When supply fails to meet demand: models of student housing in Europe

The financial implications of going to university are making headlines in both the US and the UK. Rising study costs around the world are at odds with the notion that higher education should be accessible to anyone and everyone, regardless of background. As part of the total cost of a degree, Manu Moritz takes a look at the different ways in which affordable housing is provided to students in Europe.

The United Kingdom has long been seen as a leader in higher education both in Europe and around the world. The best and the brightest flock to UK institutions year after year, seeking access to some of the highest quality academics and most cutting-edge facilities and resources available. But the UK is also an expensive place to study. It’s not just high tuition fees; it is also a result of the high cost of living in the country’s university towns and cities. The cost of student housing in London has resulted in rent strikes at some student residences at UCL.

Shelly Asquith, Vice President of Welfare at the National Union of Students (NUS) explains: “It’s not unreasonable when the rent in London is more than 100% of the maximum loans and grants available for students.”

Even outside of London, affordable accommodation remains elusive for many students in the UK, with the average student housing costs nationwide still in excess of 95% of the maximum grants and loans available to students.

Richard Kington, Director of Accommodation Services at the University of Edinburgh and CUBO Executive Committee Member, asserts that even while affordability of student housing is a growing issue in the UK, there does not appear to be any focus on the topic at a national level. Instead, most discussions are happening at the university level. Kington describes the limitations to local responses: “The costs of providing new accommodation do not easily lend themselves to providing ‘affordable’ rents… they need in some way a university subsidy or […else] lower rents are achieved only by increasing those of other students.”

UCL Student Rent Strike © Finbarr Fallon (www.finbarfallon.co.uk)

UCL Student Rent Strike © Finbarr Fallon (www.finbarrfallon.co.uk)

The picture in continental Europe

The Netherlands is an example of the fine line between affordable and unaffordable from the student’s perspective. In September 2015, the nearly €270 monthly grant that students received if they lived away from their parents’ homes was discontinued, and students’ only option now is to take out loans. As a result, the number of Dutch first-year bachelor students living away from their parents has dropped from 28% to 13% in a single year. Yet even with the substantial drop in first year students living away from home, student residences are at capacity.

The country has a system of social student housing associations that are part of the wider social housing system. There are no direct subsidies for student housing construction, but social housing associations do benefit from a system of guaranteed loans. Rents are regulated through a points system for both the private and the social sectors. Additionally, students can apply for housing benefits, depending on their income, age, rent and type of accommodation. The benefits are more generous for studios and apartments than for rooms with shared facilities, which explains why developers have developed more such accommodation.

While the Netherlands may have cut back on student welfare provision, other parts of continental Europe where student welfare remains intact are still faced with housing affordability issues. For instance, Austria has maintained a strong student grant programme and provides social housing throughout the country, but many students still have trouble affording rents. According to OeAD, the Austrian agency for international mobility and cooperation in education, science and research, “The government no longer financially supports building or renovating student dorms. The only subsidies which might be taken are general ones which may apply to every building.” Moreover, while there are discussions of affordable housing in general, “affordable student housing is not on [the government’s] agenda at the moment”.

Student housing in Amsterdam

Student housing in Amsterdam © Manu Moritz

In Germany, Petra Nau, Director of Housing at Deutsches Studentenwerk (Germany’s national student organization) confirms that “affordability is indeed an issue currently and in the future for student housing in Germany. The biggest share of students’ monthly budgets is spent on rent.” Moreover, given their generally lower incomes, Nau stresses the importance of the cheap rents of Studentenwerke-provided housing for first-year and international students. The Studentenwerke also provides students with grants and interest-free loans to help with living expenses – adding a layer of affordability to students housing in the private market. Still, Deutsches Studentenwerk finds that there is a lack of student-specific housing in Germany and is working to ameliorate that situation by “calling on the German government and federal states to fund the creation of 25,000 additional places in new halls of residence” and to renovate and better maintain older residence halls.

