February 5, 2018
Syracuse, N.Y. — Syracuse has suddenly become a magnet for developers of expensive student apartments loaded with amenities.
Four off-campus, student apartment buildings with a capacity for 690 tenants have been built in the city by private developers in the past couple of years. Four more, with a total capacity for 2,024 tenants, are under construction or have been proposed.
That has city officials and a University Hill planning and development organization worried that the student housing market in Syracuse could quickly become saturated, leading to a rise in vacancy rates in the neighborhoods surrounding Syracuse University.
Copper Beech Commons student housing
The new housing comes fully furnished and with lots of amenities like fitness centers and game rooms. Copper Beech Commons, which has 304 bedrooms, has indoor basketball and sand volleyball courts, as well as a dance studio. Aspen Heights, a 422-bedroom complex under construction on Brighton Avenue, will have tanning beds and a sauna. And the Standard at Syracuse, a proposed 630-bedroom, 13-story high-rise, would have a golf simulator.
They don’t come cheap, at least not by Syracuse standards. Rents average around $1,000 to $1,200 a month — per bedroom. (In contrast, rents in apartment homes in the university area typically range from $500 to $600 a month per bedroom.)
Unlike most apartment buildings, rents at purpose-built student apartment projects are usually per bedroom, rather than per apartment. So an apartment with four bedrooms could bring $4,000 a month in rent for the property owner. That’s at least twice the typical rents at similar sized apartments in downtown Syracuse.
Three of the four completed projects were built by local developers and one by New York City-area developers with Syracuse connections.
Copper Beech Commons on University Avenue and the 80-bedroom Skyler Commons on Harrison Street were built by Syracuse developer Norm Swanson.
Local contractor James Breuer built the 143-bedroom Creekwalk Commons development on West Water Street. #BLVD404, a 163-bedroom project opened this summer on University Avenue, was developed by three Syracuse University graduates and, until its almost immediate sale to one of the nation’s largest developers of university student housing, was partially owned by SU basketball coach Jim Boeheim. (The building’s tenant lounge still contains a display of the coach’s memorabilia.)
But the more recent projects that have been proposed or are under construction are significantly larger and are the work of national firms that specialize in high-end, off-campus student housing.
The largest is The Standard at Syracuse, the high-rise proposed at East Adams Street and University Avenue by Landmark Properties, of Athens, Ga. The company withdrew its original plan for a 650-bedroom, 17-story tower this summer after Syracuse University objected to the building’s height, saying it would create a barrier between the university and surrounding streets. Its new plan calls for a building with four fewer floors but just 20 fewer bedrooms.
Blue Vista Student Housing Acquisitions LLC, an affiliate of Peak Campus, of Atlanta, filed plans in October for a 604-bedroom, seven-story student apartment building on East Genesee Street.
University Student Living, of Marlton, N.J., six-story, 368-bedroom student apartment building on East Genesee Street near Syracuse University.
The three projects would contain a total of 1,602 bedrooms. If they are all built, it would bring to 2,714 the total number of bedrooms in off-campus, purposed-built student housing added to the Syracuse market in recent years. The Syracuse Planning Commission will hold public hearings on all three of the proposed projects at 6 p.m. today at City Hall.
It’s easy to see the attraction Syracuse has to student housing developers. The city and its next-door suburb DeWitt have nearly 30,000 college students. The majority — 21,970 — attend Syracuse University. Upstate Medical University has 1,481 students and State University College of Environmental Science and Forestry (at Syracuse) has 2,250. Le Moyne College in DeWitt has 3,478 students.
Jared Hutter, one of the developers of #BLVD404, said Syracuse was an underserved and even neglected market for off-campus student housing for many years. That began to change with the opening of Park Point, a 226-bedroom student apartment building at 417 Comstock Ave., in 2010, and a few smaller projects, including his, more recently, he said.
"All of a sudden, people saw what we were building and they looked at the rents and saw the premium market prices," he said.
David Mankiewicz, president of the University Hill Corp., said national firms that specialize in building and managing student apartment projects have already filled up larger markets — those with 50,000 or more students — and are just now focusing on second-tier markets like Syracuse.
Mankiewicz said his organization, a nonprofit economic development planning group, is worried the sudden construction of several large student apartment projects may result in large vacancies in homes that have been converted into student apartments over the years in university-area neighborhoods. With enrollments at SU and other local colleges relatively steady, any new student housing will pull tenants from existing apartments, he said.
The University Hill Corp. and neighborhood groups are opposed to the continued conversion of single-family homes into apartments. They cite problems with noise, parties and garbage.
