19 juni 2020

Reason

The Netherlands expected an increase of 14,900 students living away from home for the next four years. This increase was entirely attributed to the arrival of international students[1]. Due to ongoing globalization, expectations were that this increase would continue unabated. As a result, the demand for student housing would also grow.

Now that we are faced with the COVID-19 crisis, there are doubts about the expected increase. The COVID-19 measures have had a major impact on the international movement of people and resources and also on the conduct of (international) students. Just think of closed borders, problems with applying for visas and loans, taking admission tests and the deterioration of the parents' financial position. The Netherlands Broadcasting Corporation (NOS) has indicated that the arrival of international students will probably come to a halt[2]. This will have a direct impact on universities and colleges, because the proportion of international students sometimes amounts to well over twenty to fifty percent of the total number of students.

There is a short­term and a long-term scenario for the student housing demand due to the COVID-19 crisis. Before discussing these scenarios in more detail, let’s consider the background for the student housing demand.

Background

Traditionally, students are housed in standard houses in the Netherlands. In Amsterdam, Utrecht, Groningen and other Dutch student cities, many students live in or around the city centre, in apartments or flats where they share common facilities. Many of these houses are let to students by private individuals.

Having a network is important to be eligible for housing in these student residences. Housemates (or flatmates) are often selected based on references from acquaintances or the other students organize viewings to meet potential housemates.
This type of housing makes it difficult for international students to find a place to live in the Netherlands. They usually do not have a network yet.

Not only is it often difficult for international students to find housing in the Netherlands, but they also have different requirements and needs. In addition to a quantitative demand, there is also a qualitative demand[3]. For example, they require study areas, sports facilities, laundry facilities and multifunctional areas. And international students like to live closer to the schools, on or near campus.

This means that the demand from international students is more in keeping with the model in the United States and the United Kingdom. In these countries student housing is usually linked to a university. Students often live in housing blocks near or on campus. The fact that available houses are linked to the universities gives students and their parents' peace of mind: if students are accepted at the university, they will get suitable accommodation.

Role of universities and colleges

Universities and colleges like to see international students enrol in their organization. Finding suitable housing for this target group is necessary to compete with universities in other countries. In addition, it is important to organize community programmes for this target group, so they can build a social network. For international students, their studies and social life are completely intertwined.

At the same time, the implementation of suitable student housing is a challenge: existing student real estate already faces considerable sustainability issues, there is limited room to invest and it is not always advisable to own this type of real estate. Therefore, universities often choose (especially in case of campus development) to rent non-student real estate (non-core assets). Another option is selling land owned by a university. But if land is sold, the use of the plots sold can no longer be influenced. A third option is a leasehold concept, where a right of superficies (i.e. the right to erect / build structures on the land) is granted, but ownership will be retained. This way, the educational institute will maintain control over the development and can make agreements about the quality, price and type of student housing. In short, plenty of reasons and possibilities to provide student housing, but will the demand persist after the COVID-19 crisis?

Scenarios

The student housing market has proven to be a crisis-proof sector (Figure 1). Bonard, a renowned research firm specialized in student housing, has outlined two scenarios for this crisis.

hevo_afbeelding_1_studentenhuisvesting.jpg

Figure 1, source: Bonard

Short-term scenario
The most likely short-term scenario is the so-called ‘U curve’. If we assume that students will return to classes in autumn when the current measures are eased, the demand for student housing will increase again. It is expected that students will start attending classes again in a different and appropriate (safe) manner. Hybrid teaching methods (partly physical, partly online) will become a frequent phenomenon.

hevo_afbeelding_2_studentenhuisvesting_u-shape.jpg

U curve, source: Bonard

The proviso of course is that we will not see a W curve, where the world sees a second wave of COVID-19 infections and corresponding measures will need to be taken. The way in which students will eventually respond will also depend on the individual. The University of Leiden reports that their international students respond in different ways[4]. Some students continue to live in the Netherlands, others go back to their country of origin. Many students will want to return to the country where they studied.

Long-term scenario
In the long term, it is expected that the student housing demand will completely recover to the level it was at before the COVID-19 crisis, due to further globalization and an increase in student mobility. The arrival of international students and the increasing demand for student housing predominantly depend on the duration and scope of the COVID-19 measures and not so much on the economic impact of the virus.

hevo_afbeelding_3_studentenhuisvesting_w-shape.jpg

W curve, source: Bonard

However, there might be changes in the demand from international students that also provide opportunities for Dutch universities and colleges: 

  • Preference for countries with a robust economy: countries which are economically sound are expected to become more popular. After their studies, international students often hope to find a job in the country where they studied. During the economic recession that started in 2008, many students from the Mediterranean decided to move to economically stronger countries in North-Western Europe to study.
  • Preferred type of student housing: if the international student mobility increases again during the era of social distancing (until a vaccine has been found), the demand for student housing may change. One of the changes that may occur is an increase in the demand for studio flats/apartments where students can live independently and have their own facilities, as opposed to shared facilities. This means that the current student complexes have to be adapted. If the COVID-19 crisis is completely behind us, we expect to return to the 'old normal' situation with regard to housing types and living requirements. Education will very likely become a mix between digital and live education.

Conclusion

As expected, student housing will still provide opportunities for universities and colleges to improve their competitive position after the COVID-19 crisis. In addition, the Netherlands seems to be in a favourable position. However, it does mean we will have to face the challenge of providing adequate student housing in order to meet the qualitative demand of international students. Dutch universities and colleges seem to be losing out to universities in other countries due to a lack of certainty for the international students. By implementing different concepts, universities might be able to provide suitable housing for international students. With or without the coronavirus, the Dutch educational institutes will have to take action to take on the international competition.

[1] NRC (3 October 2019) Vraag naar studentenwoningen neemt toe door buitenlandse studenten.
[2] NOS (28 April 2020) Zorgen over internationale studenten, komen ze nog naar Nederland?
[3] Nijënstein, S., Haans, A., Kemperman, A. D., & Borgers, A. W. (2015). Beyond demographics: human value orientation as a predictor of heterogeneity in student housing preferences. Journal of Housing and the Built Environment, 30(2), 199-217
[4] Universiteit Leiden (17 April 2020) Should I stay or should I go? Internationals in Leiden


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