Like Germany, France has a national student organization, CNOUS, which is run regionally via CROUS, which functions similarly to the Studentenwerke, providing subsidized housing and financial aid for students. CROUS also matches students with French public housing subsidies like the APL, ALS and Loca-pass to help with rent and deposits. Nevertheless, even with all these available resources, affordability is still seen as a major issue for students in several cities across the country given tight real estate markets (most notably in Paris). Currently, CROUS provides 169,000 beds nationally for a student population of approximately 2.5 million (1.6 million of whom live away from home), and given the student housing shortages, is actively looking to expand its housing stock.

Unlike the unified national student organization of France and Germany, Italy has a relatively disjointed student aid structure. Each region of Italy has an Ente per il diritto allo studio (Regional Agency for the Right to Education) that is responsible for the distribution of public resources (i.e. housing and/or financial aid) for students within their region. However, each of these regional organizations are funded and function independently of one another, providing different types and levels of services to the students in their region. Thus there is great regional disparity of resources available to students, with the generally wealthier (northern) regions providing more than their poorer (southern) regions.

University Library, Free University of Berlin

University Library, Free University of Berlin

According to Susanna Graziano of Camplus, a network of university residences in Italy, “Affordable student housing – in the sense of publicly owned student residences – does not meet the current need for [affordable] housing in the country.” She continues: “Affordability is also an issue because of the consolidated and large private rental market which has flourished due to the lack of purpose-built student housing.” Student reliance on private housing has led to a number of issues, most notably when renting the now ubiquitous unregistered residences. There are, Graziano says, discussions regarding “the need for further crackdowns on unregistered contracts and, obviously, the need for more affordable student housing schemes”. However, while there may be some local initiatives to address these, “There are no national incentives for developers of affordable student housing, [although] it is an ongoing issue being debated.”

In Sweden, accessibility to housing tends to be the greater issue for students. According to the national Studentbostadsföretagen, there is a clear pattern in which “cheaper dorm rooms often have shorter queues than more expensive student apartments [showing that] it is in most cases not the affordability that is the problem, but finding an available student apartment all together”. There are no public subsidies available for the construction of student housing in Sweden, and strict building regulations push construction costs up. At the same time, rents are regulated ­– not only within student housing foundations, but also in the private sector – making it a challenge to make the business case work.

In response to the student housing shortage, “The [Swedish] government and public authorities are looking for ways to make it cheaper to construct new housing.” Strategies under discussion include: making building regulations more flexible and less complicated, shortening the planning process, improving industrial building and innovation and permitting mixed use with subsidized housing developments. Projects like Stockholm 6000+ and Gothenburg 7000+ are results of the growing sense of urgency to produce student housing faster; these projects bring all the stakeholders around the same table, speeding up the development of student housing.

Like Sweden, the primary discussion on student housing in Denmark is focused on the lack thereof rather than high costs. Per Juulsen, Director of Kollegiekontoret in Aarhus, explains that while new subsidized accommodations are being produced by social housing corporations (private developers are excluded from producing subsidized housing in Denmark), “The subsidized supply can only partly match the growth in demand, so the private market … is [rapidly] growing.” Subsidies for student housing in Denmark come from the municipalities and from the state, and can amount up to approximately 25% of construction costs, but only if they stay under a government-mandated price per square metre. This is a similar story to what is occurring in Norway, where housing supply is not growing quickly enough in general due to lengthy construction approval processes at the municipal level. Thus, even though the Norwegian government’s funding of student resources has kept pace with the growing student population’s needs, a physical housing supply constraint causes accessibility issues for students.

When supply fails to meet demand…

Throughout Europe, there is a growing imbalance between the supply and demand of housing for students due to growing student populations, tightening real-estate markets in many university cities and, in some cases, reduced public subsidies for students. While the definition of ‘affordability’ is subjective and differs between countries and individuals, there is a general consensus that there needs to be greater accessibility to affordable student housing. As with many things in Europe, the strategies to address this issue vary. In the past, many countries relied on the state to provide resources as the primary means to address affordability issues for students. In most countries, public funding for student rents and subsidies is under pressure, and solutions need to be found elsewhere. Generally, this means that the private sector and PPPs will be the ones to pick up the slack. Regardless of the model a country adopts, one thing is clear: more student housing needs to be built.

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