Oversupply of student housing may create trend of decreasing rent in Columbia
CEO of the Columbia Housing Authority Phil Steinhaus: “As new student housing gets built, it relieves some of the pressure that’s been on the rest of the housing market.”
Feb. 28, 2016
Columbia ranks eighth in the top 10 U.S. cities that have experienced decreases in rent between January and Februrary, according to a report.
The study, conducted by apartment listing site ABODO, said unlike Columbia, most cities have seen apartment rent increase as national employment increases and more people can afford to pay rent. In most cases, rental demand also increases as college graduates saddled with student loans choose to rent instead of purchasing a home, according to the study.
ABODO spokesman Sam Radbil said Columbia’s decrease had been a steady trend over the past three months and attributed the trend to an oversupply of housing and less demand. The report cited national construction rates at their highest level since the 1980s. As more rental units are built and vacancy rates rise, prices decrease.
“We anticipate that as more developments are finished and supply increases, the trend might continue and help to bring relief to Columbia residents who rent apartments,” Radbil said.
This trend prevails even as more luxury complexes on college campuses offer competitive amenities, renovations and, therefore, may charge higher rent prices. The growth in apartment construction convinces ABODO analysts that the amount of new supply will help slow rapid increases in rental prices.
The replotting for a 10-story apartment complex to be built downtown was recently approved by the Columbia City Council. Development continues even though applications to MU declined this year by 941 freshmen.
Off-Campus Student Services Coordinator Dionne George said the decrease in enrollment has not directly impacted demand for off-campus housing or current costs of rent, averaging $450 per month based on prices collected from the properties on their website.
Some students are still willing to pay nearly double the average rent cost for a prime location.
“The big thing I have access to is campus — that's why it has the price tag it does,” sophomore Stephen Coy said.
Coy pays around $800 per month at The Lofts at 308 Ninth. According to their website, each unit boasts flat screen TVs, wood floors, granite countertops and jacuzzi bathtubs.
“I was willing to pay more this year because I thought that it would be important to be able to walk to campus,” Coy said. “I'm going to live with someone off-campus next year because I'm going to prefer saving the money.”
In the future, George said a lower number of sophomores and juniors could affect rent costs.
Columbia Housing Authority CEO Phil Steinhaus said increasing student housing may eventually help low-income residents in Columbia who benefit from the CHA Housing Choice Voucher Program. The program helps renters find housing options with access to jobs, transportation and goods and helps subsidize their rent to local landlords.
“The students searching for affordable rental housing are competing with other people looking for affordable housing like the people on our Housing Choice Voucher Program,” Steinhaus said. “As new student housing gets built, it relieves some of the pressure that’s been on the rest of the housing market.”
Edited by Hailey Stolze | email@example.com