Davis has many projects coming through the pipeline being billed as student housing. But what makes a project student housing? Besides the obvious answer of "its for students" these projects are designed in a much different way. While the trend for most multifamily has been a decrease in the size of the units student housing has seen the opposite effect. Projects like Sterling Fifth Street in Davis have average unit sizes of almost 1250 square feet and their largest unit is 1759 square feet in total. The reason is because the trend in student housing has been to lease to students by the bed and not by the unit. Davis Live in Davis has 71 units and yet a whopping 440 beds which comes out to over 6 beds per unit. Rather than 71 leases this project anticipates 440 individually signed leases with students. Developers do this for a few different reasons.
The first being the price per square foot is very attractive. The new Sterling Fifth Street project is asking $1259 a month for a bed lease. This rate is for the five bedroom units so the total rent for the unit is $6,295 a month. While sterling is restricted against double occupancy units other complexes like the Cantrill in Davis thrive on the double occupancy bedrooms, pushing rents per square foot even higher.
The second is the way impact fees are calculated by the City. In Davis these fees dont change regardless of the size of the unit so by increasing the average size developers spread these costs out as much as possible. If a developer were to do 6 micro-units instead of 1 large 6 bedroom unit they would pay 6 times the impact fees to the city which in Davis would add up to almost a $100,000 dollars!
The final reason is outdated zoning and density limits. This is one area that Sacramento has improved greatly but Davis still lags behind. Davis restricts density by units per acre but not by square footage. So if a project is limited to 30 units an acre, building the biggest units possible is an obvious way of increasing the net leasable area of a project. In Davis a 300 square foot microunit would count towards the density limit the same as a 1500 square foot 5 bedroom 5 bath unit.
Comments