In the Age of COVID-19, Students Continue to Pay Premiums for Proximity to Campus
So far, the global pandemic doesn’t seem to have deterred students from wanting to live in denser housing options closer to campus, as those beds are still commanding a significant rent premium for the Fall 2020 semester.
Students living within a half-mile of campus should expect to pay $757 per month, on average, in the fall, according to May effective asking rents across the 175 core universities tracked by RealPage. Students living within a half-mile to one mile from campus should expect to pay $612 per month next fall. And those living farther than one mile from campus will see the lowest rents at an average of $570 per month.
In total, rents for the fall 2020 academic year average $694 in May.
How the global pandemic will impact typical college behavior remains to be seen. Fear of density, for example, could discourage students from choosing to live in denser housing near campus as the leasing season progresses – particularly if the COVID-19 situation worsens in the months ahead. On the other hand, students – especially in the biggest schools in urban areas – could also become cautious to cash in on the bargains of living far from campus if it also means taking public transit or paying for a pricey parking permit to get to class.
So far, however, leasing trends are following previous years’ patterns. Pre-leasing for the fall 2020 school year is strongest in properties less than a half-mile from campus. As of May, properties within a half-mile of campus in the RealPage 175 universities were 73.3% pre-leased. Properties a half-mile to one mile from campus were 64.9% pre-leased, and those more than one mile from campus were 63.4% pre-leased.
Overall, the RealPage 175 universities were 69.6% pre-leased in May. That figure trails last May’s rate by about 390 basis points.
While it was possible earlier in the pandemic that students were taking a wait-and-see approach to next year’s housing, that seems less likely now. Only 11% of the RealPage 175 universities have yet to announce their plans for next fall. About 62% have said in-person classes will resume, with another 23% using some kind of hybrid model involving both in-person and virtual classes. Only 4% of the RealPage 175 universities will resume remotely in the fall.
For more on how student housing’s leasing season is shaping up, catch the recent RealPage Summer Student Housing Update webcast.