On October 6, Valerio Fonseca, Chairman and CEO of DoveVivo S.p.A., participated in “Student Housing: Investment Asset Class?”, a round table held during the seventh edition of Urbanpromo Social Housing. The conference was hosted by Open Incet, Turin’s new open innovation center.
With four consecutive sessions dedicated to various aspects of social housing (social/collaborative housing, social housing and impact investing, student housing, and senior housing), the event embodied the momentum of an industry that is gaining strength not just as a business phenomenon, but also as a social one. In the past few years, sharing a home has become an increasingly popular lifestyle choice, with growing numbers of young people opting (and not just out of necessity) to live with roommates for longer periods of time. Yet the reality doesn’t always live up to the expectations. Why? The lingering economic crisis, its impact on families and what they can afford, and the inflexibility of a housing market which hasn’t adapted as it should.
DoveVivo’s CEO stressed two macro-themes: shared apartments and student residences.
In relation to the first category, a segment led by DoveVivo in Italy, Fonseca explained: “Today’s market is mostly driven by private enterprises, with somewhere between 650,000 and 800,000 beds for university students [the numbers vary depending on the source -Ed.]. The lack of regulation in the private sector has caused a series of issues, such as pronounced fragmentation of the market itself, scarce standardization in terms of product quality, and essentially no uniformity in terms of contractual regulation and safety standards for the units themselves. This is precisely where DoveVivo has found fertile ground for the development of an innovative, high-quality, turnkey set of products for homeowners on the one hand, and tenants - or rather (and at times most importantly), their parents - on the other.”
As for the second category, student housing, those sitting around the table (institutes, local entities, investors and asset management companies) demonstrated a willingness and desire to offer their knowledge and skills to solve an increasingly evident problem linked to the lack of housing. On the topic, Fonseca stated: “The crux of the issue boils down to the coexistence of long term, sustainable profitability for all stakeholders along the value chain, and prices that are equally sustainable over the long term for students. What’s stopping the system from finding its equilibrium is the cost of services connected to student housing, which have too much of an impact on the bottom line. These services certainly are useful, but, despite adding value to students’ quality of life, they don’t always manage to make up for the difference in the price charged on top of the rent in the purest sense of the word.”
Taking DoveVivo’s past experience as a starting point, Fonseca concluded, a good solution is to prioritize the client. That would provide a way to find new possibilities in the creation of student housing which would unite the real needs of young adults living away from home and the actual amount they are able to pay.
As a project, it certainly would be virtuous, making up for the lack of beds that are so clearly needed in the student housing market, while funneling current housing options towards a well-defined goal, particularly in social and economic terms.