Student housing on the rise, companies supported by UA Res Life
With five new housing developments going up throughout Tucson that cater to college students, developers and Residence Life expect the rise in students to attract more business opportunities.
The District on Fifth is the first of six new private student-housing complexes being built this year. These properties, in the downtown area and near the Tucson Modern Streetcar route, are the key to revitalizing Tucson’s core and improving the economy, according to Pamela Sutherland, economic development director at Downtown Tucson Partnership.
“Bringing more people downtown, increasing the density downtown, getting a critical mass is really key,” Sutherland said. “It winds up boosting the economy big time.”
A little over 2,700 bedrooms will be added to the existing 13 private student housing apartments in Tucson. An estimated 1,200 of these beds are expected to be in the downtown area.
“We’re very likely going to see kind of a domino effect occur where, as students come in, more businesses will come in because there will be more business opportunities,” said Jim Van Arsdel, assistant vice president of UA Residence Life’s Student Affairs and University Housing.
Students who live downtown will likely spend money there, whether it’s going out to a coffee shop or enjoying the downtown nightlife, Sutherland said, adding that the benefit lies in the fact that a majority of Tucson’s revenue comes from sales tax.
“That (sales tax) doesn’t stay necessarily in the downtown, it just stays within the city,” Van Arsdel added. “So you know it helps everyone essentially.”
The UA does not intend to build additional residence halls in the “foreseeable future,” said Van Arsdel. Instead, the university is encouraging private investors to build their properties specifically for students and is allowing them to set up a contract as an affiliate of the university.
“It really is a very neat concept I think,” Van Arsdel said. “It (the UA) doesn’t have to pay for additional housing to be built, but that additional housing gets built.”
These contracts are a way for the university to create a relationship with private companies, which would help them market their product to students.
Jim Campbell, owner of local real estate development company Oasis Tucson Inc., is in the process of finalizing a contract to become an affiliate of the university. Oasis Tucson Inc. will soon begin building a six-story housing complex directly east of the Rialto Theatre downtown and an additional three levels to the Plaza Centro parking garage on Broadway Boulevard and Toole Avenue.
“This is a very exciting time to see the university and downtown beginning to integrate,” said Michael Keith, CEO of Downtown Tucson Partnership. “We’ve been looking for a major player like the U of A to get involved.”
The developers of The Junction, a 198-bed project on the corner of Ninth Street and Third Avenue, decided it was unnecessary to become university affiliates. Being near campus, Fourth Avenue and the streetcar will attract students to the property, said Roy Drachman, the real estate broker representing the developer of The Junction.
“Location is key to having a good occupancy rate,” Drachman said. “Being closer to campus will make it more attractive to a larger number of students I believe.”
Van Arsdel also said that the new developments will increase competition in the student housing market, which could lower prices and lead to more amenities offered to students.
“So if you know all these units get built … an increased supply could lead to lower prices,” said Drachman.
Studies at the UA have shown a “significant shortage” of beds for students, according to Drachman, who would have to seek alternative housing without nearby options.
“Will it help students? Absolutely,” Van Arsdel said. “Would there be people living out of their cars if it didn’t happen? No. It’s just that they would be living farther away from campus.”
Steffanie Kramer, leasing and marketing manager of NorthPointe Student Apartments agrees with Drachman that more student housing is necessary in Tucson. “Enrollment is up and the dorms are getting filled pretty quickly so there has to be other options available to students,” Kramer said, adding that housing projects could draw more people to Tucson.
“I think it’s going to open us up to a lot more possibility with getting new students on our property as well as the other properties also getting that,” she added. “I feel pretty confident that we’re going to be able to maintain our occupancy.”
Unlike Kramer, Ted Mehr, owner and manager of Sahara Apartments, said he is somewhat concerned about what’ll happen once these new student housing projects are open.
“I think they’re over-building but … there’s nothing I can do about it,” Mehr said. “We’ll just have to gauge the market. We don’t know exactly what’s going to happen.”
Mehr said he expects the newer properties to have higher prices, something that would help him maintain his student housing business, but he’s not exactly sure how it will all play out.
The District on Fifth, located at 550 N. Fifth Ave., will be open to students for the fall 2012 semester.
The other five private student housing complexes are currently either breaking ground or going through demolition with plans to break ground in the near future.