College Town Economics

university impact

university investment economicUniversities Are Essential to Recovery
A TownGown World Article
by C. D. Mote, Jr.- President, University of Maryland
June, 2009 USA

In the midst of major recession, the vital impact of research universities on state and regional economies gains added importance.  Universities accomplish three tasks essential to recovery: Prepare students to compete for quality jobs; deliver economic development far beyond campus; position states to compete for the jobs, businesses, and partnerships recovery will bring. Higher education delivers critical knowledge and skills needed to secure the best jobs. It prepares people for jobs that don’t yet exist, in industries that have yet to be founded.

Universities have long produced impressive direct economic development  for their states, helping small businesses get off the ground, moving discoveries to market, serving as powerful magnets for public and private  investments and creating research-related jobs. For example, in the case of the University of Maryland:  The Sage Policy Group concludes that each dollar in state funding to the University ($420 million) generates eight-dollars in economic impact ($3.4 billion).  Over the past decade, the University assisted 110,000 start-ups secure low-cost loans – more than $300 million-worth at a cost of $9 million – a thirty-five fold gain.

Over the past 25 years, the University has helped bring to market nearly $20 million-worth of products and services and created 8,500 jobs at a cost of $89 million in State support – an impact ratio greater than 200-to-1. Each dollar in faculty salaries, translates into $3 in  research grants, supporting more than 14,000 jobs, in areas like  alternative energy, climate change and food safety – national  challenges longing for solutions.
Few institutions educate to such high standards, drive the economy by creating jobs and enterprises and prepare society to tackle its future. At this time of economic upheaval, universities are essential to recovery.

C.D. Mote, Jr. is president of the University of Maryland, the state’s  flagship institution, and a national authority on U.S. competitiveness. For more information, you can contact : Millree Williams  Executive Director, Public Affairs Strategy Office of University Communications  2101 Turner Building  University of Maryland College Park, MD 20742 301.405.4621

UB contributes $438 million a year to state, economic study finds
University of Bridgeport
June 2009
University of Bridgeport’s financial contribution to Connecticut, Bridgeport, and surrounding Fairfield County is worth $438 million a year, according to an economic impact study released Friday by the University.The 24-page report, “UB: An Economic Impact Study,” measures the importance of University of Bridgeport to the state economy by tracing dollars spent, both directly and indirectly; jobs created; and services provided.(Go to article)

Agency: Point Park ‘village’ to aid local economy
Pittsburgh Post-Gazette. USA
Aprl, 2009

Point Park University’s $244 million academic village project has the potential to do far more than just beautify Downtown. It could add hundreds of millions of dollars to the local economy as well.

At least that’s the conclusion of the Pennsylvania Economy League of Southwestern Pennsylvania, which estimated the series of initiatives — including the move of the Pittsburgh Playhouse from Oakland to Downtown — could result in $281 million in direct economic impact and create 3,724 jobs.(Go to Article)

Houses in multiple occupation
and possible planning responses
Consultation
May 2009, England

Department for Communities and Local Government: London

Problems caused by high concentrations of houses in multiple
occupation (HMOs) have been highlighted as an issue in a number of
towns and cities across the country. This consultation document aims
to test the validity of such concerns and explore what, if anything,
might be proposed as a solution

http://www.communities.gov.uk/documents/planningandbuilding/pdf/housesmultipleconsultation.pdf

Slump Revives Town-Gown Divide Across U.S.
New York Times
May 2009

Harvard had big plans to expand its campus into Allston with a science complex. But last winter, the university announced that the recession would force it to slow — perhaps even halt — the $1 billion project. Now Allston residents are living with a gaping hole and a bunch of vacant buildings instead of the prospect of a revitalized neighborhood.(GO TO ARTICLE)

 

Taxing college students: Providence mayor wants to levy $150-a-semester assessment
Chicago Tribune
May 2009

PROVIDENCE, R.I. — The mayor of Providence wants to slap a $150-per-semester tax on the 25,000 full-time students at Brown University and three other private colleges in the city, saying they use resources and should help ease the burden on struggling taxpayers.(Go TO ARTICLE)

 

 

HMO LOBBYStudentification and the Credit Crunch
A TownGown World Article
by Dr Richard Tyler, National HMO Lobby
June, 2009 UK

 

Studentification arose in the UK through a combination of factors – a huge expansion of higher education, a failure of institutional accommodation provision, the attraction of student houses as an investment in the private rented sector, the lack of planning constraints. The ‘credit crunch’ affects many of these.

One consequence of the crunch might well be an exacerbation of studentification. On the one hand, in an uncertain economic climate, many school-leavers may prefer to stay in education, rather than brave a contracting employment market, thus boosting student numbers. Meanwhile, the same uncertainly makes investment in the stable (even expanding?) student housing market a very attractive proposition, thus fuelling the supply of student shared houses.

Alternatively, the credit crunch might have the effect of reducing studentification. For instance, large developers have now entered the student housing market, and may offer a better opportunity to investors: the growth of purpose-built developments will provide stiff competition for traditional student landlords. This competition will take place within a stabilised demand context, as the recession hits government funding of higher education – the era of expansion will end. For the same reasons, financial support for students will decline, and pressure to raise tuition fees will increase. Students will have no alternative but to look hard at the costs and benefits of higher education (as their families also experience the effects of the credit crunch). A major cost of course is accommodation, so an obvious economy is to study from home.

Overall, therefore, the consequences of the credit crunch for studentification are very ambiguous.

