Student - February 9, 2012

The ideal system

With the student population growing too fast for the housing provider to keep up with, Idealis has been an easy target over recent years. Which is not always justified, says Idealis director Hans van Medenbach. ‘You can't just say, OK, we'll put up a student residence costing ten million.'

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An explosive rise in student numbers has put a lot of pressure on the room rental market in Wageningen in recent years. But the end is in sight, if Idealis gets its way. In its new business plan, the student housing provider outlines plans to build a thousand new rooms. It is also going to introduce a new, flexible rental system.
Meanwhile, it seems as though the university and Idealis are drifting further apart: the university is planning to stop renting Idealis accommodation for foreign students and is looking for another partner for its building plans for the campus.

One thousand new rooms when only a few years ago the Rijnsteeg residence with 625 rooms was demolished... Is it hard to plan student accommodation?
‘It is not as simple as you make it sound. Let me take you back in time for a moment. From 1990 to 2005, student numbers in Wageningen fell dramatically, against the general trend. At one point there was even talk of possibly closing the university. In 2005, we had 700 empty rooms, and the university itself predicted that numbers would not grow in the years following that. It was precisely at that moment that we had to decide whether to spend 7 to 8 million euros renovating the Rijnsteeg. In that context, it was a sensible decision to demolish the complex. But then suddenly, student numbers began to shoot up, by more than 10 percent per year. Then you soon see the pressure on accommodation going up. It is very difficult for us to keep adjusting in such a situation. Investments in real estate take place on a different time scale to fluctuations in student numbers. After two years of growth you can't just say, OK, we'll just put up a student residence for the next 40 years, to the tune of 10 million. You have to weigh up demand and risks against each other.'

You don't always seem to see eye to eye with the university on this issue. The university has even started to buy and rent out property as temporary accommodation for foreign students. And for the new student residence on campus they are looking for another partner - not Idealis. Are you still on speaking terms actually?
‘Yes we are. Relations are better than they were a year ago. Then there was tension about the sale of land. We were keen to build for the growing student population, but as a social housing corporation we could not afford the astronomical prices that were being asked for land at the time. The university had a lot of land for sale itself, because of the move to campus. We said, if we could buy a small percentage of that for a reasonable price, we could get going. But we drew a blank. Go and talk to a developer, was the reply. With good reason, perhaps - like the university needing money for its new building plans. I can't see into the university's purse. But whatever the case, our hands were still tied. And meanwhile, they were going on recruiting foreign students, which put pressure on the accommodation market. The university responded to that by buying up and renting out properties for temporary housing. Strikes me as an extremely pricy solution to a problem we could have prevented by doing a bit of extra building, but that was their choice.'

From Idealis's plans, it seems as though there are big projects in the offing again.
‘Yes, that is thanks to the economic crisis. Land prices have plummeted because commercial projects are pretty much at a standstill. Student housing was always last in the line for in the real estate sector, but now we are really the only party that is still investing in it at all. And so we can suddenly buy up first-class sites in the city which were always out of our reach before. And they do indeed take priority for us over building on campus. Why? Firstly, in order to spread the risks. If student numbers fall again, small-scale complexes in the centre could be used for other target groups such as older people or singles. That way you can avoid a repeat of the Rijnsteeg demolition. Secondly, this is what our target group wants. Many of the older students and PhD students prefer to live in the town centre and at the moment only about 5 percent of our rooms are there. Whereas we actually already have quite a lot of rooms around the edge of the campus: Bornsesteeg, Dijkgraaf, Hoevestein. Even Droevendaal is practically on the campus.
It's fine by me that the university is considering going into business with another partner there. There is no need for us to be the only party on the housing market. As long as we keep each other informed in good time, and dovetail our building plans. Because then maybe we can scrap some of the projects on our list.'

The university is still renting 1,200 rooms from Idealis for foreign students. What is going to happen to them?
‘Wageningen UR has indicated that it wants to stop doing that at the end of this contract period, on 1 January 2016. The argument is that having empty rooms on its hands is too expensive and that the university wants to abandon the room guarantee on such a large scale. I don't entirely understand that, given that Idealis covers most of the costs. From a business point of view, at least, I find it incomprehensible that the university wants to get rid of a rent agreement with what I can safely describe as the most favourable conditions in the Netherlands. But here again, no doubt Wageningen UR has reasons of its own, of which I am not always aware. The advantage of this for Idealis is that it gives us the chance to introduce a new rental system.'

And what is the new rental system precisely?
‘In practice we often run into the problem of matching demand with supply. We have put all our target groups in neat boxes, à la the 1970s. There are rooms for first-years, for foreign students, and for PhD students, all with their own characteristics: simple for one group, more luxurious for the other, furnished for a third. We get a lot of criticism for this, so we are going to change it over the next five years. Soon everyone will be able to choose a complex, a room, and possibly furniture, on our website. It will be first come, first served. So a first-year from Uganda also has the option of going for a luxury apartment, if he can pay the rent. While a Dutch PhD student on a limited budget can opt for a smaller room on a corridor. There will be no distinction between courses of studies or nationalities. We are going to introduce this step by step in the coming years, with 2016 as the final changeover date.'

Will this mean the end of the ‘campsite student' who has become a feature of the start of the academic year?
‘I am not promising that. We will never have the capacity to completely absorb demand at that peak arrival time. The problem is that the arrivals are all within one month, whereas departures are spread over the whole year. If you build so many rooms that you can even absorb the peak demand, it means empty rooms over the rest of the year, with higher rents to make up for that. No one wants that. But more than a thousand new rooms over the next five years does constitute a considerable expansion. Our capacity will be fairly well balanced with the real demand. I think we will be able to offer both students and the university an excellent starting point this way.'

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