Hopes have been dashed for University of Victoria students seeking more housing options after a plan to build dozens of market-value units in the city's downtown core was nixed in favour of developing a hotel.

According to UVic Properties, a wholly owned subsidiary of the university, the development first proposed for the 1300-block of Broad Street is no longer feasible.

The project was announced in 2017 and originally included 59 units of housing for graduate students on property owned by the university. The units would have been priced at market value and UVic graduate students were to get preference over other tenants.

Peter Kuran, president and CEO of UVic Properties, told CBC On The Island host Gregor Craigie that the initial proposal never went before city council and the company learned it needed to adjust its construction plans to meet city requirements. This included reducing the height of the building by one storey.

"A lot of things were taken into consideration and ways to make our application more feasible and really have a better chance of success through the rezoning process," said Kuran.

Kuran said after consulting with the city and community associations, UVic Properties concluded that a hotel, retail and office space on the site instead would be "checking off a lot of boxes we heard as we consulted."

Disappointed students

Mehdi Hashemi, president of the UVic Graduate Students' Society, is disappointed to hear student housing is no longer part of the equation.

Hashemi said a survey done by the society last year showed secure housing was among the top three major obstacles to academic progress graduate students face. He said UVic Properties should have been more transparent while they were determining to reverse the plan.

"We wanted to hear more about the decision beforehand and not be surprised by it," said Hashemi.

He hopes that the university plans to use the revenue from the hotel property to invest in projects related to housing for students.

Kuran said there "is a very realistic chance" that some of the money will be used for that purpose.

"A very significant piece of this proposal is that we are retaining all of the land under a 99-year lease,' said Kuran. He said the university would have had to sell some of the land to accommodate the housing that was in the original plan.

Kuran also pointed out that in November the university received money from the province to provide an additional 620 beds for UVic students on campus.