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At Middlebury College in Vermont, about 20% of faculty and staff commute from New York State. David Provost, Executive Vice President for Finance and Administration, noted that housing prices on the Vermont side of Lake Champlain are too high for many, affecting the college's ability to attract and retain talent.

To address this, Middlebury College is partnering with developers to build affordable workforce housing and market-rate housing on land within walking distance of downtown and campus. Although apartments are not restricted to college employees, Provost said the college may still benefit.

"As the largest local employer, by the law of probability, we will end up with most of the housing because we have a large number of employees," Provost said. "We can't wait; these homes will sell out quickly."

Middlebury College is just one of many colleges and universities across the country exploring ways to increase affordable housing. As both the U.S. housing and rental markets boom, the cost of living in college towns is rising, affecting students, faculty, and staff alike.

Provost believes that Vermont's lack of housing affordability stems partly from supply issues. The region has a large number of second homes and was one of the destinations people fled to from dense cities early in the pandemic.

"The overall supply problem Vermont faced before the pandemic has been amplified, but unless the state adds tens of thousands of housing units, the problem won't go away," he said.

The project will provide about 100 housing units, including income-restricted housing subsidized by the state and market-rate housing. To this end, Middlebury College hasspent $1.5 millionto purchase 35 acres of land.

"We can't wait."

—David Provost, Executive Vice President for Finance and Administration at Middlebury College

Provost said the land had been on the market for years, and the college used its institutional leverage to facilitate the deal. Middlebury College is only a temporary owner, selling the land to a developer, who will sell to homebuyers after completion.

Beyond helping the college solve its staffing issues, the project will also demonstrate the college's commitment to serving the region.

"The community relies on the college for economic vitality, which goes beyond high-paying jobs and good benefits," Provost said. "The college takes this responsibility and role seriously."

While Middlebury College is involved in development projects, it is also rethinking its role in the existing housing stock. Currently, the college owns more than 70 single-family and multi-family homes in the area, acquired through various means, including donations. Faculty and staff can live in them, but maintaining these homes is not the college's core business, and Provost believes others might do it better.

"The board is shifting toward 'we don't have to own everything; let's focus on educating 18-to-24-year-olds,'" Provost said.

Anchor institutions need affordable housing

Multiple pressures are prompting colleges and universities—often called anchor institutions—to examine local housing markets. This development goes beyond traditional residential colleges providing housing for students and is also prompting some commuter colleges to think about housing in unprecedented ways.

Jim Hundrieser, Vice President for Consulting and Business Development at the National Association of College and University Business Officers, expects more colleges to venture into affordable housing.

"When I talk with campus leaders, they do talk more about how the 'Great Resignation' or similar phenomena have led to staffing shortages," he said. "Schools in expensive urban areas really struggle to find good talent, and even if they do, there are affordability issues."

Hundrieser said that in rural areas that may attract wealthy retirees and newcomers, increasing housing stock is also important. For commuter campuses, building affordable housing can be one way to attract more students.

"Providing these affordable options is definitely one way to expand enrollment, whether for traditional-age or non-traditional students," he said. "Providing housing for students, especially for those schools looking to enhance the campus experience, will be a way to achieve that goal."

Implementation will vary by institution based on resources, location, and other factors. Hundrieser said most schools will likely seek some form of cooperative agreement, with many following public-private partnership (P3) principles.

Hundrieser believes that opening housing to everyone, not just faculty and staff, might be a good idea. As enrollment fluctuates, opening to the public can easily fill vacancies. Students, faculty, or staff could also be given priority to choose before the public.

The colleges considering affordable housing and their reasons are diverse.

Knoxville College in Tennessee, a historically Black college, lost national accreditation in 1997, state accreditation in 2015, and closed its campus in 2017. Currently, the college enrolls dozens of online students and is working to reestablish itself under new leadership. Part of the plan includes converting some of its properties into affordable housing for low-income families, with the hope that some residents will earn associate degrees or certificates.

Housing development takes time

As the housing market continues to squeeze residents of college towns, college leaders may continue to seek creative solutions that balance campus needs with financial capacity.

"This is a growth trend we hope to see," Hundrieser said.

In California, the housing shortage is particularly severe and long-standing. Long Beach City College in Los Angeles County (about 24,000 students) knows this well. Housing affordability has been a barrier to student success. A recent survey found that at least 70 students were sleeping in their cars. The college runs a program allowing these students to park in safe areas and has been exploring building and purchasing its own affordable housing.

But being interested in building housing doesn't mean every institution immediately has financial feasibility.

Last year, Democratic Governor Gavin Newsom signed a bill creating the Higher Education Student Housing Grant Program. The program provides grants for planning and building affordable student housing for the California Community Colleges, California State University, and University of California systems. The bill requires about $2 billion in funding over three years.

"When we talk about supporting students who are housing insecure or even homeless, we have to think comprehensively."

—Mike Muñoz, President of Long Beach City College

Long Beach City College applied for $75 million to $90 million in grants to build dense student housing, but its construction grant application was denied. Of the $6 million planning grant it applied for, it only received $120,000.

"We are using this year to refine our affordable housing feasibility study and begin some preliminary work to be more competitive in the next round of construction grant applications," said President Mike Muñoz. "Unit construction costs are one of the main drivers."

Muñoz said the college ultimately hopes to develop about 400-500 beds to serve as many students as possible with available funds. The college is also working with local organizations to provide transitional housing and support for some students, but these partnerships currently serve fewer than 100 students.

Since state grants are limited to student housing, faculty and staff cannot live in the final development, Muñoz said. The college is also in talks with Marymount California University (announced it will close this summer) to lease 10 units for students with dependents.

"When we talk about supporting students who are housing insecure or even homeless, we have to think comprehensively," Muñoz said.

"Our key ability to provide students with a high-quality education lies in recruiting and retaining the faculty and staff needed to operate the campus."

—Traci Ferdolage, Senior Associate Vice President for Facilities Development and Operations at San José State University

San José State University (in the California State University system), located in the San Francisco Bay Area, is moving forward with demolishing the nearby state-owned Alfred E. Alquist State Office Building to build housing for faculty, staff, and some graduate students.

"We recognize that the key to providing students with a high-quality education lies in recruiting and retaining the faculty and staff needed to operate the campus," said Traci Ferdolage, Senior Associate Vice President for Facilities Development and Operations.

System salaries are set through collective bargaining agreements and apply to all campuses, meaning it's difficult to raise pay in expensive areas like San José. Ferdolage said the region lacks moderate-income housing. While low-income housing has been built, university employees do not qualify.

Discussions began in 2020, and in 2021 Newsom signed a law allowing the state to sell the Alquist building to the university.

Ferdolage said the original plan was abandoned due to financial infeasibility. The university is now working to develop a competitive proposal to attract developers, hoping to obtain system board approval by January 2023.