Card, mobile credential, payment and security
Financial flexibility and improved student experience drives public-private partnerships
The shift towards private campus housing is nothing new. Corporate dorm management started as early as the 1990s, as campuses in Nebraska and Oakland used private leases to subsidize their scholarships. But it was American Campus Communities who ushered in a new age of student housing privatization. In 2005, after landing partnerships with the University of California System, Texas A&M, and Arizona State University, they launched the American Campus Equity program, an ownership model for on-campus student housing.
The draw of P3s lies in their ability to combine public interest with private efficiency.
Since then, public-private partnerships – or P3s – have grown, allowing universities to focus on education while offloading residential management to private companies.
The draw of P3s lies in their ability to combine public interest with private efficiency.
Whitney Kidd, founder of IRIS Technologies and Senior Vice President of Innovation & Technology at Preiss, attributes the trend to a mixture of cost, expertise, and operational burden. Preiss currently manages more than 40,000 beds across the country.
“Residential management can be a tedious process, and universities want to bring a professional partner in to take that lift off of them,” says Kidd. “Our scale at Preiss allows us a lot of things – pricing efficiencies, broader experience, and broader teams to manage properties.”
Recently she has noticed a shift as universities look for additional help with leasing and residential management in additional to the typical facilities management.
Scott Residential Management Vice President Darrin Dukart has watched the shift toward privatization over the last 30 years, correlating it with higher enrollments and rising infrastructure costs.
“Student housing has become a much bigger task today than it was 30 or 40 years ago,” he says. “Colleges have aging dorms that require a lot of maintenance, and when we take this off their plate…they can focus more on education.”
Aging infrastructure can pose complications that universities would rather hand off to a private developer, especially when looking to build in digital access systems.
Data from the National Center for Education Statistics indicates that enrollment is projected to grow through the end of the decade. Numbers are expected to increase eight percent by 2030, recovering most of the pre-2020 declines. With many residence halls built in the 1960s and 1970s, there is a widening gap between updates, student expectations, and increased capacity.
Aging infrastructure can pose complications that universities would rather hand off to a private developer. This includes challenges that arise building digital access, physical security, and credentialing systems.
Kidd and Preiss work with Allegion to handle retrofits to many of these systems.
“The biggest cost come when buildings don’t have preexisting wiring,” says Kidd. “But Allegion has a product we use on both our off- and on-campus housing that is battery powered so there are options even when capital allocation is strained.”
Value engineering has become a large part of the discussion when universities come up against budget constraints with outdated infrastructure, especially when campuses have hundreds or even thousands of access points.
The P3 model involves long-term contracts and transparent communication, hallmarked by a great amount of trust between the university and its private partner. Scott Residential Management has a small portfolio but have worked directly with the University of Nebraska at Omaha for over 18 years.
“It’s constant communication about what their needs and wants are and how we can deliver,” he explains.
Information sharing will always be a part of P3s, especially when discussing digital access, but there’s not always a need to tie into university systems directly. “Universities were actually leapfrogging us in regard to access in off-campus housing,” says Kidd, whose venture The Collective at Norman serves the University of Oklahoma.
Universities who already have mobile wallet access enabled may benefit from an easier transition without a large capital investment.
Their off-campus housing uses components of the university's existing mobile wallet access solution to create a seamless experience without accessing the university’s ID system itself. Universities who already have mobile wallet access may benefit from an easier transition without a large capital investment.
On-campus housing requires more access into the university system, but it varies depending on the needs of the campus and the setup of the housing. In a P3 environment or a master lease, private partners will need some information from campus partners.
“We don’t tie into their system necessarily,” says Scott Residential Management’s Dukart. “We run the same software, we make sure it works with the university’s ID system, and we use the same credential.”
Maintenance and work orders for on-campus properties are typically handled by the private partner, while billing might be passed off to the university officials.
Purpose-built student accommodation with luxury features and extra services now account for one-third of college housing nationwide. There are no signs of slowing.
One example where information sharing becomes critical is with revocation for on-campus housing. Information about students no longer enrolled would be shared and synced with private partners instantly. With off-campus housing, however, student leases aren’t connected to the university and may not be affected.
Both Kidd and Dukart agree there isn’t likely to be a slowdown of P3 partnerships anytime soon. The need for universities to further defray costs and look to private partners for their expertise in property management will continue.
The University of Kansas Board of Regents has announced plans for a new $75 million residence hall, Auburn University plans to invest $100 million in new residence halls, and the University of Illinois at Urbana-Champaign is overseeing an estimated $180 million development within its Ikenberry Commons. But those are small compared to University of Arizona’s planned $250 million project to improve and replace outdated residential facilities. All are slated to begin within the next two years.
Housing projects on campus are increasingly more expensive, complicated, bureaucratic, and steeped in technology. Purpose-built student accommodation with luxury features and extra services now account for one-third of college housing nationwide. There are no signs of slowing. As the scale and scope of campus housing increases, it makes sense that many universities are bringing in the professionals.
