Last week, both UBC and the University of Toronto announced major plans to increase student housing opportunities on their campuses. Two completely different approaches, both motivated by the same determination to “go even more global”, and by their respective government’s policies not to fund student housing projects. Compared to U of T’s plan and the way it was communicated, UBC’s comes out smelling of roses. Rightly so.
While UBC’s Board of Governors was announcing the establishment of the “Student Housing Financing Endowment” in a bid to dramatically increase its student housing capacity, U of T revealed its plans to lease a piece of “its land to a private developer who will build a towering private residence that will mainly house wealthy foreign students”.
The UBC Student Housing Financing Endowment will be supported by a portion of the proceeds of land development on campus. A first installment will finance the $136M Ponderosa complex with 1,100 student beds. U of T has elected to lease a piece of land it owns on College Street, just east of Spadina, to a private developer who purchased the adjacent lot and is proposing to build a luxurious $120M residence for more than 1,000 students.
UBC will be the sole owner/operator of its student housing projects. “U of T chose not to enter into partnership … but into a land/lease relationship.”
U of T will receive an annual fee of $350,000 for the project, escalating with the consumer price index over time. With no middleman, the UBC endowment will receive ALL the revenues from its housing projects.
U of T says, “Although the lease agreement stipulates the only thing that can be built on its land is a student hall, the residence will not be exclusively for U of T use and the rates per room will be set by the building owners.” UBC student housing will be ALL about UBC students.
According to Lucy Fromowitz (U of T Assistant VP- of Student Life), “The (U of T) housing will serve international students and, to a lesser extent, graduate and out-of-province students”. UBC student housing will be for ALL interested students.
“U of T will have no obligation to fill the residence and no ongoing financial liability”. UBC will have no problem filling its student residences and projects ongoing financial gain.
“U of T will not set rates, but the developer will have to ensure that the rates are competitive with those charged by both on-campus and off-campus residences”. He “is, however, committed to working with the University to ensure a quality experience for students”. UBC’s decision-making will be determined solely by its commitment to student life programs and services, and the sustainability of its endowment.
UBC’s student leadership is ecstatic about the new student housing endowment. Adam Awad, President of U of T’s student union says, “The other concern is that (the residence) is being run by a private corporation. So there is no jurisdiction over what happens.”
“In a resource-constrained environment,” Bilyk (York University’s Director of Media Relations) said, private development “may be the only viable solution going forward.” UBC has other viable solutions and is willing to act on them.
The developer says U of T “needs bigger, shinier buildings to compete internationally” with American and European universities, many of which have added first-class towers over the years. “The university really needs some new residences to show international students and domestic students the quality,” he added. But he also admits that student housing is an “emerging new asset class in development,” a profit-making venture that will net investors the same type of returns as an apartment building.
There won’t be any developer speaking on behalf of UBC.