Colleges go into real estate to help US staff find housing

(Bloomberg) — When Emily Nadeau was offered a postdoctoral fellowship at Larner College of Medicine at the University of Vermont, it wasn’t a job she wanted to turn down, but she considered dropping out. offer.

Bloomberg’s Most Read

For six months, Nadeau and her husband canvassed Burlington and nearby towns for a pet-friendly apartment as part of their $2,200 monthly budget. But in September, a few weeks before his first day of work, Nadeau still could not find accommodation nearby.

“It was awful — I was constantly crying,” said Nadeau, who spent hours every day going through rental listings while writing her thesis from her home in Kentucky. “All of this made me feel like it was impossible. I legitimately believed I was going to be homeless.

Nadeau, like many other home hunters, has been forced to contend with rising housing prices and limited choices. The lack of affordable housing threatens the ability of school administrators to attract and hire employees. So now, the University of Vermont and a number of schools across the country are tackling the housing crisis head-on with a new strategy: building houses targeting faculty and staff.

“People come to Vermont and expect everything to be a lot cheaper, but we don’t have the economy of scale that cities have,” said Richard Cate, UVM vice president for finance and administration.

The University of Vermont plans to invest $22 million in a deal with a local developer to build 295 housing units, 100 of which would be ready for occupancy in the summer of 2024 and the remainder available in two additional phases with completion complete in the summer of 2026.

Chittenden County, where the school is located, has a population of approximately 169,000, up 3% since 2019. A wave of out-of-state buyers, often with larger budgets than locals, descended on Vermont during the pandemic in search of vacation homes. . Some have reclaimed homes that were previously rented out by landlords, depleting an already tight inventory. The apartment vacancy rate is 0.4%, the lowest in 20 years, according to the latest available data from real estate consultancy Allen, Brooks & Minor Inc. That’s well below the average rate of 1 .7% since 2000.

In such a small town, any influx can disrupt the market. “If we end up with 1,000 more people, it can completely disrupt housing availability,” Cate said.

While rent prices rose 2.7% between 2020 and 2021, a rise cushioned in part by government rent relief programs, prices are expected to jump over the next year, Brad Minor said. Director at Allen, Brooks & Minor. This presents a challenge as the University of Vermont tries to grow.

“During the pandemic, Vermont has become a pretty hot place to move. We’ve seen an increase in demand, and Vermont’s housing stock isn’t meeting that desire,” said David Provost, Middlebury College’s executive vice president of finance and administration. “From a staff attraction and retention perspective, we felt we needed to be more involved in the solution.”

Read more: Even cash-strapped schools can’t cope with teacher shortages

Middlebury College, a private liberal arts school located about 35 miles south of UVM, has purchased a 35-acre parcel of land for $1.5 million and plans to develop 100 affordable housing units and for the workforce, according to a press release. The school purchased the land with working capital and the developer, Summit Properties, will finance the estimated $40 million project, which will be built over the next six years.

The lowest salary range the school offers staff is $35,000 to $45,000, that salary would qualify for affordable housing in the new housing project, according to Provost.

The UVM and Middlebury plans mark a new strategy in higher education, where needs are growing but where housing for teachers is still scarce. Schools in major cities across the country are also taking steps to anticipate the problem.

In Washington DC, Howard University plans to construct a new mixed-use building adjacent to its campus. In partnership with developers, the school will construct a 10-story building with up to 500 residential units to serve students, faculty, staff and visitors, as part of the university’s plan to build 36,000 new homes by 2025.

Strong demand

Schools that offer faculty housing tend to have very few, said Jim Hundrieser, vice president of counseling services at the National Association of College and University Business Officers.

For example, New York University has owned and operated faculty housing since the 1960s. According to its website, it has a portfolio of 2,100 apartments in mid-rise and high-rise buildings in the Washington Square neighborhood of Manhattan. It has nothing to do with NYU’s 5,050 faculty members.

It is difficult for landlords, in general, to evolve housing while reducing costs. On top of that, it can be administratively difficult for schools to decide who can live where and for how long.

“I suspect interest is high, but I know the business model to maintain something quality, affordable and appealing to families is challenging,” Hundrieser said.

Some schools were unable to make the math pencil. The University of California, Los Angeles, which already offers 191 faculty housing, planned to increase its supply to as many as 100 units, with the building slated to open this year. But a school spokesperson said the project was on hold due to the financial impacts of the pandemic.

Legislation recently passed in California aims to ease some of the financial burden of building homes. The law establishes a revolving loan fund to provide interest-free loans for the construction of housing for faculty and students. It will allocate $900 million in fiscal year 2023-24 and another $900 million the following year.

Meanwhile, similar legislation in Hawaii that would have allowed the state to purchase land to build affordable housing prioritizing early-career teachers, failed to pass in the legislative session that ended in may.

The demand for more affordable housing is evident. The University of California, Los Angeles said it had a waiting list of more than 100 faculty for its housing when it proposed the expansion in 2019. Meanwhile, the annual US PhD scholarships States, many of whom are moving into teaching positions, jumped nearly 60%. since 2000, and are expected to continue growing over the next decade, according to the National Center for Education Statistics.

The median annual salary for post-secondary teachers is just under $80,000, according to the US Bureau of Labor Statistics. Beginning teachers often earn less. And while housing costs vary in each market, renters who spend more than 30% of their annual income on rent each month are considered “rent-burdened” by the U.S. Department of Housing and Urban Development. Asking rents in the United States were $2,084 in September, according to Zillow Group Inc.

Read more: Snowballing The rent crisis in the United States spares no city or income bracket

“No other choice” than to build

The pressure on housing also worries K-12 school districts, where teachers tend to earn even less. Troy Flint, spokesman for the California School Boards Association, said at least 50 districts across the state have expressed interest in building workforce housing. And in San Diego, voters in November will decide the fate of a $3.2 billion bond measure that would partially fund affordable housing for San Diego Unified School District employees.

“San Diego is one of the highest cost-of-living neighborhoods in the country,” said Richard Barrera, administrator of the district’s board of directors. “We have several teaching positions that are already hard to fill,” such as special education, math and science, he said.

In September, the median rent in San Diego rose 8.4% year-over-year after more than 15 months of double-digit growth, according to

Within two years, it may become clear that schools “had no choice” but to start building houses for their workforce, Hundrieser said.

As schools find the best way to meet their immediate needs to attract and retain quality talent, new recruits like Nadeau are forced to compromise. She temporarily left her husband and two dogs in Kentucky and moved into a studio about 25 minutes from UVM. The couple plan to start looking to buy a house near the school before the end of the year.

“I kept saying to my boss and my mentor, ‘I don’t understand, it’s Burlington. Why is it so crazy? Nadeau said. “Everyone was like ‘that’s how it is. “”

Bloomberg Businessweek’s Most Read

©2022 Bloomberg LP

About Gloria Turner

Check Also

AZ Big Media A record 29% of homes for sale are new construction

Twenty-nine percent of U.S. single-family homes for sale in the third quarter were new construction, …