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Proposed student housing could shift rental market, lower rents for non-students

By KURT CHRISTIAN - (Bloomington) Herald-Times

If one theory proves true, a proposed 630-bedroom student housing complex on Bloomington’s east side could effectively create more non-student housing.

Fountain Residential Partners, a boutique student housing development firm based out of Dallas, Texas, is looking to fill in the southwest corner of East Third Street and Ind. 446 with student housing. Allowed just 50 multi-family units, the petitioner is asking the Bloomington Plan Commission to permit as many as 250 units on a lot that’s been vacant for more than 40 years and wraps around Century Village.

“The truth is, if it’s built, they’re going to drive somebody else out of the student housing business. That’s the best way to get more housing,” commission President Joe Hoffmann said.

Hoffmann said new student complexes can drive older student housing properties out of business. If those older complexes can be transitioned into housing for non-students, the supply will rise and the cost of housing throughout the city will drop.

Ultimately, the 14-acre project would bring more than a dozen three- and four-story apartment buildings and townhomes to the city’s eastern corridor. If approved, the project could feature 60 efficiency units, 24 one-bedroom apartments, 108 four-bedroom townhomes and 29 four-bedroom apartments.

First, though, the petitioner is looking to alter the way the land is zoned to allow for first-floor residential units, additional commercial uses and more density.

Trevor Tollett, vice president of Fountain Residential Partners, said that demand for student housing brought his firm to Bloomington. Even so, other large-scale student housing projects like the more than 740-bedroom Evolve project near Memorial Stadium have a higher density than his proposal.

“We really found the majority of the new student housing being built is based on the top 10 percent that can afford $1,000 a bed,” Tollett said. “What we’ve found is there’s a really high demand for a quality project with a moderate price point, albeit a mile and a half from campus.”

When the public and commission members pressed to hear those moderate price points, Tollett said he believed efficiency units might cost around $950 per month. One-bedroom units could cost $1,080 and the townhomes might rent for around $700 per bed.

Tollett said those prices are, on average, about $300 less than comparable student housing complexes.

Neighbors Sherry Knighton-Schwandt and Thomas Schwandt called for empirical evidence that there’s even a need for more student housing, and therefore, the additional traffic generated by more students driving to and from campus.

The project’s proposed 480 parking spaces – equal to 76 percent of bedrooms having a parking space – may increase to allow 85 percent of tenants to have a spot.

Ongoing discussions with Bloomington Transit about a potential bus stop on the property may alleviate some of those traffic concerns, but Hoffmann said student housing complexes built more than a couple miles away from campus have caused traffic jams along East Third Street.

“I am very skeptical about whether this proposal is the kind of higher density and higher intensity that should go in this particular location,” Hoffmann said.

Since the request is to amend the property’s zoning, Hoffmann said he wanted to make it clear that the commission has the discretion to deny the project simply if they feel it doesn’t fit the community. The commission unanimously forwarded the request to its Aug. 13 meeting.

“Bloomington needs more housing and more affordable housing,” commission member Susan Sandberg said. “To get there, we have to allow the development of housing.”