This question was submitted by one of our readers. If you have a question you want me to answer go here to submit it: Fraternity Advice.

Question:

I’m currently an undergraduate student at William and Mary, and I’m writing a column about changes in Greek housing. To give you a bit of background, W&M is transitioning its fraternity housing from the units, a complex of over a dozen, split-level dorms with 36 beds spread over 2.5 floors, to a new Greek Complex in 2013-14.


The units have been the home of fraternity life on campus for over 40 years, and as membership in fraternities has decreased, it is becoming harder and harder for chapters to fill their individual units. (Chapter size ranges from 20-80 members).

As there is a housing shortage at W&M, the administration started making fraternities pay for any vacancies in their units. This proved to be cost-prohibitive, so some fraternities resorted to sharing a unit, and others moved off-campus completely.

The new Greek complex will have only 17 beds per chapter house, which will obviously be easier for each individual chapter to fill.

So I had a couple questions about fraternity housing nationally:

Is this move towards less beds per chapter house part of a larger trend nationally?

The conventional wisdom, as I have heard it, is that the number of fraternity men has been steadily decreasing. Is this true?

Any other thoughts you have about this change?


Answer:

Fraternities were at their membership peak in the 70s.  Numbers have been in the decline ever since.  A lot of that is attributed to the boom in student population during/post Vietnam.  This is when a lot of universities built houses for their chapters.  Obviously they were built to house the chapters for the membership sizes they were back then.

Two things have happened since.  First, fraternity membership started to decline.  Second, the houses became old.  Houses from this era are now 40 years old, and have had a tough life.  Most need to be renovated or replaced.

Both of these things has had a profound impact on the health of the fraternity.  Chapter membership is down, and because of that they can’t fill their houses.  However, they still have to pay for the empty rooms, which is an extreme drain on chapter budgets.

Think about that impact.  More and more of the brotherhood dues are going to pay for empty rooms.  This means less funding for the programs the fraternity wants to have.

As a result, the fraternity has a tougher time during fraternity recruitment because they don’t have as much to show for the expense of the fraternity.  Membership numbers decrease even more, making this problem worse.

And let’s not forget that these old houses are becoming older by the day.  Students often have much ‘better’ living options out there, and living in the fraternity house is seen as a sacrifice.  This is obviously not a good situation for anyone involved.

I commend W&M for proactively addressing the issue with a housing plan that addresses the needs of their membership.  It looks like they are putting their chapters in a position to succeed, which they undoubtedly will.

I hope this becomes the trend on other campuses because the problems you are seeing at your school is common across the entire Greek Community.

This question was submitted by one of our readers. If you have a question you want me to answer go here to submit it: Fraternity Advice.






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2 thoughts on “Greek Housing – The William & Mary Solution

  1. I have close to 15 years experience with fraternity housing and used to be VP of a large multi-state property development company. I want to talk more broadly about fraternity housing. We’re working on a housing series, but it may be summer before that’s out for the website. In the meantime, I’ll try to help you with your questions.

    Don’t bother with the national trend data you’re asking for. It’s mostly misleading and useless.

    Things can be dramatically different from one campus to the next. Averaging it all together won’t tell you anything about what’s happening on your campus.

    Everything runs in cycles. You can easily see that looking at the composites of any chapter that’s been around 20 years.

    Fraternities were huge in the post-war traditional 50s, down in the hippie 60s, back up post Vietnam through the excess of the 80s, then down again in the 90s as litigation shifted regulation. It’s started to stabilize and come back up now. Those cultural elements affect the percentage of the market you can capture.

    The overlapping longer curve is demographic. The birth-rate determines what the market size will be in 18 years. WWII vests got back and made lots of babies. They hit college campuses from 1964-82 & Greek numbers were up – that’s the 70’s period Pat referred to. The birth rate slowed down in Generation X. They hit 93-97. Gen Y was up a bit and is hitting 98-2018. The rate drops again for millennials beyond 2018. Greek membership trends lag the generation changeovers by a few years, but are that’s a pretty accurate predictor of what nationwide fraternity membership numbers will do.

