Where student housing gets built, and why it’s harder than ever
Key Highlights
- Development costs have increased across construction, labor, financing, and insurance, making traditional models less viable without adjustments.
- Micro-location factors such as local rents, existing supply, and entitlement hurdles now play a critical role in project feasibility.
- Early-stage planning, including entitlements and zoning, is more important than ever to prevent delays and cost overruns.
- Secondary markets like Texas and Utah offer opportunities due to lower costs and more predictable approvals, but require clear data and strategic positioning.
- Successful projects are those where institutions, developers, and designers align early on market realities, assumptions, and risk factors.
For years, student housing development followed a relatively predictable logic: build near a major university, fill the units, repeat. That logic is breaking down. Projects that would have looked like strong opportunities five years ago are now struggling to move forward because the math no longer works the way it once did.
Costs have increased across the board. Construction, labor, financing, insurance, and municipal requirements have all become more expensive at the same time. Meanwhile, there is still a limit to what students and families can realistically afford to pay in rent. In some markets, rents are already pushing the upper edge of what feels achievable, and even then, many projects still do not pencil. Insurance has become one of the sharpest and least predictable pressures, especially because it can shift late and have a major impact on the pro forma.
In practice, this means projects are stalling, pausing, or being restructured much earlier than they used to be. Developers are revisiting unit mixes, pushing harder on density, testing more efficient structural grids, reducing parking where possible, consolidating amenity spaces, and phasing projects differently. Double-occupancy units, semi-private bathrooms, and smaller private units are also back in the conversation.
For designers, the building has to do more work. Every decision about efficiency, unit mix, structure, parking, amenity, operations, and long-term durability carries more weight. The projects moving forward are the ones where feasibility, design, operations, and resident experience are being solved together from the beginning. The projects that struggle are often those still relying on the assumptions from the last development cycle. For campus administrators, this shift carries real implications. Understanding what’s driving these changes and what questions to ask before committing to a project has never been more important.
Location Is Everything, But Not the Way It Used to Be
One of the clearest shifts in the market right now is how developers and institutions are thinking about location. University reputation is no longer sufficient on its own. What matters now is micro-location, which is the specific submarket dynamics around a given campus, and whether the local rental market can actually support the product being built.
Enrollment matters, but it doesn’t tell the whole story. We’ve seen schools with strong enrollment, strong reputations, and a genuine need for housing still struggle because local market conditions couldn’t support the project. In those cases, the issue isn’t the university. It’s the micro-location. Local rents, existing supply, entitlement hurdles, land cost, parking requirements, and the quality of nearby housing can each make or break a project.
That’s why it’s worth pushing institutions to look past the total student count. Where are students living now? What can they actually pay? What already exists nearby? Is there actual unmet demand for the proposed housing? A campus may have 30,000 students, but if the surrounding market already serves them, or if local rents can’t cover the cost of new construction, the project can still be hard to deliver. Enrollment growth should start the conversation, not end it. The real question is whether the market will support the right product at the right price.
Secondary Markets Are Getting a Closer Look
Texas, Florida, Arizona, Utah, and Pittsburgh are among the areas viewed as relatively active and promising. At the same time, markets like California and the Pacific Northwest are being approached more cautiously, in large part because of entitlements, regulatory hurdles, and the difficulty of making costs work.
For institutions in secondary markets, this shift represents an opportunity, and one worth understanding before a developer does. Development costs are often more manageable, approvals more predictable, and competition from other projects less intense. That makes a secondary market more attractive than many institutions realize, especially where enrollment is strong and there’s a clear gap in local housing supply. Being outside a major gateway market can be an advantage right now.
The institutions that tend to be best positioned are those that can clearly articulate their enrollment trends, their student demographics, and exactly where the local market falls short. That kind of clarity holds stronger ground with development partners and helps frame the opportunity with good data and a clear story. In many secondary markets, the opportunity is real—it just has to be approached that way.
The Front End of a Project Matters More Than Ever
Perhaps the most important shift for campus administrators to understand is how much the early stages of a project now determine whether it succeeds. Entitlements, zoning strategy, and site planning decisions made at the front end of a project have become significant competitive differentiators. Density limitations, ground-floor retail requirements, and legal hurdles are among the obstacles that have derailed or delayed projects that were otherwise viable. In student housing, the stakes are sharper than in most asset classes. Miss an August move-in, and you can lose a full year of revenue.
The institutions moving projects forward are the ones asking hard questions before anyone gets attached to a concept. Before a site plan, unit mix, or amenity package takes hold, campus administrators should ask what assumptions are driving the financial model and whether those assumptions have been tested against today’s market. They should also ask what could slow the project down or drive up its cost. Entitlements, zoning, density limits, parking, ground-floor retail requirements, and other regulatory issues can hit both schedule and budget hard. Those questions need to be asked early, not after design is underway.
The third question is flexibility. What happens if the market shifts? Can the unit mix adapt? Can the amenity program flex? Could the building serve more than one resident population if it had to? And the question we don’t hear often enough: "What could cause this project to fail?" It’s an uncomfortable conversation, but usually the most useful one. Name those risks early, and the team has a far better chance of solving them before they become real obstacles.
What This Means for Your Planning Decisions
The student housing market still offers real opportunity, but success depends on disciplined market analysis, realistic underwriting, and a willingness to ask harder questions earlier in the process. For campus administrators evaluating their housing pipeline, the takeaway is that the assumptions that made it viable in the past need to be revisited.
The most important shift is timing. Start the conversation earlier than you think you need to. Before getting deep into architecture, amenities, or project vision, spend the time to understand the fundamentals. What does the local market actually support? What are the development constraints? What are the institution’s long-term housing goals? What assumptions need to be tested before a direction is locked in? A well-framed conversation at the start saves months of redesign, unexpected cost, and missed opportunity later.
The best student housing projects we’re seeing right now are the ones where institutions, developers, designers, and operators align around market realities from the beginning. In today’s environment, the projects that succeed aren’t always the most ambitious. They’re the ones that were strategically aligned from day one.
About the Author
Cindy Schaumberg
With over 30 years of experience, Cindy Schaumberg brings a comprehensive understanding of both the technical and strategic aspects of interior architecture. Driven by a passion for meaningful design at every scale, Cindy—a principal and Higher Education Studio co-leader at Ankrom Moisan—expertly leads her team of designers in delivering projects across the country. Her experience with private developers has enabled her to spearhead off-campus student housing projects for many prestigious nationwide university systems. By anticipating demographic and lifestyle trends, she ensures that each design thoughtfully responds to how people engage with the built environment. This forward-thinking approach makes her student housing developments not only highly functional but also adaptable to the evolving needs of the communities they serve.
Jason Jones
Jason Jones brings more than 25 years of experience at the intersection of architecture, construction, and student housing development. As the Higher Education Studio Leader at Ankrom Moisan, he combines a developer’s grasp of feasibility, delivery, financing, and long-term asset performance with an architect’s focus on design quality, student experience, and campus impact. His background includes work as a development manager specializing in public-private partnerships and purpose-built student housing, which gives him a rare ability to bridge institutional priorities, market realities, and project execution. His projects span major campuses across the West Coast and Southeast, ranging from campus master planning and live/learn communities to residence halls, student apartments, and student success centers. Known for building integrated teams, he brings a strategic, collaborative approach to design, scheduling, budgeting, and quality, helping clients navigate complex projects with clarity and confidence. His work centers on student-focused environments that elevate how students live, learn, and connect, while delivering lasting value for institutions, developers, and the communities they serve.