Mankiewicz said his organization has not objected to the purpose-built student housing projects that have gone up in the past couple of years because they might help slow down the conversion of neighborhood homes into student apartments. However, he said the organization now worries that the construction of lots more off-campus housing could hurt the residential neighborhoods surrounding Syracuse University.
"We’re fine with the idea there would be some movement of students, but if you have this cataclysmic move, you could see vacant, boarded up homes," he said.
Syracuse University likely does not have to worry about competition from developers of off-campus housing. It guarantees that its residence halls are full by requiring freshmen and sophomores to live on campus.
However, the university said it is worried about the impact that the construction of several large student housing developments within a short period of time could have on the neighborhoods surrounding its campus.
In an Oct. 20 letter to the city’s Board of Zoning Appeals, SU Associate Vice President Eric Persons said the university is "deeply concerned about the potential negative impact these projects will have by dramatically shifting residents away from one neighborhood and into another."
"What could be seen as an attractive investment opportunity in one neighborhood could be developed at the expense of another neighborhood," he said.
Persons urged the city to obtain a detailed market analysis before approving any new student housing projects.
In August, the Syracuse Industrial Development Agency commissioned a study by Camoin Associates, an economic development consulting firm in Saratoga, to determine how many new units of student housing the market can bear and the impacts the projects may have on city neighborhoods.
Honora Spillane, deputy commissioner of the city Department of Neighborhood and Business Development, said the results of the study will help city planners as they consider whether to approve the new, bigger projects and whether the industrial development agency should grant them tax incentives. Spillane said she hopes to receive a draft of the study by the end of November.
"We want to know the current market, the price points and future demand," she said.
Landmark Properties commissioned its own market analysis to support its proposal for a 13-story student apartment building at East Adams Street and University Avenue. The report from Danter Co., of Columbus, Ohio, said the market for off-campus student housing is significantly underserved.
Total fall 2015 enrollment at SU, Upstate Medical and ESF was 25,025, but on-campus housing at the three schools can accommodate only 9,042 students, according to the report. That means there is a "demand potential" for off-campus housing for 15,983 students, the company said.
Even with construction of Landmark Properties’ proposed 630-bedroom project, purpose-built off-campus housing in the university area would have the capacity to house only about 15 percent of the those nearly 16,000 students, the report said. In the U.S., 30 percent to 40 percent of university students in off-campus housing typically live in apartments specifically built for students, it said.
Danter said existing off-campus student housing in the city is at nearly full occupancy and will likely remain that way because their rents are typically below the $1,250 to $1,650 monthly rents that the Standard at Syracuse will charge per tenant.
"All campus area apartments, even those in smaller properties or with few amenities, should continue to achieve high occupancies and rent growth," the company said.
Hutter’s project filled up with students soon after opening. That drew the attention of American Campus Communities, the big, Austin, Texas-based university housing developer that bought Park Point two years ago.
Hutter said he and his partners, including coach Boeheim, had planned to retain ownership of #BLVD404. However, they decided to accept American Campus Communities’ offer — a price he declined to disclose — out of concern about a potential future oversupply with the addition of developments with the capacity for hundreds of tenants, he said.
"Having multiple projects that big could become a little hairy," he said. "Having one that size may not be so terrible."
Hutter said projects that are close to the SU campus likely will continue to do well. But those that are even a few blocks off campus, especially on streets students do not typically frequent, could struggle if the market gets flooded.
"Where do students want to live?" he said. "These projects can bring money and jobs into the area, but if the city doesn’t think they will be viable in a couple of years, it should say no."
All four of the projects built in the last couple of years and the one under construction on East Brighton Avenue have received tax exemptions.
Eager for the economic investment, the city’s industrial development agency exempted Copper Beech, Skyler Commons, #BLVD404 (now named U Point) and Creekwalk Commons from a total of $1.57 million in mortgage recording tax and sales tax on construction materials.
The Onondaga County Industrial Development Agency provided an even more generous package of exemptions to the Aspen Heights project in hopes it would spur a revitalization of the Outer Comstock area along East Brighton Avenue. Over the objections of the city, the agency granted the project $3.47 million in property, sales and mortgage recording taxes.
The developers of the three proposed projects currently before the city have not applied for tax exemptions, but such applications often come after the city Planning Commission and, if need be, the Board of Zoning Appeals have completed their reviews. (Update: Peak Campus has applied to the city’s industrial development agency for $1.7 million in sales and mortgage recording tax exemptions.)
Mankiewicz said the city and county should stop granting tax exemptions to student housing projects. Given the high rents that the projects are commanding, they likely would be built without tax exemptions, and it makes no sense to be incentivizing construction that could lead to an oversupply, he said.
"The public policy rationale to providing tax breaks is hard to see," he said.