    You can’t do anything about that stuff so there’s little reason to worry about it. If it helps you to understand this is cyclical rather than a long slow decline of Greek life, than I guess that’s good, but it won’t tell you much about what’s happening on your campus.

    During this economic downturn the number of college students has jumped. There is a tendency away from more selective/expensive schools to tier two schools. A lot of state schools have responded to budget/donor cuts with increased tuition and massively increasing enrollment. Many private schools are cutting tuition and rolling out new aid programs to keep up enrollment numbers.

    On the larger scale, the mobility of our society and broad financial aid system have changed the makeup of universities over the past 30 years, most particularly old guard schools. At a school like W&M in your parent’s time you might have a lot of 2nd & 3rd generation legacies coming through. They’re now more dispersed across the country. You’re more likely to have a higher percentage of 1st generation college students and people on financial aid that can’t afford your dues. That new student body is statistically less likely to self-select Greek life. Greek systems have to continually adapt to their market.

    Because of these differences between schools, membership numbers are down in some places and up double digits year over year in others.

    Those factors, as well as the environment of your campus (small town/metro area, alternate entertainment options, make-up of student body, etc) will determine much more than the prevalence of stereotypes or marketing efforts what the size of any given Greek system will be.

    Now let’s talk about housing…

    The first thing you need to understand about Greek housing is it has absolutely nothing to do with housing.

    When you start a business, you might run it out of your house for a while, but eventually get a real office. Depending on what kind of business it is you create specific spaces that enable you to operate at the level necessary for success.

    A fraternity is a business. Our primary mission is delivering the spiritual and philosophical lessons of our ritual, but we can’t do that if we don’t run the business aspects efficiently – much like a church that can’t keep the lights on.

    So as a business, and if money were no object, what types of spaces do you need to best facilitate delivery of your principles to all of your members?

    Where do you have meetings? Where do you do ritual? Can some school maintenance guy decide that’s a good time to come in? Where do you committees, exec, and JBoard meet? Where do your alumni assoc exec, governing board, and housing corp meet? Are those spaces formal enough to encourage the decorum you need in those meetings? Do you have a room big enough to comfortably fit your whole chapter whenever you want? Where do people hang out between classes, evenings, & wknds? Where do you go to play pool or volleyball or catch a pick-up game of basketball? Where do you get together as a group to watch football games?

    If you don’t have those kinds of dedicated spaces, there probably are several brothers you only see for meetings and social events. A lot of your brotherhood can easily devolve to being based on social rather than ritual. You probably are not very well organized and not operating on solid budgets like a legitimate business would – like the better chapters in the country are.

    A fraternity house exists solely to provide those types of spaces. In a perfect world where money was no object they would all be lodges with no residents and just those types of spaces. But, that’s not possible. In order to pay for those spaces we need enough income to make it economically viable, and that is the ONLY thing having residents is about. It’s a delicate balance to get the right mix of different business/common spaces, and to have enough of it to support the range of chapter sizes you’ll experience over a 40+ year period, but not to overbuild your ability to support the facility. Then you put in as many beds as you reasonably can.

    A big problem with University designed housing is they have a completely different view of the purpose. They don’t understand your mission and don’t care. They are shooting for what they call a living-learning environment. That means they want a floor of dorms stacked on top of a floor of the library with a house mom there looking over your shoulder. A facility designed with that concept will not be a good fit for any fraternity.

    Quick lesson in fraternity house economics…

    You spend a huge amount of money up front, usually $1-2.5mil on a 30-40yr note. You’ll be at 100% occupancy in the first couple years. Occupancy will slowly degrade over a 20 year period before your break-even point at around 70% occupancy. At the 20 year point, you must do a major renovation that will cost upwards of 50% of the property value. That will put you back to 100% occupancy and the cycle starts over again.

    The fact that your current buildings have not been remodeled for 40 years and you can’t fill the rooms is not surprising.

