significant challenge. The number of high school graduates is expected to peak in 2026, with a 13 percent decline by 2041. This decline will increase competition between schools for prospective students and add strategic urgency to the housing equation. At the same time, we are in a moment of rising costs for construction and steep budget cuts for universities.

Two recent partnerships demonstrate just how these challenges can be overcome.

Take Palm Beach Atlantic University (PBAU), where demand for housing far exceeded supply, previous master leasing agreements left off-campus revenue on the table for PBAU, and the school had limited internal development capacity that translated into fewer opportunities for enrollment growth.

The solution was a $240 million development that delivers a new, 25-story, mixed-use residence hall with 22 floors of apartment-style student housing totaling about 990 beds, as well as new dining, student health, recreation and parking facilities. The project closed in June, broke ground in October, and will be completed in time for the 2027-28 academic year.

A creative structure allowed the project to be financed through revenue bonds issued by a nonprofit lessee, preserving PBAU’s debt capacity and credit.

A similar effort at Eastern Michigan University led to the renovation of nearly 1,500 beds and the creation of 700 new ones as part of a $212 million campus housing initiative — an effort that, one year after occupancy, has increased EMU’s revenue per bed by 30 percent while also reducing operating expenses by 30 percent. It did this through an effective and efficient utilities partnership to reduce emissions and costs, not by charging families more for housing.

These are success stories for a sector that has experienced extreme stress over the last few years. These projects also serve as reminders of how private sector innovation and strategies can unlock new opportunities, even in challenging contexts.

The need won’t go away any time soon. Even as demographics shift and new dynamics like the rise of artificial intelligence and resurgent trade industries continue to emerge, millions of high schoolers will continue to apply to college, and they will need a place to live. 

Students may just have a bit more choice in a decade or so. And, when they do, the colleges that are taking steps now to efficiently and affordably confront the student housing challenge will be the most attractive options.

James Patchett is the chief executive of Gilbane Development Company and a former president of the New York City Economic Development Corporation.