Real rent per bed for purpose-built student housing increased by 24% from 2013-2020, outpacing both income and tuition increases. This first-of-its-kind study by authors Jack Liebersohn and Jason Lee examines the factors driving rent increases in the purpose-built student housing market.
Their research finds the rent increases observed over the past decade in purpose-built student housing are not due to something specific to the sector, such as changes in enrollment or tuition levels. Instead, they are related to overall rent increases in the broader U.S. rental market.
- Student housing has become less affordable since 2013. Whether benchmarked against tuition or median incomes, housing costs have increased more in inflation-adjusted terms. But so has market-rate housing.
- On average, one new bed is built for each new student enrolled, which means rising enrollment levels do not push rents higher.
- However, a significant association exists between rent-per-bed in the student housing market and affordability measures in the broader market. Overall, a 10% increase in local rents is associated with an 8% rent increase in purpose-built student housing.
- Regional variations exist, such as higher rent increases observed in the Northeast, but the overall trend of rising rents was consistent across regions.
- Rents are higher in areas with greater regulatory barriers and legal constraints on new construction.
- Policies that make housing affordable in general will also make housing less expensive for students.
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About the Authors
JACK LIEBERSOHN, PHD
Jack Liebersohn is an Assistant Professor of Economics at the University of California, Irvine. He does research on housing markets, commercial real estate and affordable housing. He received his PhD from MIT in 2018. You can learn more about him at his website, jackliebersohn.com.
JASON LEE, PHD
Jason Lee is an economist studying competition and banking. He received his PhD from the Ohio State University in 2022.
- Jack Liebersohn
University of California-Irvine
- Jason Lee
Ohio State University