Universities turn to private partners to build student housing amid funding crunch
Schools like the University of Toronto and Ontario Tech are using partnerships to build thousands of beds with less of their own capital.
TORONTO · The University of Toronto is seeking a private partner to help build as many as 5,500 new student residence spaces by 2036, a move that would require far less of its own capital. Its first two projects under a new housing initiative are planned for the downtown St. George campus, where a joint venture with developer Tricon Living would add more than 1,200 beds. Scott Mabury, the university's presidential advisor on real estate, said the approach is designed to deliver "substantially more housing, more efficiently and with significantly less capital required from the university." The effort follows a foreign student enrolment boom that increased pressure on local housing markets, with schools like Conestoga College in Kitchener and Canadore College in North Bay becoming flashpoints.
Mabury said the partnerships aim to reduce the university's capital commitment to new residences. "This allows U of T to preserve and optimize its financial resources for other priorities, including academic buildings, teaching, research and student supports," he said. The new housing would also help address a shortage of options for upper-year and graduate students, as the existing residence portfolio is weighted toward first-year students. A February report from the student-led advocacy group HOUSE Toronto estimates that university and private purpose-built accommodations together provide about 12,100 beds for more than 64,000 students at the St. George campus.
Other schools are pursuing similar partnerships with different financial models. At Ontario Tech University in Oshawa, a 450-bed residence called The Ridge is being built without any university capital. "We have not put any capital into The Ridge," said Brad MacIsaac, Ontario Tech's vice-president of administration. The university leased land for 99 years to a private group led by Campus Suites and Woodbourne, with Campus Living Centres set to operate the building. MacIsaac said the private partners are taking on inflation and occupancy risks, while Ontario Tech will share revenue, oversee student programming and eventually own the building.
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MacIsaac said the private sector proposal came in roughly 20 per cent cheaper than the university's own cost projection and could deliver the residence about two years sooner. "By partnering, it's allowing us to do more faster," MacIsaac said. Toronto Metropolitan University is developing a planned 1,370-bed residence on Bond Street with Canadian firm Cedar Podium, with the first phase backed by $83 million in provincial debt financing. The university said the deal lets it preserve capital for academic investments and increased its land holdings, as it became the owner of the Bond Street properties.
These arrangements are attractive given the financial pressures on Ontario's post-secondary institutions. About two-thirds of university income now comes from non-government sources like tuition and donations, according to a report from Higher Education Strategy Associates, while public funding per student in Ontario is the lowest in the country. "There is a lot of desire right now for schools to build residences, but they don't necessarily have the capital coming in," said Mike Moffatt, an economist and founding director of the University of Ottawa's Missing Middle Initiative. While recent provincial legislation made it easier for schools to build on their own land, it did not solve the funding challenge.
The partnerships must also make financial sense for the developers involved. Mike Gordon, global chief investment officer of real estate at Harrison Street Asset Management, said Canada has "a housing problem inside of a housing problem." His firm has built a Canadian student housing portfolio of about 4,500 beds across four provinces, with roughly 2,750 currently occupied and the rest under development. Gordon said purpose-built housing from universities and private operators accommodates only 15 per cent of full-time students in Canada's largest markets, indicating a significant shortage.
With files from Financial Post