When universities enroll more students than they house, the difference does not disappear. It becomes housing demand in the surrounding community. In many university markets, that demand enters the same rental neighborhoods and competes for the same lower-cost housing relied upon by working families and lower-income households. The result can be an unusual housing market in which two populations with limited resources—students and lower-income residents—are competing for a housing supply neither created. Yet we rarely plan for the problem that way.
Universities tend to think about beds, enrollment and campus life. Cities think about housing supply, affordability, neighborhoods and infrastructure. Both approaches make sense. The problem is that they are planning for different pieces of the same housing market, and the consequences of the gap between them can be significant.
The Gap Between Beds and Demand
Consider a university with 20,000 students and 8,000 university-controlled beds. The housing demand generated by that university is not limited to those 8,000 beds. That is simply the number of students the institution has chosen, or is able, to house directly. Some of the remaining students may live at home or have other arrangements. Many will rent apartments, houses and rooms in the surrounding community. At that point, they enter the same housing market as everyone else. That distinction betweenuniversity housing supplyandstudent-generated housing demandmatters.
Students also interact with the rental market differently from many traditional households. Four students sharing a house, for example, may collectively support a rent that a single working household cannot. The individual students may have limited incomes, but together they may have access to parental support, financial aid, loans or other resources that allow them to compete for housing differently than a conventional lower-income household. For a property owner, the economics are not complicated. If a house can generate more income rented by the bedroom or to several students than it can as a traditional family rental, the market has an incentive to respond.
Research supports the importance of this relationship. A study of 168 major U.S. universities found that rental development was greater near larger, growing universities with limited dormitory capacity, particularly in lower- and middle-rent neighborhoods. Multiply that across a neighborhood and the consequences can become significant: fewer lower-cost units available to conventional households, upward pressure on rents and a gradual shift in who can compete for housing near the university. Students do not necessarily win in that market either. They still need somewhere to live, often within a limited geographic area and on a schedule dictated by the academic year. A constrained supply can mean higher rents and fewer choices for them as well. In other words, failing to plan adequately for student housing can place additional pressure on two groups that are poorly positioned to absorb it.
Two Plans for the Same Housing Market
The problem starts with the way we plan.
Universities look at enrollment projections, residence life, campus facilities and institutional priorities. Cities look at population, households, housing production, affordability, neighborhoods and infrastructure. Housing authorities and affordable housing agencies concentrate on lower-income households and unmet housing needs. Every one of those perspectives is legitimate. But the housing market does not organize itself according to our organizational charts. A university may plan its housing based on enrollment and campus needs while the surrounding community develops its housing plan based on residents and households. Neither necessarily accounts adequately for how thousands of students affect the surrounding rental market.
That becomes particularly important when enrollment grows. Adding several thousand students is not simply an enrollment decision. Unless the institution provides housing for those additional students, it is also a decision that creates additional demand for housing somewhere in the surrounding community. Universities planning significant enrollment growth should assess its likely impact on local housing demand before approving that growth. That demand should be understood before the students arrive—not after rents rise, vacancies tighten or neighborhoods begin responding to the market.
What Happens at the Campus Boundary? Universities know that off-campus housing demand exists. Many institutions maintain off-campus housing offices, provide rental information or allow private landlords to advertise available properties to students. The level of involvement varies, and some institutions make clear that the university does not inspect the properties, endorse the landlords or assume responsibility for the resulting rental relationship. There are understandable reasons for those limitations. Universities cannot reasonably guarantee every private rental transaction involving one of their students.
But the practice illustrates a larger problem. The institution recognizes the student as part of its community, recognizes that the student needs housing and may even help connect that student to the private rental market. Yet once the student crosses the campus boundary, the housing need can effectively become someone else's problem. That is too narrow a definition of housing responsibility. Universities do not need to become landlords for every student. But the housing demand created by an institution should remain part of its planning responsibility even when someone else ultimately provides the housing.
Count the Whole Housing Demand
The first step is straightforward: universities should identify not only how many students they house, but how many students they expect the surrounding community to house. If 20,000 students attend a university and 8,000 are housed by the institution, what happens to the rest? How many live at home? How many rent locally? Where do they live? What types of units do they occupy? And what happens if enrollment increases by another 2,000 students? Those answers should become part of university housing planning. They should also become part of local housing planning.
A community with a significant university population should account for student demand when assessing rental supply, affordability and future housing needs. Otherwise, the community may be trying to solve an affordable housing problem without fully accounting for one of the forces affecting its rental market. The objective is not simply better data. It is better decisions.
Create Capacity Where Demand Creates Pressure Counting the demand matters only if institutions are willing to respond to what the numbers show. In some communities, the private housing market may have enough capacity to absorb student demand without significant consequences. If so, there may be little reason for intervention. But where university-generated demand contributes to a housing shortage, rising rents or the loss of lower-cost rental options, the institution generating that demand should participate in creating additional housing capacity.
That does not automatically mean building more dormitories.
The solution might be additional university housing. It could involve partnerships with private developers, university-supported off-campus housing, land contributions, joint development efforts or coordinated housing development with local governments and community organizations. Different markets will require different solutions. The principle should be the same: Count the entire student housing demand. Measure its impact on the surrounding housing market. And where that demand creates housing pressure, make the institution generating the demand part of creating the capacity needed to address it.
For those of us who work in public and affordable housing, the underlying lesson is familiar. Housing problems rarely respect the administrative boundaries we create for them. People move between neighborhoods, housing types and markets regardless of which institution considers them its responsibility. Student housing is no different.
Universities do not have to house every student, and cities do not have to assume responsibility for university housing. But an institution that brings thousands of people into a community cannot treat the resulting housing demand as unrelated to its own growth. The housing market does not know where the campus boundary is. Our housing planning should stop pretending that it does.
