Too Much Supply in Student Housing

From a story in the 8/28/13 Wall Street Journal:

Some of the millions of students heading back to college—and their parents—are finding a pleasant surprise: Landlords nationwide are cutting rents because of an oversupply of student housing in college towns…

A record 51,000 new off-campus beds are expected to be delivered in college towns nationwide this year, according to Axiometrics Inc. Developer interest in the sector has swelled on the belief that enrollment was outpacing the ability of budget-constrained schools to build or modernize on-campus housing.

But developers appear to have overshot the mark in numerous markets. Some of them failed to take into account other construction that was planned, say experts. Others misjudged future enrollments or the willingness of students to pay up for off-campus living at the time when many families are still pressed in the aftermath of the economic downturn.

With vacancy rates rising due to the new supply, new and existing complexes near schools such as Florida State University, Kennesaw State University in Georgia and Arizona State University are being forced to cut rents to fill beds.

Here at PTAA we’ve been hearing that vacancy rates are up for some local student housing providers, but we don’t have hard data on this semester’s numbers just yet.