It is a common understanding currently in Canada that within the large housing crisis lies a student housing crisis. The affordability and availability challenges that were once concentrated in Toronto and Vancouver now hit most college towns in the country. Increasingly, institutions are finding that the lack of student housing, and affordable options in particular are hurting their ability to increase enrolment and attract international students.
Within this context, there remains a large population that is underserved by traditional student housing approaches. On the one hand, some colleges and universities don’t have the capacity to deliver new build student accommodation, or at least not at the scale at which stand the needs. On the other hand, the traditional alternative to institutional-led housing, the public-private partnership, is not always profitable in markets where students have low income. In fact, we would argue that even in markets where there remains considerable demand for market-rent PBSH, there is also a significant, distinct demand for affordable options for the 75% of students that have an annual income of less than 25000$.
This low-income segment has proven difficult to target for postsecondary institutions (PSIs) and for for-profit PBSH developers. Thankfully, a lesser known, third model exists that can bridge this gap: non-profit student housing.
Non-profits, like UTILE which I co-founded, are independent businesses that can enter in partnerships with PSIs and developers. They are self-funded and must re-invest any profit in their mission – for example, by building more affordable student housing. Critically, they will work to maximize their affordability, with at the same time any debt they take being off the books of PSIs partners.
This model is very established in Europe, with large-scale PBSH non-profits housing tens of thousands of students each in Switzerland, Germany, Sweden, and more. It is gaining tractionin Québec, where UTILE has built or is building almost 800 beds, and has projects to deliver thousands more.
If you want to diversify your student housing delivery and financing options, and leverage collaboration with PSIs and developers all while achieving affordability, you should consider the non-profit option. If you do, reach out to us, and we will be happy to transfer our expertise!
Laurent Levesque is Directeur général et cofondateur at UTILE, a Montreal-based developer, who delivered remarks at SHURE-VANCOUVER on April 20, 2023.