In many college and university communities, there are complaints about too much student housing, but this problem tends to be the polar opposite for graduate student housing. In numerous rental markets across North America, there is a lack of on-campus graduate student housing available, often resulting in fierce competition and long application wait-lists.

The shortage of graduate student housing at many campuses has become a contentious issue, as the following cases illustrate.

• At UC San Diego there was a reported 2,500-person wait-list for graduate student housing. Many are left to find alternative options in the off-campus housing market.
• At Brown University campus housing is not guaranteed for graduate students and only 100 of the university’s 2,000 graduate students live in Brown-owned housing, due to lack of options and availability.
• McMaster University, boasting a graduate student population of over 4,000, has no designated graduate housing at all. However, the university is exploring options to build their first graduate residence in the very near future.
• The University of Miami has foregone the idea of providing graduate student housing in their ten-year housing plan and opted to prioritize the undergraduate population.

Problems relating to a shortage of graduate or family housing are nothing new; however, the earliest mention of the issue we could find dates back to August 1947 at Harvard University.

So why is there such a shortage of graduate student housing?

There are a few reasons that potentially attribute to the shortage:
 

• Undergraduate student populations tend to be significantly larger than the amount of graduate students at most academic institutions. This population divide means both on-campus and off-campus housing tends to offer more options and availability for undergraduate housing.
• Priority is often given to undergraduate students, when it comes to on-campus housing. It’s not uncommon to see on-campus housing guaranteed for freshmen or sophomore students, but much less common for graduate students.
• In the off-campus housing market, properties often aren’t marketed to specific segments like graduate students; rather, they are marketed to “students” as a cohesive segment of renters (with the exception of a few graduate-specific properties often operated by the schools). This scenario can be problematic in some cases, as graduate students don’t necessarily want to share living spaces with younger students.

Needless to say, there is certainly untapped potential in the graduate student housing market that hasn’t caught investor’s attention yet. Here are some statistics and information for the United States from the 2016 Council of Graduate Schools report.

• In 2015, for only the second time since 1986, the number of applicants to masters and doctoral programs surpassed 2 million in the U.S. There were approximately 2.18 million applications for graduate programs in Fall 2015.
• Institutions responding to the CGS survey enrolled more than 1.78 million students in graduate programs.
• There was a 4.9% increase in first-time graduate enrollment at public institutions and a 1.8% increase at private, not-for-profit institutions.
• This was the fourth consecutive year in which institutions reported an increase in first-time enrollment for graduate programs.
• Applications to U.S. graduate schools increased 1.2% in 2015.

While these numbers are certainly favorable, consider the fact there were roughly 17.2 million undergraduate students in the United States in 2015, a significantly larger number in comparison to graduate students netting just below 2 million.

It’s important to note that student housing owners, operators, and investors interested in graduate student housing should pay close attention to their local school’s graduate enrollment. For example, Yale University is a very favorable market for graduate student housing as the school boasts 6,859 graduate and professional students, which outnumber its 5,453 undergraduate students. Another example of a favorable school would be Harvard University, boasting roughly 15,250 graduate and professional students.

Another consideration with graduate housing beyond the numbers is the difference in lifestyles between undergraduate and graduate students. Student housing owners, operators and investors should identify that graduate students tend to gravitate towards different residential housing preferences.

Michael Ytterberg from BLT Architects breaks down some of the key features and amenities that graduate students are looking for in their housing. Current student housing owners and operators with primarily undergraduate tenants may experience difficulty in attracting graduate students who have different needs and desires.

So is there investment potential in graduate student housing?

Much like middle-market student housing, it would appear that graduate student housing is a relatively untapped market for student housing investors looking to target a smaller, but growing segment of the student housing market. It would be reasonable to predict that if graduate enrollment continues to grow, more college and university markets will introduce graduate-targeted student housing.