 

student housingDr. Darren Smith

Student housing and the impacts of the economic recession in the UK?

Darren P. Smith
University of Brighton
June 2009 UK

Working Paper: Abstract. This paper considers some of the possible effects of the economic recession on the student housing market in the UK.  It is contended that there will be major changes to the supply of student accommodation.  First, it is suggested that there will be a more focused concentration of Purpose-Built Student Accommodation in London and university towns and cities with prestigious universities, to cater for the growing international and home-based student market.  Second, it is postulated that commercial development activity will continue to be buoyant in the student housing market, as more partnerships are formed with universities to provide higher levels of university accommodation for first year and returning students.  Third, it is argued that student accommodation in the private rented sector will continue to be a major form of student housing.  A key shift in this sector will be the increasing domination of large-scale, professional organisations; as small scale, buy-to-let landlords withdraw from the market and buy-to-let mortgage products and finance declines.  As more existing Housing in Multiple Occupation is offered on to the market for sale, this may provide broader opportunities for increasing the supply of single family housing, particularly important given the low number of new house building completions.  New strategies and grants would need to be launched to enable the (re)conversion of HMO to single family housing.  Positively, it noted that the changing dynamics of the student housing market may enable universities and other stakeholders to forge more positive town / gown relations.

 

mchattie hamiltonCommunity Impacts of Purpose Built Housing
A TownGown World Article
By Brian McHattie- Ward 1 Councillor
City of Hamilton, Ontario
June 2009, CAN

In many near-campus neighbourhoods, rapid expansion of undergraduate student enrollment has led to the conversion of traditional family homes to student homes, often owned by absentee landlords, leading to destablised neighbourhoods (characterized by  poorly  maintained properties and noisy late night parties). As houses are converted to student use, families move out, leading to some neighbourhoods in the area around McMaster University in Hamilton, Canada attaining levels of over 50% student housing. In my experience as a City Councillor, permanent homeowners, students, the University alike profess an interest in encouraging more balanced neighbourhoods – how to achieve this is a challenge!

An emerging trend that may affect the balance issue is the creation of purpose-built student housing, with the hope that students will move out of houses in the neighbourhoods, thereby freeing up homes for families to “reclaim” the neighbourhoods. In Hamilton, private developers are moving this agenda ahead with the first nine storey student residence (housing 450 students) built in 2007, with three more hi-rise buildings proposed (550, 290 and 450+ students each) to be built by 2011. Several smaller developments (ie., 20, 50 students) are currently in construction.

As the City Councillor for this campus town neighbourhood, I consider these developments as generally positive, however several are clustered near one neighbourhood with a high percentage of student housing. What effect will the adjacent purpose-built student housing have on the already saturated neighbourhood? Will student houses be abandoned as students move to purpose-built residences; if so, will house prices drop (from artificially high values driven by speculators over the past decade) making it more attractive for families to move back in and will they need government incentives (ie., interest-free loans) to assist in de-converting student houses?
The topic of purpose-built student housing and its impact presents a rich area for future research. In addition to the questions raised above, issues may include: what happens to these buildings should enrollments decline (ie., how adaptable are they for family use); should universities play a stronger role (ie., instituting off campus code of conducts).

 

Recession Impacts Host Communities
TownGown World Article
By:Harry Mattison
June 2009, USA

For the past several years, Harvard University has had bold plans to remake the Allston neighborhood of Boston as part of the largest expansion in its history. Today, that plan is nowhere to be found. The plan, which included museums, research, retail, athletic facilities, and more, was to invigorate both the Allston and Harvard communities. Thousands of jobs would be created and Harvard’s investment would be the catalyst for an urban renaissance with new housing, transportation options, and parklands.

Everything seemed within reach as Harvard’s endowment swelled with billions of new dollars each year. Allston residents voiced few concerns as Harvard spent hundreds of millions of dollars to purchase hundreds of acres. Even as Harvard left storefronts vacant and went to court to break its lease with a major retail tenant, residents remained optimistic about the future that Harvard promised.

But now, with Harvard in the midst of budget cuts both big and small, Harvard’s Allston dreams will not be realized anytime soon. Construction of Harvard’s billion-dollar Science Complex – announced with great fanfare a couple years ago – may stop in a few months with the building far from complete. The working-class residents of Allston, living alongside idle Harvard properties, are wonder what will – or won’t – happen next.

The most significant development still on the horizon is the redevelopment of the Holton Street Corridor, 30 acres owned almost entirely by Harvard. Harvard has a deal with the Charlesview Apartments, 213 units for low-income residents, to move them from their current location near the Harvard Science Complex to the Holton Street Corridor. If done according to the modern standards of mixed-income housing development, hundreds of median-income and market rate units would be integrated into the project. But for this to happen, Harvard will have to allow development on much more than the six acres that it has currently allocated for this project.

Converting this underutilized area into housing, retail, and parks won’t bring the Ivy League cachet of a Harvard campus, but it would bring much-needed life to an area that hasn’t seen much activity since Harvard came to town .
Editor’s note : Harry Mattison is a long time resident homeowner living in the Allston neighborhood of Boston, Massachusetts, USA. Harry serves as a member of the Harvard Universities Institutional Master Plan Community Task Force for Allston. He created and maintains the harvardinallston.net website as well as the Allston Brighton Community Blog which extensively covers among other topics the expansion plans of Harvard and Boston College. Harry also moderates AllstonBrighton2006, an email discussion group created to help support communication, information sharing, and community organizing in Allston.