Housing and the Vertical Health Campus

It’s my favorite local example of inwardly connected campus-ization, a phenomenon becoming commonplace as health security dominates real estate development consciousness.

Campus-ization is inevitable any time a large institution’s location has irreproducible structural advantages or its built environment is too valuable to abandon. Now that any pre-COVID high-density urban institutional structure is perceived to be a health-insecure 1.0 configuration, it must become a health-secure 2.0 environment forthwith – lest its value proposition vanish, and its business model implode.

Small wonder, then, that the drive to innovate health-secure environments is being led not by risk-averse governments but rather by march-or-die private institutions in the 4+1 industries of sustainable jobs:

• Education, as universities need students on-campus to maintain brand value in the face of globalizable remote learning;
• High-technology, as companies beg, coax and wheedle employees back to their desks;
• Health care, as hospitals compete to attract the affluent injured, aged or ill;
• Government, as municipalities face pushback by their essential servicer workers’ rank and file; and
• Leisure, so that arriving visitors are swiftly captured, whisked to the adult-playground campus (casino, resort or cruise megaship), and cocooned until it’s time to fly home.

Like MIT, these growing job creators started small in real estate, grew horizontally with little strategic plan and, at some point, campus-ized. When the apex institution becomes dominant in its local vicinity, it establishes the equivalent of its own private business improvement district to embrace the full perimeter of its real estate operations.

Being the legal owner of that land, and the monopsony employer of the economy atop that land, the institution arrogates to itself governance functions. The institution imposes its own on-campus parking and traffic regulations; its own vaccination or testing mandates; its own identity checks (keycards); its own monitoring and privacy rules; its own free-to-everybody WiFi; its own security (campus police); and its own enforcements, the most powerful being expulsion from campus. Such benevolent autocracy is possible only because everyone on campus has chosen to be there – by voluntary employment or by voluntary consumption. Either way, access to the campus is obtained only by applying for admission; there is no untrammeled rite of entry.

Any growing campus-based institution will expand with patient pouncing opportunism, grabbing any contiguous or near-contiguous parcel on which it can get its organizational mitts, then slowly enmeshing it. Building by building the campus grows; it complexifies; and it becomes more self-absorbed – which means a strong imperative for more on-campus or near-campus affordable housing.

Hence campus-based institutions become forward-thinking perpetual redevelopers of their own property and acquirers of neighboring property, always on the alert for nearby stranded-cost real estate, where the former use has gone extinct. If the building, shell and Federal Acquisition Regulation entitlements persist, an institution will always covet it. Markets always clear, and institutions can be patient: they will buy, when the price is low, the local government hungry for redevelopment and the repurposing feasible. Then enters the cash-rich university to recycle the eyesore into a sustainable LEED-certified job-creating asset, with housing an essential part.

Derelict formerly commercial structures make great historic or sustainable redevelopment housing opportunities. Grande dame hotels become dormitories, mills revive as workforce or elderly housing, warehouses divide into live-work or co-working spaces, and docks transform into shops, hotels and condos.

For visionary developers today, housing conversion can be expected for two stranded asset classes near campus-ized institutions. Enclosed shopping malls will easily become natural live-work-play indoor playgrounds. Office towers, whose value will soon plummet, can re-emerge as vertical campuses. Only a third of the current office space will remain; the excess will become specialized uses within a mixed-use parfait. The ground floor, newly buffed with a glass atrium skirt about it, will become experiential retail. A few floors up will be the realm of leisure. Higher still will be hotels, extended-stay rooms and rental apartments. Top dollar pricing will be reserved for high-floor pay-for-breathtaking-view condos on the highest floors.

The vertical campus-ization will be accomplished by:

• Retrofitting every ingress and egress to be both a scan and scrub encounter;
• Programming elevators as stratified and health-secure vertical main streets;
• Adding discreet health monitoring and display (e.g., CO2 levels) throughout elevators, corridors and other gathering spaces;
• Diversifying retail uses to include small pharmacy/clinics, bodega/convenience stores and delivery-pickup stations (themselves with scan and scrub technology); and
• Adding skybridges between towers that cross local streets and whose owners adopt a common code of health security for all the buildings in the new CBD campus.

That’s what 4+1 institutions urgently need, and what they will cause to happen. But as reluctant pioneers of necessity, they need confidence-inspiring trail guides, and will seek out, find and cling to visionary, community-sensitive, authentic affordable housing developers.

Like you, perhaps?