Off-Campus Housing Near Colleges Drives Higher Rent
Posted By Donna Fuscaldo on August 29, 2016 at 10:00 am
Demand for housing in college towns drives up rents, particularly for properties within a two-mile radius of the schools. In some cases, off-campus housing commands a premium of 80 percent just because of proximity.
But all colleges and universities don’t benefit. HomeUnion, the residential real estate investment firm, finds demand is concentrated in desirable locations with lots of amenities and high walkability scores. “In a lot of places, the most expensive real estate is in areas where there is a lot of demand outside of college students,” says Steve Hovland, director of research for HomeUnion. “A lot of high-paying jobs in the areas are also driving up rents.”
Looking at the median rents within a two-mile radius of colleges and university campuses around the country and matching it up against the metro area’s market rate, HomeUnion compiled a list of the most expensive off-campus rents. It found UCLA, Stanford University and University of Miami have the highest rents in the nation, with Harvard University and University of California at Berkeley rounding out the top five. Other notables include the University of Utah in Salt Lake City, University of Washington in Seattle, Michigan State University in Lansing, Portland State University and New York University in New York City. All command rents that are anywhere from 80 percent to 34 percent higher than real estate that isn’t so close to school.
At UCLA, off-campus housing within in a two-mile radius of campus goes for $4,343 a month on average, 80 percent more than the $2,276 market rate. Live within a two-mile radius of Stanford University and it will cost you $5,705 a month on average. That compares with the going rate of $3,499. Meanwhile, in Miami, people are paying $2,818 a month, 44 percent higher than the average $1,916 rent.
College students demand opulent living
Not surprisingly, many of the highest rents are in high-demand cities. But that doesn’t mean rural college-town rents aren’t booming. Take Texas A&M. Demand for off-campus housing, particularly high-end properties, drives up rents, pushing families out of the market. “Kids want to live in new properties that they are used to at home,” says Jennifer Fredericks, a real estate agent for Better Homes and Gardens Real Estate Preferred Living in College Station, TX, home of Texas A&M. “They want nice houses with granite countertops.”
The demand for high-end housing off-campus is driven by builders erecting these amenity-filled properties that boast hardwood floors, sprawling gyms and high end appliances. Students also are spoiled by their parents, wanting to mimic home life while attending college.
A $2,000 or more monthly rent may not seem like something a college student can afford, but often three and four students are going in on a place, transforming what college living is all about.
College dorms are going high-end
Luxury living is also happening on campuses in some colleges and universities around the country. A few years ago Boston University opened a 960 bed-dorm with jaw-dropping views from the 26th floor common area. Single and double suites with elegant furniture, big private bathrooms and walk-in closets look nothing like what parents think of a dorm room.
The University of Arizona in Tucson has the Hub at Tucson, which boasts rooms with private beds and baths, fully equipped kitchens, walk-in closets, private washers and dryers, and amenities that include a gaming room, a gym, spa with a sauna, steam room and tanning beds, and a rooftop infinity pool. There are also hammocks and a volleyball court.
Meanwhile, Osprey Fountains at the University of North Florida also has a fitness center, game room, and convenience store. On top of that it has a lazy river and several “theme lounges” such as the Upper-Deck that are filled with huge plasma televisions to view sports and entertainment. That opulence comes at a price, creating a haves and haves-not situation on college campuses.
“Only students with a lot of resources can live in the super nice dorms,” says Kevin Fudge, director of consumer advocacy and the ombudsman at American Student Assistance, a nonprofit that helps students figure out their college finances. “Those with Pell Grants aren’t eligible. All students should be afforded the same opportunity with on-campus housing.”