The past decade can be considered nothing less than a miraculous one in human innovation. More ideas and products have been realised than any decade before, with greater flows of people, goods, and services between cities, countries and continents. In this new, global world-order, life goals and work preferences are changing too. And that is where cities have to adapt as well. Have you ever thought what makes ‘cities rule the world’? No longer are urban regions economically competitive just because of a strong industrial sector, or because of an international (air)port. In today’s post-industrial economy, it’s now the ability to aggregate human capital that defines successful cities.
The bigger picture
The case for attracting international talent is clear. International students in Europe have a direct economic of 24.000 euro a year, when we add up cost of attendance, living and daily spendings. But that impact starts to multiply when they stay after graduation as full-fledged young professionals. Countries like Canada and Australia present success stories with high retention rates as a result of progressive visa policies.
In this era of global higher education, demand for hybrid living spaces continues to rise. Mobile students have driven strong demand for purpose-built student accommodation (PBSA) and this trend is long term, with the OECD projecting mobile students to reach 8 million worldwide by 2020. In parallel, global student housing investment volumes have risen 87% in the last five years. While demand for international higher education continues to rise, regions like Europe have seen strong PBSA transactions (up 29% year-on-year to €13.6 billion in 2017).
Students are not alone in disrupting traditional notions of PBSA. Investors and operators blurring old lines between ‘what’ and ‘how’ to optimize urban living, reimagining a hybrid residence by breaking down boundaries between student housing, hotel and short stay accommodations. With new models and new technologies, PBSA is emerging into intelligent buildings and connected communities across the globe.
Modelled on student accommodation, co-living is emerging as a natural next step for footloose talent after graduation. The co-living frenzy aggregates young professionals by curating opportunities to co-create a living community. These likeminded young adults are more likely to be single, more likely to rent, favour city living and often pursue temporary jobs. Obviously, some of these drivers are interdependent and one should be mindful about the accessibility of such concepts.
Analysis shows that purpose built living concepts have strong anti-cyclical characteristics, but the coming years will show shock proof the market really is. Global geopolitics are an obvious concern. Enrolment is shrinking at many American colleges and applications to go to university in the UK this autumn are down by 11,000. One can only contemplate on how Brexit will reconfigure the talent geography of Europe, as it shifts international mobility from the UK towards Europe. These concerns are amplified by skyrocketing cost of attendance for Anglo-American higher education. Rightfully young adults are questioning the value for money and consider better options outside the UK and US.
Student accommodation and co-living spaces have the potential to fulfil two types of popular demand. Firstly, they can be the key for cities to attract and retain the mobile bright minds they so desperately need. Secondly, they accommodate a footloose GenY to live the life they like: flexible, international and experience led. For these new living models to really be leveraged as petri-dishes for innovative cities, changes in urban development need to be supported. Local and regional governments can fast-track investment and development of these spaces by:
- Fitting zoning to mixed-use building typologies which are hybrids of residential, office, hospitality and commercial.
- Re-regulating the private residential market for students for short-stay needs.
- Prioritising the urban campus model to blend living / working / learning spaces and maximize the impact of talent on cities.
- Committing to an ambitious vision for academic internationalisation and promote talent retention through stay-back visas.
Across Europe, universities are being promoted as agents of urban innovation because they can generate economic activity and produce skilled localised workforces to power the knowledge economy. When making plans to ”Engage the Future” it’s clear that cultivation of the ultimate urban living models is the only way to make talent stick to cities.Don’t miss MIPIM this March!