Developers brace for surge in housing

Two years ago, the demand for student housing in College Park seemed endless. Students were protesting on McKeldin Mall for more on-campus options, and off-campus high-rises such as University View and Parkside filled up four months before the start of fall semester.

Since then, the university has committed to building two apartment complexes and a new dorm, and six off-campus housing proposals remain in the pipeline. Of these nine buildings, six student-housing projects are expected to open by 2011.

Whether students’ unwavering demand for housing will persist after 2011 remains questionable. Some proposed student housing complexes have been put on hold as local stakeholders wait and see how the market changes; other developers are moving ahead with long-term housing plans despite an imminent surge in the area’s housing stock.

Between South Campus Commons Building 7 and Oakland Hall on the campus and the University Overlook, Mazza Grandmarc, the Varsity at College Park and StarView Plaza — all located north of the campus along Route 1 — the six projects opening over the next two years should provide the area with about 3,500 new beds.

Still, Ari Schnitzer, the university’s real estate coordinator, said it’s hard to say for sure whether these projects will completely meet students’ hunger for high-rise housing.

“There certainly should be a much smaller shortage, if any, but I couldn’t tell exactly what the demand will be,” Schnitzer said. “My very short answer is, I don’t know.”

Schnitzer said he was confident the complexes opening in 2011 would attract substantial attention but noted it’s impossible to pinpoint exactly how many students who commute, live in dorms or live in College Park’s neighborhoods are looking to move into high-rise developments.

“There are just too many factors to consider,” he said.

Despite the large volume of upcoming student housing projects, landlord Janet Firth, who owns several Knox Boxes, appears to be proceeding with plans to buy up the remaining Knox Boxes and redevelop them into high-rise housing — a sign she thinks students’ demand for nearby housing won’t subside anytime soon.

An apartment not exclusively for students is also moving ahead with plans to open at the corner of Mowatt Lane and Campus Drive, according to Schnitzer.

Meanwhile, District 2 City Councilman Bob Catlin pointed out that Otis Warren, the owner of the View and the neighboring University Overlook, is leasing office space in a building that he once discussed converting into a third apartment building.

“I guess they’re looking to see how University [Overlook] does,” Catlin said.

A major question Warren and other off-campus developers will face, Catlin said, is whether students will remain willing to pay $700 to $900 a month to live in high-rise apartments.
Catlin said the city’s high-rise developers are building on the assumption that students will continue to pay the steep rents. The developers’ costs are too high to charge any less, Catlin explained.

But if this year serves as an indication, students’ appetites for high rents may be souring. At this time last year, the View had almost 300 people on its waiting list; now, the View has one opening, Warren said.

Towers at University Town Center also has openings, as does Parkside.

Warren said that many students could not afford off-campus apartments this year because of the recession but predicted that would change in the future.

“Once the economy gets back to normal, demand will increase for off-campus housing,” he said.

But Assistant Director for Resident Life Scott Young pointed out that once Oakland Hall and Commons 7 open, off-campus apartments will have more on-campus housing to compete with.

“If they’re going to compete, they’re going to have to drop their rates,” he said. “I imagine they’ll probably face a profit question.”

Catlin noted new high rises will also have to contend with rental housing downtown, which offers better access to bars and restaurants often at lower rental rates.

On the on-campus development front, Assistant Vice President for Student Affairs Pat Mielke said plans for an eighth Commons building located where Lot U5 next to Van Munching Hall currently lies and renovations to Carroll, Caroline and Worcester halls have been put on hold.

Mielke said the university is waiting to see what student demand looks like after Commons 7 and Oakland Hall open. But even if demand remains, Mielke said the university will not be able to pitch new housing projects for a few years.

The university needs to wait until the state clears it to take on additional debt, Mielke said.

slivnick at umdbk dot com