The Journal of College and University Student Housing - Volume 43, No. 2 - 76

Kevin R. McClure * James M. DeVita * Andrew J. Ryder

bonds to finance construction. Funds from
the bonds are used to also pay the developer
a fee, which covers a suite of services, including hiring contractors, managing construction,
and delivering the final product. Student fees
or rent are first used to service the debt, after
which they go to the institution for operating
revenue, or reinvestment. In the third model,
equity financing, an institution and the developer jointly own the new housing facility and
share risk in the venture. An institution either
leases land or a building to the developer in
exchange for an equity stake in the housing facility. The developer finances the remainder of
the project and assumes all of the construction
risk. Although the majority of the revenues
from student fees or rent go to the developer,
the institution receives a percentage based on
its equity share. Equity financing has become
an increasingly prevalent model due to restrictions on institutions' ability to issue bonds to
finance new construction. In other words, the
aforementioned state policies restricting institutions from issuing bonds to borrow money
meant that many housing departments needed
an alternative route to secure capital to undertake construction projects. Equity financing
also become popular because of the involvement of real estate investment trusts, such as
American Campus Communities and Education Realty Trust (EdR), which are companies
that own and operate income-generating real
estate. Many of these companies earn profit by
financing construction of new student housing
facilities in exchange for equity (or ownership
interest) in the venture.
Selecting the model that best fits an institution's needs often depends on how much
risk the institution is willing to assume and

how much control over the facility it wants to
exercise. Bernstein (2010) suggested that the
"learning curve" for many institutions entering into partnerships with developers centered
on "the type of deal structure most appropriate
for the project," which is "closely followed by
the particular set of controls that the institution should seek to maintain over the life of
that project" (para. 2). For developers, one advantage of PPPs is mitigation of risk, as they
are granted favorable locations on or near
campus that ensure reliable demand for the
housing they are financing (Bernstein, 2010),
making PPPs reliably profitable (Sanseviro
2010). While institutions clearly see advantages in partnering with private developers, the
literature also identified a range of disadvantages. Table 1 presents a list of advantages and
disadvantages that frequently appear in the literature on PPPs in college student housing.

METHODS
This study is framed as a multi-site case study
of three public research universities intentionally selected as cases for insights they could
provide about the phenomenon of PPPs. Case
study methods guided our approach for prolonged engagement at each site with multiple
stakeholders (Stake, 1995; Yin, 2014). The following research questions informed the study
and framed our data collection methods:
1. What conditions gave rise to PPPs in college
student housing?
2. What are the structures and main outcomes
of PPPs in college student housing?
Data were collected at three research-extensive,
public universities, two of which are the flagship institution in their respective states. Each
researcher led data collection efforts at one of

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