    The fact that your school and Greek system have allowed chapters to decline to 20 members without either intervening to turn them around or getting rid of them so consolidation of the rush pool pushes up the size of other chapters, all of that shows the lack of economic ties between the chapters and their facilities.

    Building new properties with fewer beds will not solve the problem. It will kick the can down the road. Your occupancy rates will initially jump because of nice new housing, but those places will wear down over time and occupancy will drop. Because they are smaller houses, chapter will have room to shrink further before housing bankrupts them. There is no direct pressure to grow or die. And, I’m very concerned with 20 man chapters because there is no way you can financially afford to operate according to the insurance/litigation driven rules we all live under.

    So, more directly to your question…

    I would say the national trend is slightly toward more beds, but that’s misleading. A giant national average isn’t going to tell you anything of value.

    The more important trend tracks with on-campus housing. Residents don’t want double/trip/quad rooms with community baths. They want small singles with shared en-suite baths and modern amenities.

    What we’re seeing a lot of right now is older paid off houses having their residential areas gutted and converted to modern singles. That’s expensive to install and less efficient use of space, so that would tend to skew the numbers toward fewer beds, but they bring higher rents. It’s risky because each vacancy is a higher percentage of income, but it’s also easier to keep fewer beds filled.

    We see the same type of rooms in new construction, but more of them. When you can design a place from scratch for that type of rooms, you are better able to get the balance right to maximize income.

    In the real short term, construction costs and loans are really cheap. You can get a lot for your money right now. That allows you to oversize a project for a lower cost. That skews the bed numbers higher. You can build in more bedrooms than you need, but still be able to pay the bills with a higher vacancy rate or flex up to support a larger chapter because you stretched your dollars further. It’s a great time to be building fraternity housing. That’ll change when interest rates go up and construction recovers more.

    I would say the more interesting trend for housing officers is the increasing number of projects using a benevolent for-profit investment model, mostly through self-directed IRAs, as a bridge to long-term donor buyout. It’s a pretty simple process really that’s well mapped out in the investment property world, and just hasn’t been applied much in fraternity housing until the last few years. The multi-family sector is recovering now where single family is flat. A lot of that investment potential from alumni is coming back onto the market at a time when they can stretch their money further.

    Looking at the W&M project, it’s not ugly, but I’m not impressed. I’m a little disappointed with the track housing look. Each house should have a distinctive character. It can all be in the same style, but this just looks lazy. There are some architectural elements I don’t think are a good idea – I hate those bay window looking things, they’ll get broken. I realize I’m further south than you, but I don’t see good use of outdoor space. If you’re short on common space, and if you’re reducing beds then you are, then the best way to partially make up for it is good flowing outdoor living space. I would have rather seen enclosed backyards, ground level decks, outdoor kitchen/grilling areas, and sand volleyball or basketball courts. These do not look like they’re designed well for risk management at all. Do you do social functions here or not? Do you do small gatherings or pick up/drop off from socials? That has to play into design & I’m not immediately seeing it. I don’t see mass parking for dedicated Greek use. How are you going to put basically your total Greek system into those houses on meeting nights or weekend nights at the same time if there isn’t dedicated parking? How are people going to hang out there in their spare time if it’s a hassle to park or a long walk? From the quick exterior overview, I’m not feeling it. It doesn’t look like a fraternity housing officer designed it, which means I’m concerned there could be some major lost opportunities in how it impacts your operations.

    I’d like to see the floor plans; and 5-year data on chapter sizes, pledge class sizes, and number of residents per chapter. That’d help me diagnose the types and balance of common spaces. I’d need to talk to you more about how chapters operate there too. We could figure out what facilities are the best fit, as well as some changes in the way you do business that could bring big improvements.

    I personally hate University owned Greek housing for a number of reasons. That isn’t something you seem to have a choice in though, so I leave that off for the time being. We’ll cover that issue in our housing series down the road.

    I know that’s a lot of information thrown at you fast. If you have some more specific questions, or would like to talk directly, submit with your contact info to Pat and we’ll figure it out. Good luck!

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