It's Not Just Institutions Driving the Amenities Arms Race: Meet American Campus Communities

Many higher education institutions have received critical scrutiny for building luxury resident halls, student centers, and recreational facilities. Some observers have argued that institutions compete with one another to attract students through these buildings and services in what higher education scholars call the "amenities arms race." A careful study of spending in higher education reveals that climbing walls and swimming pools are easy targets for critics looking to confirm widespread allegations that colleges and universities are wasteful and drive up prices that students and their families pay for higher education.

Some of this critique is warranted. However, in a common theme that runs throughout popular portrayals of education issues in America, a major player in the amenities boom is missing in the conversation: the private sector. A whole range of companies are cashing in on the college student market, with little regard for how their products encourage frivolous spending and increase the price of attending college. You may say these costs do not matter because they are outside the tuition that students must pay. I would counter this thinking by arguing that: 1) many of the services offered by institutions that are condemned for costliness do not factor into tuition; and 2) with this in mind, we should always think about the price of attending college in broad terms, encompassing tuition, as well as fees, books, as well as discretionary spending.

One of the companies that is a major force in the higher education landscape (physically and figuratively) is American Campus Communities (ACC). You may not have heard of ACC, but you've likely seen their products if you've spent any time on a college campus recently. Launched in 1996 by a former resident assistant, ACC has developed $4.2 billion in properties and $4.6 billion student housing assets. They own and operate their own buildings off campus, but also work with colleges in public-private partnerships to manage or develop specified housing facilities. In 2004, they became the first publicly traded student housing real estate and investment trust (REIT). Their buildings grace the campuses of the University of New Mexico, Princeton University, Portland State University, Arizona State University, and the University of South Florida, to name a few examples.

Vista del Sol Apartments in Tempe, AZ

ACC does not specialize in run-of-the-mill dormitories. You won't find cinder block rooms, rickety furniture, and communal, bleach soaked bathrooms in their Vista del Sol property or Casas del Rio property. These are luxury residence halls that cater to the consumer demands of the Millennial generation. In fact, it would be difficult at first glance to even determine that ACC buildings are, in fact, designed for college students. They look more like resorts, complete with swimming pools, high-end fitness centers, and movie theaters. Rather than being criticized for opulence, ACC is praised for its profitability and sustained, recession-proof growth. It has been regularly named a company to watch and its stock has several times been pinpointed as a smart investment. In other words, when a private company creates expensive amenities to compete in the lucrative college student market, they are viewed as forward-thinking and entrepreneurial, not symbols of a system spinning out of control as it strives for prestige.

The double standards are less concerning than the presence of companies like ACC (there are many others) on campuses and the influence they exert. As privately constructed buildings infiltrate a university space, public or quasi-publicly-funded and operated buildings must change to keep pace. The amenities arms race, in other words, is not just a product of institutions competing with one another. It is also a product of competition created by companies like ACC building on and around campuses nationwide. Before long, luxury student housing becomes normalized, such that students and parents feel like it is the most acceptable option. A family could certainly look into less expensive options, but they fail to capture the imagination, communicate a sense of comfort, and convey status quite like a resort-esque apartment complex. And if so many others can afford it, they reason, so can we. The normalization of spending in higher education is not something that has been systematically studied, but there is reason to further explore the ways in which companies like ACC do not simply respond to consumer demand--they create demand where it previously did not exist.

The Varsity, an ACC property down the street from my house in College Park, MD

 The costs of living in these buildings adds to the rising tuition burden at many institutions. While it is true that institutions themselves have increased student fees to pay for services and facilities, and many have built their fair share of lazy rivers and Mongolian barbecues in partnership with companies, we should not ignore the private sector. Many, many companies are profiting as students fall further into debt. And while we can express outrage at institutions, at least the non-profit ones are investing the money they earn back into an enterprise ostensibly dedicated to further education. The same cannot be said of a company like ACC, where profits go shareholders.