(Photo by Don Kadair)
On April 18, the city-parish Planning Commission is scheduled to vote on the Summit at Southgate, a proposed high-rise of student housing that—at 18 stories and 455 units, including mostly four- and some one-, two-, three- and six-bedroom units—would be among the parish’s tallest buildings and densest multifamily complexes.
Developer R.W. Day, who is proposing the project, declines to discuss it, though it’s not a new idea. Twice before, as far back as 2000, he has received preliminary approval from the commission for the building, which has always been included in site plans for his Southgate mixed-use development.
Earlier this month, however, he sought approval for a final development plan for the high-rise, which included more details about the building and suggested he may finally be ready to move forward with it.
But the market is far different than when Day’s architects first started sketching plans for the Summit at Southgate. Today, there’s a veritable glut of new student housing in the shadows of LSU, and more is on the way.
In 2015 alone, 826 units of student housing in three new complexes were added to the market. By the end of 2017, three more complexes are slated to go up, adding another 663 units to the market, according to appraiser Wesley Moore at Cook Moore and Associates.
That’s a total of 1,489 units in three years, not counting the Summit at Southgate’s planned 455 units.
As a point of reference, the average absorption rate in the local market is 850 units per year.
“You don’t need that many units in general, much less student housing units,” Moore says. “The numbers are ridiculous.”
Then, there’s the LSU Nicholson Gateway Project, a mixed-use development that the LSU Foundation is planning to develop on Nicholson Drive. It calls for a total of 1,600 or so units of student housing, the first phase of which is scheduled to be completed in 2018.
Given that Texas investors in 2015 paid $108.6 million for The Standard, a 287-unit student housing complex just outside the campus gates, it’s understandable that developers are bullish on the market. But those who are late to the table may have missed the feast. There’s arguably more new inventory than the market needs, to say nothing of the thousands of units in older properties near campus.
What’s more, the state-funded TOPS scholarship program, which has inadvertently upped students’ standards of living over the years by enabling them to afford relatively luxurious apartments, is in danger of being cut by the Legislature. At the same time, LSU is facing budget cuts that could negatively impact enrollment and, at the very least, increase student fees.
In other words, this might not be the best time to invest in new student housing.
LSU Foundation officials, though, say they’re not worried yet about oversaturation.
“We are confident there will continue to be substantial demand for high-quality, on-campus housing, which also contributes to the learning experiences of our students,” says LSU Foundation spokeswoman Sara Crow.
Moore sees things differently.
“We’re going to see some evolutionary change,” he says.