Core Spaces, a national developer of luxury student housing, is making its first foray into affordable student housing through a proposed building on State Street called Oliv Madison, but its model is raising questions among neighborhood residents and affordable housing experts.
Final plans for Oliv Madison are still in the works. But during a recent neighborhood meeting, some expressed frustration that the development team has been vague about important details as the project has progressed.
One of the chief concerns is around the amount of affordable living space Oliv Madison would provide. In fact, Core Spaces representatives are not using the word “affordable” but the word “equitable” to describe the reduced-rent beds they will offer.
“We’ve been told not to use affordability as a word,” Mark Goehausen, senior development manager at Core Spaces, said of early discussions around the discounted beds. “We feel equitable is a good word in terms of making this product available to students who otherwise wouldn’t be able to live in something this nice or downtown. So we’ve chosen the word equitable based on feedback that we should not use the word affordable.”
All of the rentals will be made available on a by-the-bed basis. Each bed is essentially its own lease. So in a four-bedroom unit, there would be four separate leases, according to Goehausen. This model also enables a person receiving an equitable bed to remain anonymous, as the other roommates would not know that person is on a reduced rate.
The unit mix has not been finalized yet. But in another of Core Spaces’ student housing developments in Madison, The James at 432 W. Gorham St., beds can be rented from efficiencies all the way up to five-bedroom units.
The early plan is to have 10% of the beds in the Oliv (expected to have approximately 1,100 beds total) available at a discounted rate. The approximately 110 equitable beds will be available across all unit types in the building. The equitable beds will be available at a 30% discount of the average Oliv rent, which is expected to be somewhere in the vicinity of $1,040.
Therefore, a discounted bed could be rented at the average price of $740, according to a presentation by the Core Spaces team at the Campus Area Neighborhood Association meeting late last week.
“They will have the same finishes, furniture and access to amenities as any other units,” Goehausen said.
The application process would be discreet, according to the development team and members of the Office of Student Financial Aid at UW-Madison present on the recent Zoom meeting.
A prospective student who is receiving financial aid and wishes to rent a bed at the Oliv would go to the UW financial aid office and ask for a letter of verification. That letter would then be given to Core Spaces which could approve the student receiving an equitable, or discounted, bed.
Core Spaces will sign a memorandum of understanding with the university and the city of Madison that will lay out exactly what the affordability aspect is and ensure that Oliv Madison continues to fill affordable beds and preserves the affordability aspect.
But some residents were skeptical about parts of the plan. Some questioned the need for affordable student housing when widespread lack of affordable housing options is so prevalent in Madison. Some even wondered if non-students could live in Oliv Madison and take advantage of the affordable beds.
The development team, however, emphasized that any affordable beds will be strictly for students and that, while it’s technically illegal to refuse rent to non-students, Oliv Madison will be a student housing building.
“This program is focused on assisting students,” said Brian Munson, principal urban designer at Vandewalle & Associates. “One project can’t solve it all. The focus for the affordability is on assisting students who haven’t had an opportunity.”
Core Spaces hopes to finalize its plans for the Oliv Madison proposal over the next several weeks. The next steps are to present the proposal to the city and go through a formal process involving the Plan Commission and City Council, which the development team hopes to achieve by the end of the summer.
But Campus Area Neighborhood Association president Amol Goyal, speaking at the neighborhood meeting, said that Core Spaces has a lot to refine in the project before he would support it.
“I’m skeptical of the proposal so far,” Goyal said. “These numbers seem so arbitrary and I feel like you can do so much more to offer equitable housing to people in the student community. There’s so much more discussion that needs to be had before I can support it.”
Goyal was concerned that 10% of the beds being equitable was not enough and that the thousand dollar-rent for the non-equitable beds was also too expensive.
Munson and Goehausen said that they have considered the possibility of making 20% of the beds affordable, but that would require them to offer a smaller discount.
The district’s alder, Mike Verveer, was the one who originally approached Core Spaces with the idea of including affordability.
Core Spaces is seeking city approval for two additional stories beyond the allowed building height for this building.
Verveer told the Cap Times in an interview earlier this year that he told Core Spaces representatives that the only way he could see the additional height being approved was if there was some aspect of affordability.
At the neighborhood meeting, Verveer took a wait-and-see approach as to whether or not he will lend his support.
“Do I support this or is there a quid pro quo on my part? It’s too early to say how I feel about this proposal,” Verveer said. “Obviously the steering committee process is critical. Your recommendation will weigh heavily on how I come down on this issue.”
The steering committee, a group of residents charged with reviewing the proposal, meeting with the development team and keeping the neighborhood up to date, has had two meetings about the proposal. The steering committee is co-chaired by Goyal along with Capital Neighborhoods’ Miffland neighborhood chair Tim Kamps.
The steering committee will meet a number of times before deciding whether to support the project and then will submit a report to the Plan Commission.