Dartmouth College has launched an ambitious initiative to build new housing for up to 1,000 students, faculty and staff members over the next decade, in a move some hope will help relieve, at least a little bit, the ongoing housing crunch in the Upper Valley region of New Hampshire.

The Ivy League school recently broke ground on a new “apartment-style” residence building in Hanover that’s expected to house up to 285 undergraduate students in coming years.

The new “Russo Hall” – which was made possible by a $30 million gift from alumni Thomas and Gina Russo – is Dartmouth’s first newly constructed undergraduate housing project in 20 years.

And it won’t be the last.

Next year, Dartmouth is expected to file plans for yet another undergraduate residential building, located in the same area as the new Russo Hall, or on the southwest side of the campus on recently acquired land. Earlier this year, Dartmouth purchased four parcels on West Wheelock Street in Hanover to make way for new residential facilities.

Meredith Christensen, senior director of special projects at Dartmouth, said final details for the second undergraduate housing project are still being ironed out, but it’s expected to be roughly the same size as Russo Hall, perhaps slightly larger.

In all, Dartmouth has said its long-term plan is to invest $500 million in undergraduate housing, for both the renovation of existing dorm buildings and the construction of new facilities.

There are no specific plans for other housing projects beyond the two undergrad residential halls planned for West Wheelock Street. But Dartmouth is “very much” looking at new housing for faculty and staff members as well, Christensen said.

The school wants to provide housing for non-student Dartmouth employees, she said, many of whom are finding it difficult to secure affordable housing in the increasingly expensive Upper Valley area.

“We are committed to it,” Christensen said.

Projects Will Be Self-Financed

Dartmouth’s overall 10-year goal: construction of enough new housing, within “apartment-style” facilities, for about 1,000 students, faculty and staff members.

The university plans to self-finance the future projects from a variety of school sources, including new fundraising initiatives, Christensen said.

A number of factors are driving Dartmouth’s current push to build new housing, including pressure from students for more residential options on or near campus.

In addition, Dartmouth is currently undertaking a new “dorm renewal” initiate to upgrade its older dormitory buildings on campus – projects that are temporarily displacing many students while renovation work in under way. The new residence halls are expected to house some of those displaced students in the short term.

But there’s another reason for Dartmouth’s aggressive new-building push: the entire Hanover-Lebanon area is facing a housing shortage that’s driving up home prices and making the entire area unaffordable for many residents.

Specifically, there’s an acute workforce housing shortage that’s made it difficult for large area employers, including Dartmouth College, to retain and attract employees, area officials say.

Zoning Change Unlocks Potential

Robert Houseman, the town manager for Hanover, said there’s expected to be a shortage of 10,000 homes in the Upper Valley by 2030, putting added pressure on the already high housing prices in the region.

As of the third quarter, the median year-to-date price of a single-family home in Grafton County was $485,000, up 9.3 percent compared the same period in 2023, according to data from the Warren Group, the real estate data analytics firm and publisher of The Registry Review.

Indeed, median home prices have increased at a double-digit percentage clip in each of the past four years in Grafton County, data shows.

“We’re in need of more housing,” said Houseman. “Not just from Dartmouth. But more housing in general.”

As a result, the town of Hanover recently approved a number of zoning changes to encourage new housing construction, such as new building height limits in Hanover’s downtown area, Houseman said.

As for Dartmouth, the town changed zoning in the West Wheelock area so the college can build new apartment-style facilities that can house students, faculty, staff members or anyone else.

Ultimately, the goal is to keep college personnel as close to the main Dartmouth campus as possible, reducing area traffic and lessening the demand for housing elsewhere in Hanover, Houseman said.

In the case of the new Russo Hall, it will have about 80 apartment-style units, ranging from two to four bedrooms, according to Christensen.

No matter who lives in Dartmouth’s future residential facilities, the new units will add desperately needed housing stock to the entire region, said Tracy Hutchins, president of the Upper Valley Business Alliance, a regional chamber of commerce.

“It’s a welcome development,” said Hutchins. “We need more workforce housing in general in the area. Many employees are trying to hire people – and they’re finding it particularly hard if people have to relocate here.”

Dartmouth’s push for new residential units won’t solve the overall housing shortage in the Upper Valley, but it should “relieve some of the pressure,” Hutchins said.

Investor Opportunity at Elite Schools

Across New England and the entire country, other towns and cities with large student populations have been encouraging higher-ed institutions to build more campus housing, as part of an effort to get students out of off-campus rental units in nearby neighborhoods.

Boston’s late Mayor Thomas Menino famously pressured schools such as Boston University, Northeastern University and Emerson College to build new dorms – and they responded with construction of thousands of new units in the early 2000s.

But even as late as 2018, Menino’s immediate successor as mayor, Marty Walsh, was still calling for construction of 18,000 new dorm units in Boston, according to published reports.

Some private developers have taken it upon themselves to build more housing for college students, with or without the direct cooperation of colleges.

Teddy Leatherman, who leads the Dallas branch of the National Student Housing Capital Markets business at JLL Capital Markets, said developers are simply responding to market forces.

Smaller colleges may be seeing a decline in student enrollments of late, due to demographic trends in the U.S.

But enrollments at elite and large colleges are holding steady or increasing – and so demand for new student housing, on and off campuses, remains strong in many markets, she said.

Student housing is attractive to investors and developers for a number of reasons, said Leatherman, whose JLL unit helps arrange financing for student-housing ventures.

First, it’s ultimately credit-worthy parents, not students, who are paying for student-housing leases, making revenue streams more reliable, she said.

Second, college student-housing is largely recession resilient. If anything, higher-ed enrollments tend to increase during economically turbulent times, Leatherman said.

“Investors love it,” Leatherman of the overall attraction of student-housing developments.

Dartmouth’s Christensen said her university opted to forgo partnering with private student-housing developers because it wanted to retain full control of the facilities after they’re built.

“We view them as institutional, 100-year buildings for us,” she said.