Making a market for itself: The emergent financialization of student housing in Canada

Abstract

This paper demonstrates the infiltration of finance into increasingly niche real estate sectors, taking the example of the emergent Canadian purpose-built student accommodation (PBSA) sector since 2011. Drawing on a novel database of PBSA, qualitative document analysis, and key informant interviews, we uncover the business strategies and geographic patterns of investment in the sector. We then consider the local impacts of this phenomenon in Waterloo, Ontario, the country’s largest PBSA market, where finance-driven new-build studentification has contributed to higher housing costs and age segregation. This process of financialization has differed from other housing sectors as it depends on the creation of new student housing to provide an avenue for investment therein. At the same time, finance-driven new-build studentification functions as a spatial fix by directing investment to secondary cities. However, this process has been fragile, marked as much by failure as success, pointing to the limits of financialization.

Age Segregation, Intergenerationality, and Class Monopoly Rent in the Student Housing Submarket

“…Similar dynamics of studentification exist in these cities, but they remain much more pronounced in Waterloo, which is home to nearly half the PBSA in Canada (Revington and August 2020). While this makes it an exceptional case within Canada, it is comparable to many UK and US markets where PBSA is commonplace.…”

“…However, while the rent gap has its place in urban theory (Slater 2017), it is not the only expression of capitalism in urban space. Indeed, Revington and August (2020) demonstrate connections between PBSA construction, financialisation, and sectoral and spatial capital switching. Conceiving of studentification as the formation of a student housing submarket, meanwhile, opens the door to Harvey's (1974) theory of class monopoly rent (CMR).…”

“…I examine the role of various actors in shaping the student housing submarket in Waterloo, Canada through the lens of class monopoly rent. A mid-sized city in southwestern Ontario, Waterloo is noteworthy for its well recognised history of studentification and the largest concentration of PBSA in Canada (Charbonneau et al 2006;Revington and August 2020;). The analysis provides several contributions.…”

The emergence of a Build to Rent model: The role of narratives and discourses

“…What differentiates BTR from other dimensions of financing standard residential property, including those typically analysed through the lens of financialization, is that it was constructed, from the outset as a revenue-generating asset. In this respect it is similar to the international ascension of purpose-built student housing (PBSA) (see Revington and August, 2019). Indeed, much of the specific for-rental building over the last decade in London has been student housing, and whilst BTR mimics many of its characteristics, it was distinguished from student housing during interviews with investors because of the different amenities which need to be provided, material differences in the design of the product (studios or shared kitchens in student housing versus individual flats in BTR), potential occupiers and ultimately the scale of the market's potential.…”

Neighborhood changes as a consequence of the arrival of university students in two areas of Concepción - Chile

“…This framework analyzes economy along with its political and social context, instead of an isolated entity and with its own rules, having existed a growth recognition of the centrality of housing within an economic policy in recent years (Aalbers & Christophers, 2014). In the case of the housing market, it works as an investment niche or as a capital reserve that is revalued over time, very related to political processes such as the existence of a public housing market, subsidies for the purchase or lease, or the availability of places offered by higher education institutions themselves to provide housing for the students (Aalbers & Christophers, 2014;Revington & August, 2019). Some cases, as the Chilean one, where there is no public or institutional provision of housing for students, where the market appears as highly deregulated (Valenzuela, 2016), and where the purchase or lease of a real estate is positioned as a clear option to complement some generally low pensions, are such a good example.…”