The Power of Public-Private Partnerships for California’s Student Housing

Greg Skalaski shares how public-private partnerships (P3s) can support the growth of higher education institutions in California, providing the resources and expertise to modernize existing facilities and build new spaces that meet the needs of students.

Higher education in California is on the brink of change.  

Last fall, Governor Gavin Newsom signed Assembly Bills 648 and 893: a set of landmark legislation which will support housing expansion for the state’s community college and public university systems. 

Like other academic institutions nationwide, universities in California are grappling with lack of space and funding to expand student housing. Exacerbated by the statewide deficit of affordable housing, this gap is felt even more acutely by community colleges, with over half of California’s community college students housing insecure. Now as new land for development around major campuses becomes available, partnership with the private sector can deliver on this immense opportunity for higher education by providing the necessary funding to move these ambitious projects forward.  

At their core, public-private partnerships (P3s) pair a university’s need for new or updated facilities with private capital and expertise. With rising capital costs, shifting demographics, and limited public funding, many universities are struggling to modernize campus facilities without overextending constrained budgets. Campus services are now a core component of recruitment and retention for four-year universities, with high student expectations for campus housing meaning residence halls must deliver a holistic student experience. For community colleges, which are focused on providing student housing for the first time, P3s can support the delivery of transitional housing, taking advantage of the land and opportunity provided by the new legislation. 

In exchange for financing, an institution will provide land to a private partner who leases, constructs, and often operates the project on behalf of the university. Because occupancy doesn’t vary significantly year to year, the private developer receives predictable returns on its investment while the school can shift cost and risk and still provide new and modern facilities to its students. 

P3s have been instrumental in delivering development in California, especially in higher education, but with more space opening up, there is a significant opportunity for greater P3 implementation—particularly for community colleges who will now be able to expand their own campuses and associated infrastructure. As the state looks to diversify its workforce, community colleges have emerged as the lynchpin for economic growth. For these schools to attract and retain future workers, supporting their students with their housing needs and creating modern and well-maintained facilities will be at the heart of this engagement, with P3s mitigating some of the significant funding challenges.  

At Shawmut, we’ve seen firsthand the power of P3s. By aligning complex stakeholders and accelerating delivery, these partnerships provide universities with the needed expertise and resources for long-term growth. P3s can be easily implemented across a university’s real estate portfolio—from new dining and wellness centers to renovation and maintenance of existing facilities and integration of sustainability-driven initiatives like renewable energy infrastructure. Shawmut has partnered with several universities to work on both student housing and new dining and student center facilities—delivering critical amenities for these schools on time and within budget without diverting capital funds. 

By streamlining higher education development, P3s can enable California’s colleges and universities to grow by expanding their housing and facilities and ensuring the most sweeping effects of the new legislation are felt on campuses across the state.