Addressing the Housing Affordability Crisis Through Creative Campus Development

• By Jessica Orlando
• 04/17/25

Many Southern California college and university campuses are living amidst surging housing costs, driving the need to house more of their populations on campus. Especially for community colleges, the need to support millions of unhoused and housing insecure students has become a prominent issue that lawmakers and institutions alike are trying to solve. In 2021, California passed the Higher Education Student Housing Grant Program (Senate Bill 169) to directly fund housing for students on campuses across the state. While many campuses took advantage of this one-time grant opportunity, ongoing funds have since been reallocated due to budget shortfalls, and campuses are looking for other options.

Institutional populations across California include not just students but also faculty and staff as housing options off-campus become less affordable and employees are priced out of local markets. In response, Governor Newsom recently signed into law the State University Faculty and Employee Housing Act of 2024, a new bill that allows the California State University system to leverage state and federal tax credits to develop workforce housing on state-owned land. This new path to development can empower the CSU system to recruit and retain talented individuals to support their mission.

Newsom’s bill is one example of the available paths that institutions can pursue to drive campus housing development. However, construction costs still remain high, especially after increased inflation and post-pandemic supply chain and procurement obstacles. How can institutions navigate this ever-changing landscape to provide the housing that their students, faculty, and staff need?

Creatively Leveraging Funding and Existing Assets

In 2021, California Senate Bill 183 provided state-wide grant funding for campuses to develop affordable housing solutions for their students. Several campuses quickly mobilized to take advantage of this new funding to meet their housing demands.

To counteract the high cost of new construction, the leadership at Cal State Long Beach applied for this grant to build a new, ground-up campus housing facility to deliver market-rate rentals to students. The new development would then free up existing housing stock on campus to offer at affordable rates. This influx of rental income from the new development allows the campus to maintain their positive cash flow while increasing the number of available affordable housing units. 

The new project, La Playa Student Housing, will provide 420 double- and single-occupancy units, enabling the University to add 420 units of affordable housing distributed across their campus. This distribution creates a positive mix of student populations across ages and backgrounds, avoiding any stigma associated with students receiving aid. By taking advantage of an existing state level funding mechanism, CSULB leveraged their own assets to provide more affordable housing for their students without sacrificing their bottom line.

Navigating New Partnership Types

Newsom’s 2024 bill encourages Public-Private Partnerships (P3) and creative development and financing structures within the CSU system. However, only the CSU system benefits from the legislation. The availability of funding and the cost of financing remains a challenge for most colleges and universities. Certain kinds of P3 development can allow institutions to reduce their involvement and risk in the development of land assets, potentially offloading operational efforts and costs. P3 developments become feasible with the right mix of project programs, crafted specifically to generate adequate income while also serving the institution’s needs. Housing, dining or retail programs have typically been most promising, but viable revenue-generating uses continue to expand.

While P3 development may open more doors for campuses, navigating the nuances of the delivery model with new parties such as developers can be challenging. One way to distribute risk and share knowledge and resources within the P3 procurement method is to consider campus partnerships across institutions to develop projects collaboratively.

Interinstitutional Collaboration

UC Law San Francisco partnered with UC San Francisco and UC Davis to deliver the Academe at 198, a mixed-use P3 development that includes more than 650 below-market rate housing units for students and early career professionals. UC Law conceived the project but did not have the capital to execute it alone. By partnering, they were able to demonstrate strong evidence for new graduate housing demand given the blended populations that would be housed within the new development, creating a new model of shared residential life across institutions that was delivered successfully through P3.

Other campus partnerships are also happening in California to leverage statewide grant funding. There is the North District Phase 2 project, a new 1,500-bed housing project currently underway for the University of California, Riverside (UCR) and Riverside Community College District (RCCD). The project is sited on UCR’s campus but will have 326 beds dedicated to RCCD students, creating a blended community. This was facilitated by both campuses applying for Senate Bill 169, funding $126 million to cover nearly a third of the project’s overall costs. By teaming up, they were able to make a case to receive more funds and develop a project that will create a new type of community, furthering the mission of both institutions.

North District Phase 2 benefits both institutions by providing housing at a reasonable price point for UCR and RCCD students, while also giving transfer students greater proximity to the university and facilitating the sharing of resources across communities. As Heidi Scribner, Associate Vice Chancellor for Auxiliary Services for UCR described, “In order for us to educate the students of California and get them successfully through a degree program, the lines between institutions need to blur." 

Leveraging New Opportunities for Campus Housing

Affordable housing developers, arguably now more than ever, have a unique opportunity to expand their client pool to academic institutions such as CSU systems leveraging Newsom's new Faculty and Employee Housing Act. This legislation opens doors for campuses to address workforce housing needs in ways previously limited by funding mechanisms. To fully capitalize on these opportunities, CSU campuses can look to successful affordable housing projects for strategies that creatively leverage tax incentives and public subsidies to maximize funding and scale development.

The affordable supportive housing project Corazon del Valle (CDV) for Holos Communities leveraged a unique approach to take advantage of public subsidies to support a larger multifamily development in Los Angeles. Typically, housing developments are maximized within the constraints of the funding mechanisms available to the development team. This usually means that projects are limited to 80-100 units based on existing tax credit constraints, which also means that returns on investment are essentially capped. CDV was able to be broken into two separate projects on the same plot of land with 90 units each, achieving a full development of 180 units of individual and family housing with funding streams through Los Angeles County and California statewide financing programs.

Originally planned for 120 units, the developer was able to achieve full funding of the 180-unit design through tax credits for both projects, thereby improving the development team’s ability to increase its return on investment and provide a higher amount of housing to the community. Ultimately, the cost per unit of housing was lower for this combined project as compared with similar projects. Now that Newsom’s legislation has been approved, CSU campuses will be able to leverage similar tax incentives used to fund CDV to build workforce housing and can leverage similar strategies as CDV to build at a scale that is even more cost effective. 

Considerations for Institutions

California campuses like Cal State Long Beach, UC Law, and UC Riverside have taken meaningful steps in the face of the daunting challenge to provide housing options for their communities. These projects demonstrate the impact of creative funding strategies, institutional partnerships, and new financing models that leverage existing assets and shared resources, proving that even within existing constraints, solutions are possible. Other institutions looking to address the same challenges can leverage these case studies for their own benefit.

Think creatively about how you can use your existing campus assets to create opportunity. This could be relocating existing uses, building new types of housing to offload the demand in other areas of campus, or even looking at adaptive reuse of underutilized assets.

Consider strategic partnerships to share resources and knowledge and take advantage of opportunities such as grant funding or tax incentives. This can also further the missions of multiple institutions at once, building community and strengthening the overall goal of serving campus populations.

Explore new and emerging financing opportunities, whether they are tax credits available for state institutions or partnerships with a new cadre of developers with connections to alternate funding streams.

By implementing one or more of these strategies, educational institutions can become leaders in addressing the housing affordability crisis—and in doing so, they can help ensure that higher education remains accessible to all, supporting the well-being and success of students, faculty and staff alike.