Rents at student housing properties rose during a difficult 2-year period for conventional apartments, according to a new research report by the Washington, D.C.-based National Multi Housing Council (NMHC).
Student Housing 201: 2004-2006 Rent Growth in 64 College Towns finds that at a time when conventional apartment properties were struggling with concessions and lower effective rents, many properties targeting students were posting rent gains.
The median rent growth rate between 2004 and 2006 across median rates for all unit types studied (e.g. studio, one bedroom/one bath, three bedroom/two bath) was 7 percent. This exceeded the 6.5-percent growth rate in rents measured by the Consumer Price Index during the same period.
The study is the fourth in a series of reports published by NMHC to help apartment firms better understand the dynamics of the student-housing sector. Prior reports have analyzed market conditions for off-campus housing, enrollment trends, on-campus housing stock, student housing demand, and properties that lease by the bed instead of by the unit.
Some of the highlights of Student Housing 201:
* Units with three or more bedrooms tended to have the highest median growth rates from year to year, ranging from 9 to 13 percent.
* The areas with the highest rent growth include the University of Wisconsin (Madison), the University of California-Irvine, and Georgia Southern University.
* Negative rent growth was recorded for several unit types in different areas of the country. Clemson University (Clemson, SC), for example, posted negative rent growth in four of the unit types examined. Virginia Tech came in second with negative rent growth in three unit types.
* California schools dominate the list of high-rent markets. Stanford University and San Jose State University posted the highest rents for six of the eight unit types for which data was available. A third California school - the University of California-Irvine - is on the high rent list for five unit types. Two non-California schools also rank among the highest rents for five unit types - Cornell University (Ithaca, NY) and Rutgers University (New Brunswick, NJ).
* Despite the conventional wisdom that student-housing providers must offer 9-month leases, just a small number of properties offered only 9-month leases. One-third of the properties offered both 9- and 12-month leases. The remaining properties offered traditional 12-month leases.
* Student housing leases remain largely “by the unit” and not “by the bed.” Fully 1,300 of the 1,508 properties surveyed rented by the unit. Only 140 rented by the bed. A small number offered both types of leases. Interestingly, by-the-bed properties seem to be more common in the southern states.
This information was reprinted with permission from the NMHC, a national association representing the interests of the larger and most prominent apartment firms in the United States. For more information, contact NMHC at (202) 974-2300, e-mail the council at ([email protected]), or visit NMHC's website at (www.nmhc.org).To purchase a copy of the 76-page report, visit (www.nmhc.org/content/Servecontent.cfm?contentItemID=3951).
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