DAVID GREENE, HOST:
College students are settling in for the fall semester and more and more it is happening in privately owned housing - instead of dorms. Over the past decade investors have been cashing in on this growing market. From Atlanta, Susanna Capelouto reports.
SUSANNA CAPELOUTO, BYLINE: Just on the edge of the Georgia Tech campus in Midtown Atlanta, lots of new dorms are in the making, though Stuart Bruening doesn't call them dorms.
STUART BRUENING: I mean, it's luxury apartment living catered towards college students.
CAPELOUTO: Bruening is with J.E. Dunn Construction. It's building this 25 story high-rise called, Centergy North student housing. When it opens next year the private investors behind the project hope to attract more than 600 students with amenities like a fully outfitted rooftop deck.
BRUENING: It's got a fireplace. Kind of a fountain water feature, hardscape seating, there's going to be outdoor theater area up there. All with a glass hand rail, you know, overlooking the city.
CAPELOUTO: Students get stainless steel appliances, quartz countertops, washers and dryers in their apartment, bedrooms with private bathrooms and of course high-speed broadband.
SEAN WARNER: I will say I'm completely jealous of rooftop pool. If I was a freshman coming in I would definitely try to get in there.
CAPELOUTO: Sean Warner is an intern on this construction project. The Georgia Tech Senior recalls his housing experience as a freshman.
WARNER: The rooms were small and all the halls share a community bathroom.
CAPELOUTO: Today's private student housing is lucrative because units have more bedrooms, rents are per bed and usually paid for by parents. Kelli Smith is with the apartment market research firm Axiometrics.
KELLI SMITH: Enrollment is the main driver for student housing and that university cannot pick up and go somewhere else. So, I mean, it is a stationary source of demand.
CAPELOUTO: And Georgia Tech's enrollment is up by about 10 percent since 2011. This school is part of a broader public university system that increasingly relies on private off-campus housing.
SUSAN RIDLEY: With 60,000 beds in the system we've got 310,000 students. So, we're not trying to house every student.
CAPELOUTO: Susan Ridley is with the Georgia Board of Regents.
RIDLEY: Certainly the off-campus market, particularly for our larger institutions, is very robust and that provides wonderful options for our students.
CAPELOUTO: It's an option that's become a $4 billion industry - estimates Randall Shearin. He's editor of the industry trade magazine called, "Student Housing Business."
RANDALL SHEARIN: Off campus housing has really boomed because public universities are really constrained with their dollars and they cannot expand the student housing stock on their universities.
CAPELOUTO: Just across from the half built Centergy North high-rise, sophomore Raymond Wong says he's considering living off campus next year. He now pays 4,200 a semester for his on-campus dorm room and has heard about the new luxury dorms.
RAYMOND WONG: It looks really cool. I'd like to look into that depending on how much it costs and if it's more than I'm paying now, it's probably not going to be feasible.
CAPELOUTO: Centergy's owners say their rents will likely be competitive with the most expensive on-campus housing, which is around $4,600 a semester. But universities' increasing reliance on private developers worries Edward St. John. He's a professor at the University of Michigan, who studies inequities in higher education.
EDWARD ST. JOHN: The cost of those high-class dorms are going to be outside of the allowable costs for student financial aid. They're not going to be able to provide aid for the low income student to have the same privilege.
CAPELOUTO: St. John says the privatization of housing is part of an increasingly more expensive education system that caters to wealthy students. And as long as these students' parents are willing to pay for housing that simulates home, investors are ready to cash in on the demand. For NPR News, I'm Susanna Capelouto in Atlanta. Transcript provided by NPR, Copyright NPR.