A Comparative Study: Student Rental Rates v Non-Student Rental Rates in College Towns

Open Access
- Author:
- Harries, Kaitlyn
- Area of Honors:
- Risk Management
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Mallory Marie Meehan, Thesis Supervisor
Brent William Ambrose, Thesis Honors Advisor - Keywords:
- Real Estate
Student Housing
Rental Rates
Risk Management
Affordable Housing - Abstract:
- This paper aims to compare different rental rates charged to students and their non-student counterparts in college towns. College towns are defined as an area that draws the majority of their economic activity from a nearby institution and more than 30% of the population is comprised of students. Previous literature is utilized to understand the concept of housing affordability, the student housing sector and its growth as an investment class, how rental rates are configured, and regulations in the college towns included in the sample. The study examines State College, PA; Morgantown, WV; and Madison, WI. Each town’s demographics are examined along with specific regulations and construction currently in the pipeline for student housing. The main analysis of the paper is a series of two sample t-test determining whether the rental rates charged to students and non-students are statistically significant in their difference. Tests were run on 2019 data and 2020 data to account for differences resulting from the pandemic. The results overall did not provide conclusive evidence that rental rates charged are statistically significant, meaning students are not perceived to be charged more than traditional multifamily. While the results were inconclusive, further study should be taken because given the relatively small sample sizes, the difference may not have been captured. Also, studies into more college towns could provide a regional difference to determine if the rental rates differ across the country or only in certain areas. It is also important to conduct further research because student housing is an expanding asset class that is predicted to continue to grow in the near future.