Many of the areas that have seen tremendous real estate investment and development over the last 10 years have been in proximity to one of several of Philadelphia’s excellent colleges. North Philadelphia has seen a transformation due to the growth of Temple University, whereas West Philadelphia has seen major growth due to the continued expansion of Drexel and Penn.
Outside the city in places like Delaware County, the expansion of capital projects at places like Villanova continue to transform neighborhoods. While not limited to these two examples, colleges and universities have been the drivers of much real estate investment.
A recent article from BisNow highlights the issues colleges and universities are now having due to the lack of affordable student housing. College Students, Lack Of Affordable Housing Is A Big Issue National Student Housing.
Student housing development is unique. There are not as many national and local government tax-credit programs to offset the cost of the projects and they face many of the same challenges as multifamily developers, Frisco, Texas-based Texla Housing Partners CEO Roger Phillips said.
The price of ground-up development and value-add renovation of an existing property is at an all-time high, Phillips said. “Developers want to build more affordable housing for students but there just aren’t enough affordable housing programs,” Phillips said.
Even if you do find moderately priced land, it is usually several miles away from campus and colleges don’t like that. Students want to be close to campus. Demand has shifted to be closer. “Also student housing-oriented lenders want developers to be within certain distances from campus or the project won’t get funded.”
While building affordable multi-family housing as an investment is definitely not for everyone, keeping an eye on where investments are happening, is a great strategy for someone looking to invest in small multi-family or single-family student housing.