The National Multifamily Housing Council’s Research Foundation, based in Washington, D.C., recently released a new report on the country’s student housing market. “The U.S. Student Housing Market: On-Campus, Student Housing and Student-Competitive Properties” report is authored by Paige Mueller and Jeffrey Havsy, both of Eigen 10 Advisors LLC, a real estate consulting firm based in San Francisco. Mueller is the co-founder of the firm, and Havsy is a strategic advisor.
The report examines an industry that builds housing for the more than 22 million students now enrolled in post-secondary education institutions while exploring key opportunities in the sector. Some of the key findings include:
- It is estimated that student housing rentals represent approximately 7% to 12% of the total U.S. rental housing market.
- There have been significant changes in this sector, both on the demand side in terms of student diversity and growth patterns and on the supply side in terms of evolving building formats and amenities as the market evolves. Currently, 8.6 million students need rental housing near campus.
- The post-secondary student population is highly diverse—40% of undergraduates are older than 23, and nearly half are financially independent from their parents.
- Student housing rental growth remains positive in the 1.5% to 2% range on average. In terms of new construction, new beds have been concentrated in a few universities consistently during the past few years, as the Top 10 schools account for 30% to 40% of new beds each year.
While some schools are facing declining enrollments, others are experiencing housing shortages. The big picture analysis points to change and opportunity as the report notes, “the physical structures provided by both universities and private owners have change significantly over time as the market has become more institutionalized. Yet significant opportunities remain as a large part of the market remains in the hands of non-institutional owners of small properties. Perhaps even more so than for other housing types, affordability remains a key issue going forward.”
The report goes on to examine opportunities and how they relate to the key issues of high-growth markets, building unit counts, affordability, double occupancy, amenities, and mixed-use buildings. The full report can be downloaded here.
