A glimpse of USC's rapidly evolving housing market

Over the last few decades, the University of Southern California has transitioned from a school  attended mostly by commuting locals into a residential campus that houses students from every corner of the earth. And while USC's housing management department, TrojanHousing, has responded to the growth with several development and renovation projects, the limited size of the campus and its enclosure in an urban setting hinder ideal growth.  

From JOUR309 final

Above: Tuscany Complex (Westar Housing)

As USC continues to grow over the next decade, the new wave of private student housing developers will play a crucial role in determining the nature of the evolution of campus life. And one of these newcomers, Costa Mesa-based Westar Associates, has raised the stakes early. 

Picking up the slack

Before Westar Housing arrived in the Figueroa Corridor, its properties were owned by another student housing developer, Conquest Student Housing, which used to sit atop all others as the most prominent independent housing provider in the area. So when Conquest decided to cash out and sell the entirety of its USC assets, Westar CEO Bob Best saw an interesting opportunity. 

Best and his company bought seven properties from Conquest, including Roma, Pisa, Chez Ronnee and The Bungalows  on Shrine Place, Corsica and Habitat Soo Zee on 32nd Street near Royal and Tuscany on South Figueroa.

View Larger Map

The map above includes the areas of 32nd Street and Shrine Place where Westar's properties are located. The company's luxury complex, Tuscany (A), which includes a pool, workout facilities and ground floor retail is near the southeast corner of campus. The full list of addresses is below: 

• The Bungalows: 3036-3040 1/4 Shrine Place
• Chez Ronnee: 3030 Shrine Place
• Corsica: 715 West 32nd Street
• Habitat Soo Zee: 701 West 32nd Street
• Pisa: 3039 Shrine Place 
• Roma: 3025 Shrine Place
• Tuscany: 3670 South Figueroa Street

Following his decision to purchase the properties, Best talked with USC officials and the two sides formed a working partnership. They decided that while Westar would fully own the apartments, USC's housing department would manage leasing and building management. 

While Best often notes his love for USC, his alma mater, he says his primary reason for outsourcing management to the university has to do with economics.

From JOUR309 final

Above: Corsica (Westar Housing)

"The real key is to create enough supply so that private landlords have to compete, and get better service and better pricing," Best said. "And that's what I think 'SC is primarily interested in. As long as we do quality product, we are interested in competing to get as many students in here, and we're not going to be able to do that unless we give them better service and a better price."

From JOUR309 final

Best thinks he sees a clear path to a full wallet and a happy student body in his approach, but he also understands the complications that come with developing in this neighborhood. USC's student community coexists with a community of urban families, most of whom can't afford the kind of business the university setting attracts. 

"You can't antagonize or displace a lot of people," Best said. "What we're concerned about is being able to make sure that we don't infringe on affordable housing." 

From JOUR309 final

Above: Habitat Soo Zee (Westar Housing)

Be that as it may, Best doesn't plan to lose any money on the deal. His goal isn't to offer the cheapest housing, but the most valuable housing for the money spent. In some cases, he says, the his prices were drastically lower than they had been. In others, Westar raised the bottom line. 

 

Full interview with Bob Best, CEO, Westar Associates

Homes away from homes

During their time at USC, most undergraduate students move at least two or three times. As freshmen, students are urged by the university to live in USC-owned housing either on campus or off. But such arrangements only accommodate around 6,500 people, and the annual housing lottery favors younger students. That means many USC students are turning to private landlords as early as sophomore year. And, as one might expect, inexperienced college kids and money-hungry landlords don't always mix. 

From JOUR309 final

Above: Ground floor retail at Westar's Tuscany Complex

Landlord problems are nothing new to Kevin Brashear, a junior and a Tuscany resident of two years. He lived in the USC-owned Radisson his first year, but when his housing lottery number yielded unsatisfactory results in spring 2007, he decided to move into a three-bedroom off-campus apartment with five of his friends. 

"I think it's not as fair," Brashear said. "But I think [Tuscany] is one of the exceptions. What used to be Conquest was sort of a price gouger, and it was a good product but it wasn't worth the price."

In spite of his negative experience, Brashear, along with many other students, says he'd like to see more private development close to campus. 

"I think it will be better for the student to have more options," he said. 

 Full Interview with Kevin Brashear, USC Junior, Aerospace Engineering

Nearing the end of her freshman year, Kate Mather, now a Sophomore, faced a similar situation to Brashear's. But instead of moving into private housing, she decided to spend another year with TrojanHousing at the university-owned apartment complex, Troy East, located on Royal Street just north of campus. Mather said she has been satisfied with her experience on the whole, if not impressed by it.

"The furniture isn't the best, the appliances aren't the best, but Troy East is pretty cheap to live in and it's spacious," Mather said. "So for sophomore year it's not that bad." 

But Mather's contract with TrojanHousing will expire in May, and her sophomore status has made finding USC-owned housing for next year difficult. So she has made arrangements to rent a room in a building on 30th Street owned by Nupac Apartments, which owns 12 properties around campus. She is optimistic about the move, but says she doesn't expect her new landlord to match USC's high management standards.

"I don't foresee my landlord or my maintenance people fixing my problems the day after I report them," she said. "That will probably be the biggest thing." 

Full Interview with Kate Mather, Sophomore, Print Journalism

Sidebar: Why bring your business to a university campus?

Anyone who has ever lived near a college campus knows that, for college students, partying is a way of life. During the course of a lease cycle, students are much more likely to be difficult, costly tenants. So why, then, would a developer invest in student housing? As it turns out, the answer to that question depends on where you are.

The City of Los Angeles abides by one of the most stringent rent control codes in the United States. If a tenant remains in the same unit, in most cases, the landlord's ability to raise rent from year to year is very limited. As Jim Clarke, Executive Director at the Apartment Association of Greater Los Angeles, points out, this problem is essentially nonexistent in the student housing sector. 

"Because LA is subject to rent control, the upside would be that students are vacating more often," Clarke said. "When a unit is vacated, it is decontrolled and you can raise the price to fair market value." 

Clarke noted the few obvious downsides to competing for student tenants, but said that overall, student housing as a business has been trending upward for years.

Full interview with Jim Clarke, Executive Director, AAGLA