Point/Counterpoint: The Urban Rental Housing Affordability Crisis—Does the Student Housing Model Provide an Answer?
- Jan 21, 2015
Point: Look to purpose built by-the-bed housing
By Jeffrey Adler, VP and General Manager, Matrix
Affordability of rental housing has been termed a crisis in our largest metropolitan areas, especially inside the urban cores that have been revitalized by the demographic shift of young singles gravitating to 24-hour live/work/play city centers and the dramatic reduction in crime over the past 20-30 years that has enabled that shift.
The increase in land values and other obstacles that raise the cost of new supply are generally understood to result in the new supply that is feasible being targeted at the high-end portion of the market, at rents that on average are 50 percent higher than median market rents.
The underlying assumption is that people of modest means will only accept the traditionally accepted definition of an apartment home—full one-, two- or three-bedroom apartment homes.
Yet there is a parallel product design that addresses this same affordability issue directly and with quite satisfactory results—by-the-bed student housing.
Purpose built by-the-bed student housing addresses the affordability issue by reducing the space that is private (the bed/bathroom) and accepting shared domain over the kitchen and common living room.
Would people of modest income be willing to make this same trade-off?
Admittedly, the social challenges of applying this model to adults are not trivial, and for families with children even more so… But what are the viable alternatives? Is there no shortage of social service organizations, both public and private, perfectly capable of managing the relationship issues?
If we open our eyes and entertain the opportunity, we may find that the answers to affordability are already in the arsenal of the vibrant, creative, and competitive multifamily housing industry.
Counterpoint: By-the-bed restricts usage
By Jack Kern, Research Editor
This is fundamentally the issue of micro-units and shared congregate housing. Socially the distinction and stigma attached to living as an adult in less than a traditional unit is what has kept this from being readily adopted.
Further, lenders and institutional investors do not want these units because the exit is restricted to a like-kind use. If the ultimate trade is a value-add rental or a condo conversation, these units would scarcely work. Student housing-style residences by-the-bed are what was popular with a similar design to boarding houses in the 1950s, and sadly the limitations they exhibited have never been improved upon.
I think your assessment has similar issues of land and construction costs that wouldn’t drastically reduce the cost to deliver a bed. The only sensible alternative is adaptive re-utilization of public spaces where land cost is controlled by the municipality.
We welcome feedback from our readers—what is your take on the subject?