Canadian universities are rushing to address critical shortage of student housing

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A hot rental market across Canada is squeezing postsecondary students, with universities and private companies trying to meet growing demand with a mini-boom in residence building.

Universities have been adding new residence spaces, with several new buildings either ready to open or under construction at Canadian campuses.

It’s one of the few levers that schools have to address the broader issue of rising rents and falling vacancy rates that are contributing to increasing costs for students. But residences take years to build and with most beds aimed at those in first year, much of the housing available to students off campus is dependent on dynamics in the private rental market.

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More than 21,000 new residence spaces will be added to Canada’s 24 largest student markets by 2025, according to a report from real estate consultants Cushman & Wakefield. That would mean a 15-per-cent boost to the 145,000 residence beds available in those markets, the report said.

But the report suggests that the need for new units could still outstrip supply, particularly if international enrolments continue to grow.

It’s not just big cities where the issue is pressing.

The University of Prince Edward Island last week suggested that students who haven’t yet secured accommodation should not travel to the province and may want to consider deferring enrolment for a term. UPEI said its residence wait list was more than 400 people, with a new building not expected to be ready until 2023. The university said the wait list was longer than usual partly because more upper year students have opted to stay in residence, a knock-on effect of a tight rental market. The university appealed to the community to make rooms available for students, but it may not be enough.

Average rent for a 1-bedroom apartment in Canada has soared 13.7 per cent from the start of the year

Students are struggling to secure housing in Canada’s overheated rental market

Administrators made the same pitch to local residents in Kelowna, where the University of British Columbia Okanagan campus is located. The university said it was turning to its neighbours and asking for help, as it urged people to rent out their vacant rooms, and a similar appeal went out from the University of Calgary students’ union.

McMaster University in Hamilton has had residence wait-lists in the range of 100 to 600 students in recent years, according to associate vice-president and dean of students Sean Van Koughnett. It is one of the few universities of its size that doesn’t offer a guaranteed residence place to first-year students.

The university is in the process of building two new residences in conjunction with a private company, Knightstone Capital, one with more than 600 beds aimed at graduate students and located a few kilometres from campus, and a second with more than 1,300 beds adjacent to campus. The new buildings will bring the university’s residence offerings to about 6,000, on a campus with more than 36,000 full-time students.

The attraction for private companies to build residences is that, as Cushman & Wakefield put it, student housing offers superior returns compared with other asset classes. Students are open to renting smaller spaces, they tend to be less risky as tenants because their parents often act as guarantors and predictable turnover is baked into the academic calendar, allowing more opportunities to raise rents, according to the consultants.

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Mr. Van Koughnett said expanding residences is one way universities can respond to the tightening housing situation.

“I think universities have an even greater role to play in providing housing for students than before,” he said.

He said that in Hamilton he has heard that students who would normally leave the off-campus student housing market upon graduation are staying put, because housing is scarce and prices have risen beyond what they can afford. The result is even more pressure on limited student housing, he said.

The university also sees other advantages to having students in residence. McMaster’s statistics show that students who lived in residence in first year have a higher retention rate, a graduation rate about 10-per-cent higher and a grade-point average of 0.3 to 0.5 points higher than those who lived off campus in their first year.

The Canadian Federation of Students says students are facing a national housing crisis.

One of the issues in the student rental market has been the rapid expansion of international student enrolment, with nearly 450,000 study permits issued in 2021.

Jessica Look, president of the Ontario Undergraduate Student Alliance, said the expansion of international student places has not come with a proportional investment in housing. And with more students wanting to live near campus this year as pandemic restrictions are lifted, students are struggling to find something affordable at a reasonable distance, she said.

In big cities such as Toronto and Vancouver, average rent for a one-bedroom apartment was up nearly 20 per cent in July from the year before, according to rentals.ca, and up more than 25 per cent in Calgary. It was 10-per-cent higher than a year ago in Hamilton and in Victoria and more than 5-per-cent higher in Ottawa.

Several universities are either opening new residences or trumpeting their construction. At Queen’s, a new university residence will open this year with more than 330 additional beds. At the University of Victoria, a new residence will add nearly 400 beds this fall with another new building adding 385 beds in 2023 – a 25-per-cent increase in its residence capacity in the space of a year. The University of Toronto, University of Windsor and Carleton University are among the schools that have new residences under construction.

Paul Davidson, president of Universities Canada, an umbrella group representing nearly 100 postsecondary institutions, said universities could be an ally to governments on the housing issue, as they typically own land that can be developed and can get projects moving quickly. But these are multimillion dollar projects and universities will need additional funding from provincial and federal governments, he said.

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