The neighborhoods around LSU are in the middle of an unprecedented apartment construction boom that developers and real estate experts say is being fueled, in part, by the TOPS scholarship program.
Since 2007, more than 2,400 apartment units have been completed in the areas around LSU, said Wesley Moore, of Cook, Moore and Associates, a longtime tracker of the Baton Rouge apartment market. That figure includes 786 units that opened in 2015 around the start of the fall semester.
Another 663 units are in the pipeline, with developers getting permits or buying the land needed for the apartments. “These are all being built by solid, capable developers, so I expect they will come to market,” Moore said.
The apartment building boom is being driven by rising enrollment at LSU. In fall 2010, there were just under 28,000 students attending the university, a low point following the years of attendance swollen by students displaced by Hurricane Katrina after 2005. In fall 2015, more than 31,500 students were attending the school, the second year in a row enrollment had risen 2 percent.
The state-funded Taylor Opportunity Program for Students has been one of the factors in boosting LSU’s enrollment because the scholarships cover tuition costs for qualifying Louisiana high school graduates. Moore said the program has worked alongside the rising enrollment standards at the state’s flagship university.
“When LSU increased admission standards, it made it more exclusive of a club that more people want to get in,” he said. “And if you have tuition covered for all of the universities in Louisiana, it makes sense that students would want to go to the one it’s harder to get into.”
Wes Rogers, chief executive officer of Landmark Properties Inc., said TOPS was something that was considered before building The Standard at Baton Rouge, a $50.6 million complex that opened during the summer. The 287-unit complex takes up a 4.5-acre block bordered by West Chimes, Aster, Iowa and Alaska streets.
Rogers said TOPS was not the biggest determining factor in Athens, Georgia-based Landmark going ahead with The Standard. “Students have more disposable income, so they can pay more in rents,” he said. “The rents are a little higher than they would be if not for TOPS.”
In October, Landmark sold the complex to University House Communities for $108.6 million, or just over $378,000 per apartment. Moore said that was a record per-unit price. The apartments have been rebranded as University House Baton Rouge.
Emily Prevost is director of marketing for The Dinerstein Companies, the Houston firm that owns Sterling Burbank, a 235-unit development that also opened during the summer. Prevost said her company looks at enrollment numbers before proceeding with a development. Dinerstein also developed Sterling Northgate, a 206-unit complex near the intersection of Highland Road and West State Street.
“If enrollment is increasing because of TOPS, it’s definitely going to affect where we are building,” Prevost said.
Brian Dantin, who, along with business partner Ross Bruce, developed The 333 Flats, a condominium complex on East Boyd Street, just outside the South Gates of LSU, said TOPS is a factor in apartment construction. Dantin and Bruce sold a 1.5-acre site for nearly $5 million in May to Park7 Group. The New York-based company plans to build a 280-unit complex at West Parker Boulevard and Dodson Avenue.
“It definitely allows the apartment and condo market to thrive,” Dantin said. “People have a lot more to spend on rent.” Dantin said he hasn’t heard people directly say they have more money to spend on their son or daughter’s apartment because of TOPS, but it “makes sense.”
The new apartment developments, like University House and Sterling Burbank, feature a host of amenities, from lazy rivers winding around the complex to common areas featuring large HDTV sets.
Moore notes that the high end for rents at complexes like University House or Sterling Burbank start at about $2.25 per square foot. Rents at some of the luxury apartments downtown, like at the 525 Lafayette complex next to the IBM Building, are slightly more than $2 per square foot.
However, Moore said comparing rental rates between the LSU area and downtown is difficult. Downtown residents have to pay for parking spaces because land is limited. That’s not the case around LSU. And at some complexes, utilities are included in the cost of rent, while other places require the tenants to pay for electricity, water, sewerage, cable and Internet.
The biggest impact from TOPS on the LSU apartment market comes from students in metro Baton Rouge, who end up renting an apartment with the money their parents are saving on tuition, instead of living at home and commuting to school. After all, Moore said, students from Shreveport or Lake Charles will end up renting an apartment or living in on-campus housing anyway.
TOPS affected what Moore did when his daughter enrolled at LSU.
“My daughter had a bedroom in the house she could have stayed in, but she qualified for TOPS,” he said. “So I readily rewarded her with an option of moving closer to campus.” Moore said he felt safer with his daughter being so close to campus and not having to frequently drive on the interstate. “It was very easy for me to rationalize it, and I’m probably not the only parent.”
Follow Timothy Boone on Twitter, @TCB_TheAdvocate .