The possibility of a new trend has surfaced in the housing market: the management of college dorms by private companies. Until recently, the job of on-campus housing maintenance fell directly on the university. This could all change.
According to the Wall Street Journal, The University of Kentucky has been discussing the possibility of turning over all on-campus management and maintenance responsibilities to realty group, EDR. Currently, the university wants to increase the size within the next ten years, and would turn all responsibility of this task to EDR. Their responsibilities would include replacing most of the 6,000 beds now a part of Kentucky’s housing program, as well as adding another 3,000 beds over the next ten years. This marks the first time a university would completely turn over housing management and expansion to the private sector.
In order to update the number of beds on campus, EDR would be required to construct new buildings. Normally this would involve erecting new buildings on campus, but EDR has different plans. They intend to tear down existing buildings and replace them with upgraded, larger dormitories. In doing so, the total number of beds on campus would actually increase each year.
This plays an important role in this new market. Losing beds poses a threat to universities as many schools struggle to house everyone already enrolled. Upgrades would be necessary, and there so would spending money. EDR has already stated that they may spend as much as $500 million on the total renovation project.
Managing all on-campus housing comes with its downsides as well. Universities are in session nine months out of the year. Having students living on campus poses issues to a company attempting to renovate a large number of buildings. This means that management companies would need to find a place to house students while they renovate certain dorms. Considering their plans to start construction on a 600-bed facility sometime in April of this year, EDR seems to have found a way around this dilemma, assuming they win Kentucky’s housing contract.