Ontario universities turn to private partners to build student housing
Facing high costs and capital constraints, schools like U of T and Ontario Tech are using partnerships to add thousands of new residence beds.
TORONTO — The University of Toronto plans to add up to 5,500 new student residence spaces by 2036 through partnerships with private developers.
Facing a traditional cost of roughly $300,000 per bed, the university chose to find a partner-investor to help foot the bill. 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 first two projects under the new Build More 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.
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The push comes after a foreign student enrolment boom was seen to be putting pressure on local housing markets. In 2024, the Ontario government enacted legislation making it easier for qualifying post-secondary schools to build on their own land, but that does not address the need for more funding.
“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.
At Ontario Tech University in Oshawa, the financing arrangement is particularly striking. “We have not put any capital into The Ridge,” said Brad MacIsaac, Ontario Tech’s vice-president of administration.
The Ridge is a 450-bed residence being built on university land. Ontario Tech leased the land for 99 years to a private development group led by Campus Suites and Woodbourne. Campus Living Centres will operate the residence, with the private partners taking on inflation and occupancy risks. Ontario Tech will share in the revenue and eventually take ownership of the building.
MacIsaac said the private proposal was roughly 20 per cent less than what the university projected it would cost to build and operate the residence itself, and could get it open about two years sooner. “By partnering, it’s allowing us to do more faster,” MacIsaac said.
U of T says its partnerships are intended to reduce, not eliminate, its capital contribution. “This allows U of T to preserve and optimize its financial resources for other priorities, including academic buildings, teaching, research and student supports,” Mabury said.
The scale of the shortage is considerable. A February report from the U of T student-led advocacy group HOUSE Toronto estimates university residences and privately operated purpose-built student accommodations together provide about 12,100 beds for more than 64,000 students at the St. George campus.
Other institutions are assembling their own combination of public and private financing. Toronto Metropolitan University’s planned 1,370-plus-bed Bond Street residence is being developed with Cedar Podium, with the first phase backed by $83 million in debt financing from the province’s Building Ontario Fund. In an email, TMU said the partnership allows it to preserve capital for future academic investments.
The financial pressures facing Ontario’s universities underscore the appeal of such arrangements. About two-thirds of their income now comes from non-government sources, while public funding per student in Ontario is the lowest in the country, according to a report from Higher Education Strategy Associates.
Mike Gordon, global chief investment officer of real estate at Harrison Street Asset Management, helps decide where the firm invests in student housing. The firm has a Canadian portfolio of about 4,500 beds across four provinces.
“Canada has a housing problem inside of a housing problem,” Gordon said. He noted purpose-built housing provided by universities and private operators accommodates only 15 per cent of full-time students in Canada’s largest markets.
With files from Financial Post