How San Diego State Cut $400 Million from Its Housing Plan

“What happens when your campus needs housing for thousands of students, but you're facing impossible housing costs, limited capital, and mounting pressure to move fast?

At the Higher Ed Facilities Forum, Bob Schulz, Associate Vice President of Real Estate, Planning & Development at San Diego State University, shared how his team tackled one of the largest student housing efforts in the CSU system. By simplifying the problem, phasing the plan, and incentivizing speed over perfection, SDSU is delivering a major housing program years ahead of schedule, and saving hundreds of millions in the process.

Rethinking the Role of Housing+

At SDSU, student housing is no longer a luxury; it's a necessity. “If our students can’t live here, they can’t go to school here,” Schulz said. With San Diego now considered “impossibly unaffordable,” access to housing has become a basic requirement for enrollment. But after investing in SDSU Mission Valley, San Diego State’s new satellite campus, and dealing with the financial aftermath of the pandemic, financing new beds felt nearly out of reach.

So instead of starting with a wishlist of design features, the university started with a single goal: $200,000 per bed. If Schulz could hit that target, leadership would greenlight the construction of 3,000 new beds. “We didn't know where it would go or how we'd build it, but we knew that pro forma might be achievable," he said.

A Phased Plan with Revenue Built In

Rather than tackling the entire program at once, SDSU took a phased approach. The first wave of student housing would be built and occupied quickly, allowing rental income to begin flowing in. That revenue would then help support the debt service for future phases.

This wasn’t just a logistical move—it was a financial strategy that made the billion-dollar vision fundable from the start.

Speed as a Competitive Advantage

SDSU launched the project by cutting through red tape and moving multiple processes forward at once. Environmental reviews, site studies, and procurement were all handled in parallel. A two-sentence email went out to architects and builders: We’re building 3,200 beds. Lowest cost wins.

To show they were serious, Schulz's team offered $400,000 stipends to shortlisted firms—even those that didn’t win the project. “Enough money to make my boss think I was crazy,” Schulz joked, “and enough for the teams to know we were serious.”

Letting the Market Shape the Solution

The results were anything but cookie-cutter. Proposals ranged from slab-on-grade wood-frame buildings to prefabricated metal-stud systems built across the border in Tijuana. But the biggest surprise came from Swinerton, California's largest residential builder, who proposed a Type I concrete high-rise approach that enabled more beds per structure and faster delivery.

It wasn't the cheapest per square foot, but it delivered the most value. Fewer buildings meant less disruption, and the faster timeline cut down on escalation. The shift saved SDSU over $125 million and eliminated the need to construct three of the originally planned buildings.

Designing for Flexibility—and the Long Game

SDSU initially assumed it would need six apartment buildings to meet capacity. But with the taller structures, they only needed three. That freed up valuable land for future development and allowed them to fast-track a new flex-use building to house freshmen and sophomores.

“We ended up with only three apartment buildings instead of six,” Schulz said. “That's real estate we’ve now preserved for whatever's next.”

And the pace paid off. By starting a year earlier, SDSU captured an additional $80 million in savings—money that's now being used to offset disruptions, including relocating displaced academic departments.

Incentivizing Outcomes, Not Just Effort

SDSU used a progressive design-build model, but with a twist: a $15 million incentive tied to delivering the exact number of beds at the promised cost. If the team missed it? No payout. No appeals.

The university also assumed cost risk for infrastructure and the amenity building, focusing the team’s accountability on the student housing itself. “Even our president got on board when we told him we’d save $80 million by finishing a year early,” Schulz said.

A Smarter Way to Build

In the end, SDSU reduced the project cost from $1 billion to under $700 million—and got 460 more beds than initially planned, at no extra cost.
“There’s no brilliant technology here,” Schulz said. “But I was startled by how much value our design-build partners created—just by competing on a problem statement instead of a prescriptive design.”

For campuses navigating budget constraints, rising costs, and urgent student needs, SDSU’s approach offers something refreshingly rare: a big solution that actually delivers.

Watch the full talk below: