Student housing moves skyward
Walk down King Street as it stretches across Waterloo. From Uptown to past the universities, the horizon is dotted with apartment buildings, cranes and sites for future projects.
“From a developers point of view, five years ago there were a few people who were putting up new builds,” said Benajmin Bach, a real estate agent at Cushman & Wakefield.
For the last few years he has blogged about the changing Waterloo real estate scene at benjaminbach.com.
“In the last few years — probably going back to 2009 — a lot more groups have been involved [in putting up new builds],” he added.
The phrase “changing landscape” isn’t just a metaphor for the changing real estate scene in Waterloo. The landscape is literally changing. The town is getting taller and small landlords are beginning to feel the push. In digging down into real estate, The Cord found that the forces at play are hungry for the growing class of renters that don’t seem to stop coming — students — and lacking the only thing they need to accommodate them: land.
In the 2011 update to the Student Accommodation Study (the City’s look into where students are living), the City of Waterloo estimated that student numbers would rise by 1,000 every year. This didn’t account for graduate students (Wilfrid Laurier University’s Campus Master Plan predicts 4,000 more graduate students on campus by 2017). It also doesn’t mean 1,000 is a certainty.
In 2010, the University of Waterloo, WLU and the City of Waterloo predicted that 34,830 new students would arrive in town. In actual fact, 38,985, did and of those students, 33,960 needed a place to sleep at night.
Jim Butler, vice president: finance and administration at WLU, estimates this year that the school was about 800 to 900 beds short for its first-year class.
“We’re renting from the private sector,” he said, noting it was the only place where they could find the accommodation. It’s one of the factors that led to the school’s purchase of $59-million worth of real estate around the WLU campus – 10 properties on Ezra Avenue, one on Bricker Avenue and one on Hickory Street – last March.
But the long-term goal is to turn the newly acquired properties into university-zoned residences.
“We’re losing money on [renting from the private sector],” added Butler.
Mike Milovick is another experienced Waterloo-based real estate agent. Over his 11-year career, he’s watched the market change dramatically.
“All of a suddden we saw a big uptick in rent,” said Milovick. “Usually it was around $400 but it jumped about $65 to $75.”
That’s not the only change.
Housing starts (the number of homes on which construction has started) fell in September all across Canada. Milovick thinks that in a few years there will be zero in Waterloo.
“Waterloo is out of employment and residential lands in the next three years,” he said.
Smaller landlords now claim they are the ones feeling the brunt of this fight for land. Much of this anger has been directed at the rental housing licensing bylaw, which came into effect this spring.
“The city has made it so costly and onerous to be licensed, you have people willing to do it but now avoid doing so,” said Adam Hoffman, the owner of Hoffaco Property Management. Hoffman manages 83 properties, some of which fall under the new bylaw.
“The impact on my portfolio has been an increased cost burden for the rental housing provider,” he added.
He estimates that the rent increases on some of his properties is a difference of as little as $35 a month or as much as $200 a month, depending on how many upgrades had to be made to the property.
To Hoffman, it’s clear who gets the advantage under the bylaw; the developers who are building high rises, which fall outside the grasp of the municipal legislation.
“The smaller service provider is at a disadvantage by having to provide additional fees the larger competitor doesn’t have to,” he said. “It’s like the City of Waterloo decided to pass legislation that benefits Starbucks at the expense of local coffeeshops.”
Jeff Henry, city councillor for Ward 6 — which is home to the vast majority of Waterloo’s student population — downplays any connection between the bylaw and large-scale residential development.
“That’s a broader market forces matter that is entirely separate from rental housing,” he said, adding that he hadn’t seen any acceleration of the building trend. “That was happening from year to year and I would consider it to be separate from whether or not there is a bylaw.”
Yet, the City’s statistics from the Student Accommodation Study seem to contradict Henry. In 2010 the amount of units under construction in Waterloo spiked at 1,474, up from over 1,200 from the previous year. Meanwhile, the number of properties licensed as lodging houses — typically low-rise buildings with shared facilities — has been steadily declining. In 2003 there were 139; in 2011 there were only 10.
There are a number of factors that could account for this decline, one being a lack of property to even get licensed as a lodging house.
Yet the demand for housing continues unabated.
“I believe [the vacancy rate] to be about 2.5 per cent in September,” said Milovick.
The Canadian Housing and Mortgage and Housing Corporation says that a balanced market lies between three per cent and six per cent, which means Waterloo is teetering on the side of a shortage. New swanky residences like Luxe Waterloo are also creating demand for luxury apartments for student, which may very well price low-income families and individuals right out of the city.
We did a little apartment hunting to see how far your money actually gets you in the Waterloo rental market.
Who says living like a student means you can’t do it in style? Luxe Waterloo is part of a new wave of high-end student residences that come equipped with flat screen TVs, brand new appliances, granite counters and ensuite bathrooms. You still have to have roommates, but for $675 a month you only have to share with three other people as opposed to four or five.
Pros: Has basically everything you ever need.
Cons: Might be difficult to leave your house and actually go to class. Plus that price point isn’t necessarily friendly to the budget-conscious person.
One bed in an apartment building
The mid-range gets you into an apartment unit that you’ll share. Several listed options are nice, though not quite as high-end as Luxe. In some, you’ll also be sharing a bathroom or other amenities with your new flatmates.
Pros: Easier to find availability in these due to the number built in the area for the student market.
Cons: For slightly more, you get the added perks that a high-end building has to offer, and for slightly less you save some money without giving up much.
A cozy bedroom in a house
In the $495 range, bedrooms in shared houses are the norm. On inwaterloo.com, the home of VIP Student Housing, one unit on Hickory St. included laundry, parking and internet — but you still have to pay your water bill and have up to four other roommates.
Pros: Cheaper, for a start. Plus you get some of the amenities promised by the higher end facilities.
Cons: It’s a student house, which can be a pro depending on how you look at it. Regardless, expect to be cleaning up a lot after parties and your roomies’ 2 a.m. munchies attack.
Shared apartments further afield
There is a place where the rent is reasonable and — shocker — you could even afford an apartment all on your very own. Kitchener gets a bad rap, but venture out of the bubble and you’ll find a revitalized downtown that the hipsters haven’t quite yet discovered, which means rents are still on the reasonable side.
Pros: More bang for your buck
Cons: The distance will be frustrating for people who like going out in their PJs — but keep in mind, the area is well served by the GRT.
This story originally appeared in The Cord’s new community edition, which publishes once per month. The first issue printed Oct. 18, the next will be out Nov. 15. Check it out online: community.thecord.ca