How Student Housing Rents Stack Up Against Market Rate

Rents near college campuses are typically more expensive than the average multifamily rents in the same market. A recent report from Yardi’s Rent Café analyzed rents within one-mile of college campuses across the country, and found that 67% of rent prices near universities are higher than the city average. This is largely due to the strong demand for housing near campus, walkability and proximity to campus. The trend was true for most California campuses as well, although there wasn’t a specific pattern as to campuses that did have higher rents versus those that didn’t.

“While our study did not show a specific pattern when it comes to city averages compared to rent prices within a mile of California’s most prestigious universities, it’s no surprise that the appeal of the campus location influences prices just as much as a college’s reputation does,” Alexandra Ciuntu of Rent Café tells GlobeSt.com. “Being home to some of the country’s most prestigious universities does not necessarily mean rents near California colleges are higher than the averages in the cities they are located in. Rents near the University of California, Riverside is among the most affordable among the top colleges in the state, but the Riverside city average is a more affordable $1,533 per month. Same goes for San Diego, where the average rent is $2,153 while renting near the University of San Diego is $2,349/month.”

Top universities also offered more affordable rents, generally. “Renting within one mile of higher-ranked universities in California is cheaper than the city average, so the money saved on transportation may soften the blow of California prices,” adds Ciuntu. “Rents within one mile of the University of California-Berkeley go for $3,197 compared to the $3,167 Berkeley city average, and Stanford U students pay $3,958 to rent near campus compared to renting for $3,970 in the rest of Stanford.”

Student housing rents also increase at about the same rate as market rate apartments. “If we are to consider the market evolution within this past year, rent prices near the California universities analyzed echo the annual increases of city averages,” says Ciuntu. “Such as the average $3,541 rent near UCLA, which experienced the same evolution compared to the $2,467 L.A. average, as did the $3,197 average near the University of California-Berkeley compared to the $3,167 Berkeley average.”

Overall, the report illustrated the difficultly for students to find affordable options, particularly in California. However, students attending colleges in secondary markets will likely find less pricing volatility. “Average rent prices fluctuate differently in gateway cities as opposed to secondary markets or submarkets within metros and rent prices around universities generally reflect that. You expect rents in San Francisco with a $3,618 city average or Stanford with a $3,970 city average to jump way past the $3,000 mark, but less so in Davis, where rents are $2,070, Santa Barbara, with rents at $2,142, or Irvine, with $2,379 rents.”

Ciuntu also looked at the difference in schools that supply on campus housing options versus those that don’t. “It’s important to also consider that high-demand in certain college areas may be influenced by the lack of university-provided off-campus housing supply aimed at teachers and students alike, while the opposite applies to areas where university-owned housing helps ease the pressure on market-rate apartment demand,” she says. “What lies beyond the student dilemma of choosing between on- and off-campus living is not just personal preference, but a lot of planning and decision-making.”