Student Housing

Our Year In Review
If we could only limit our reporting to the first quarter of 2020, the 2020 financial year could have been an extremely successful year. Not one but two projects for the creation of much-needed, additional living space for students took very positive shape:

• The occupation of the dormitory at Maximilianstraße 34, together with ALDI, with 65 modern and very well-equipped dormitory places, gave rise to hopes of occupation at the turn of the year 20/21,
• The administrative council gave us the green light for the building project in Paul-von-Denis-Strasse in Landau, projected at approx. 10 million euros, with planned 110 dormitory places. The purchase contract for the land has already been drawn up with the city.

Unfortunately, however, the year had three more quarters. Basically, 2020 is reduceable to two simple formulas, which we had to learn painfully:
Digital students in lock-down do not rent dorm rooms and, a crisis is only an opportunity if you can at least foresee how long it will last and what will happen afterwards. Otherwise, all that remains is planning uncertainty, which is probably the key word for our business year in student housing.

Projects that improve the housing situation in the long term had to wait. In 2020, it was simply not yet possible to judge whether the student housing market at our locations would ever regain its former strength. It was unclear how strongly and for how long the "digital university" would shape the image of the university future. From a planning perspective, 2020 is therefore a lost year for us. It is frustrating that attractive projects such as the construction of the new hall of residence in Landau's Paul-von-Denis-Straße could not be pursued.

Digital Initiative
On a positive note, we have strongly advanced the digital equipping of our halls of residence. As of the 31st December of 2020, the Wi-Fi equipment of the dormitory in Ludwigshafen with 174 residents was completely finished. The installation of a gigabit switch tripled the performance. In Germersheim, the equipment in one of three dormitory buildings was also completed and is currently being continued. Our halls of residence in Landau and Worms will have their turn in 2021.
We want to raise the WLAN equipment for all - with the new ALDI dormitory - 970 places to a new level. In our opinion, a very good and stable internet connection is becoming increasingly important for students. Also in view of the fact that the proportion of digital teaching and digital offerings, such as lectures in live stream, will certainly be greater than before the pandemic.

Vacancy unavoidable
Despite extensive, creative and far-reaching campaigns, and despite alternative forms of rental such as short-term leases and renting to third parties on a temporary basis, our loss of rental income could not be completely made up and the apartments could not be fully occupied. The living space designed for students can only be made accessible to other groups to a limited extent. Here, the cost of upgrading for renting to third parties was usually greater than the economic benefit. In addition, interest in renting was naturally rather low during the lock-down phases due to the lack of freedom of movement. Furthermore, renting to third parties created a competitive situation with the local hotel industry, which also tried to rent vacant rooms on a long-term basis.

Against these conceivably negative conditions, the team of the Housing Department pulled out all the stops to keep the financial losses due to vacancies as low as possible. We succeeded by extending contracts beyond the otherwise usual maximum rental period and temporarily lifting the allocation guidelines for student housing: Our loss of rent in the financial year totalled "only" several thousand euros. Still a significant decrease, considering that in normal years 4 to 5 students apply for one place in a dormitory.

More than 10.000 euros had to be invested in 2020 to upgrade our dormitories to meet hygiene guidelines and to equip all dormitories along the respective Corona guidelines. Fortunately, there have only been a few documented cases of Coronavirus among our tenants. Due to our very good hygiene concept, the residents were never exposed to an unnecessary risk of infection.

Stranded in Lockdown
The work of our dorm tutors was very important, and I must emphasise its positive aspects. Due to the regulations, many students - especially foreign students - were severely restricted in their freedom of movement because of the travel restrictions and were thrown back on the small "universe dormitory". Many national students had left the halls of residence to continue their online studies from their home towns. For the remaining residents, the dorm tutors were therefore important contacts for all worries and needs. Many students felt lonely and socially isolated. Even in the case of quarantine, the students could rely on our tutors. They took over tasks such as shopping, laundry and - supported by our communication department - Corona communication in the halls of residence. In addition, they were the contact person for students who suffered from loneliness on campus and in the halls of residence and took care of a basis of social togetherness. Not an easy task for our dorm tutors and an extraordinary challenge, but one that they have mastered very well.

Forecast
Despite the special situation, the vacancy rate in the halls of residence was kept lower than feared at the end of the summer semester 2020. In all likelihood, however, the situation will worsen vehemently when the new dormitory in Landau's Maximilianstraße with 65 dormitory places is rented out in summer semester 21. Then a vacancy rate - at least in Landau - of over 10 per cent is to be expected.

We do not believe that the situation on the student housing market will change significantly in the long term, even though the availability of digital teaching content will certainly increase. The pandemic has only accelerated the digital development of universities - a positive side effect of the pandemic. If anything, we are learning from it that we need to pay even more attention to the digital equipment of our halls of residence. We need to become faster, simpler and more secure in terms of internet provision. We do not believe that the future of successful studying lies within the Wi-Fi network of students' parents. Studying is far too important and indispensable for that, also as a time of socialisation and for building a self-determined life for young people.

We therefore very much hope to be able to resume our activities for the creation of student housing in 2021 and continue to orient ourselves towards a coverage with student housing places at the level of the state-wide average of 10 per cent. 6.63 per cent - the current average of the dormitory space ratio of all our campuses - continues to be far too low in the long term.

Unfortunately, it has become apparent - as it has been for years - that the construction of new student halls of residence with affordable rents is definitely not possible with the credit requirements of the Investitions- und Struktur Bank (ISB) of the state of Rhineland-Palatinate. Without state land given as a donation or clear financial support per newly built student dormitory place, it will not be possible to build any more student dormitory places. We have calculated this several times in various projects over the past few years.
The state of Rhineland-Palatinate must not leave student housing to private companies. Even if this can work very well - as the partnership with ALDI shows - it still cannot be the future concept of student housing. Even a "break-even point" for a private-sector investor's student housing project still generates rents that are above the usual local level. And generally, companies want to make a profit...

Conclusion
2020 has only accelerated what would have happened without the pandemic anyway: the long overdue further digitalisation of teaching at our universities. It is good to see that the universities have been able to meet the demands so well even in this crisis situation and that teaching has been able to continue.

We are firmly convinced that digitalisation - no matter how extensive - cannot and will not replace a social life on campus. Only our digital backlog became abundantly clear. However, a meaningful digitalisation of teaching content in studies will not be a substitute for the socialisation of our future leadership personnel.

Topics such as fast and uncomplicated internet in every hall of residence will increasingly come to the fore. This is a task that we are very happy to take on in our halls of residence.

As soon as our energy is no longer so tied up in dealing with the pandemic, we will once again tackle projects that create additional and affordable living space for our students. Our goal is and continues to be the 10 per cent dormitory quota at the respective campuses. But we can only achieve this with the support of the state of Rhineland-Palatinate.
We are ready...