Atlanta Student Housing Rents Slip As Students Flee Higher Costs
The soaring cost of student housing has pushed Atlanta’s collegiate population to the conventional apartments that have flooded the market.
While university students generally prefer to live in a complex together, they are being lured to multifamily by landlords offering concessions like multiple free months of rent, industry players said at Bisnow’s Atlanta Student Housing Summit Wednesday. That has forced student housing owners to drop their own rents in response.
“You’re seeing probably a greater mix of students and nonstudents kind of throughout Atlanta than you ever have previously,” Andy Feinour, the CEO of student housing developer Student Quarters, said onstage at the W Atlanta Downtown. “Temporarily, it is depressing rents and is making development harder to pencil.”
Student housing rents declined across the U.S. during the second quarter from their all-time highs. The average rent per bed across the nation was $905 per month as of July, down from $909 in June and off from the all-time high of $918 set in March, according to Yardi Matrix Director of Research Tyson Huebner.
The drop for units around Georgia Tech and Georgia State University was even more dramatic. After hitting all-time highs of $1,300 per bed in October, rents around Georgia Tech have since dropped 7.7%, according to Yardi. Around GSU, which reached a high-water mark in January of $1,179, rents have fallen 14%.
Feinour acknowledged that rents in student housing properties climbed beyond what the market would bear.
“I think the industry has been searching for where that limit is. And I think over the last three years, we've pretty much found it,” Feinour said. “We've got to get more creative, and we've got to think about things a little bit differently, still creating high-quality options, but mom and dad can still afford it.”
Part of why rents are falling is because of fresh competition.
Developers poured out more than 18,500 new apartment units in Atlanta in 2024, according to RentCafe. Another 15,800 units remained under construction in the metro area as of the second quarter, with apartment vacancy rates close to 12%, according to Lee & Associates.
Rents on conventional apartments fell by more than 3% year-over-year in the first quarter to $2.17 per SF on average, according to Haddow & Co. data. Stripping out newly delivered units during that period, rents dropped 5.8%, Haddow Vice President Allen English told Bisnow.
While student housing rents also include utilities, they exceed traditional unit costs. The average student housing unit in Atlanta rented for $3.34 per SF as of Haddow's last student housing survey in midyear 2023.
Toll Brothers Campus Living Vice President Richard Keyser said student housing performed well in Metro Atlanta before the past year because of fundamentals in the larger apartment market. Toll completed its 752-bed Kinetic student housing tower near Georgia Tech last year.
“One of the reasons why you saw great runway from student housing in the Atlanta area was because of the market-rate rents, you know, going so fast, so high,” Keyser said.
But with supply now outweighing demand in market-rate units, they have become more compelling than student housing units.
At the end of June, three-quarters of apartment landlords in Atlanta were offering concessions to renters of at least two months free, English said.
It's beginning to have an effect — 22,600 apartment units were absorbed in the second quarter, the most in two years, according to Lee & Associates.
“Student housing rent growth has been way above historical norms for multiple years,” Landmark Properties Managing Director Andrew Costas said. “So, moderation doesn’t mean negative. It means it’s still growing, but it just has slipped down somewhat.”
Pressure on student housing landlords is unlikely to abate anytime soon.
The U.S. immigration and visa crackdowns will likely put near-term pressure on student housing demand with international students who may not return to school, Yardi's Huebner said. The dynamic has impacted student housing operators in Atlanta.
“Because Georgia Tech has a lot of international students, that is making the margin a little bit weaker because we’re not sure all of them are going to return,” he said.
Michael Sanseviro, GSU’s vice president of student engagement, said the impact of the student loan reforms from President Donald Trump’s One Big Beautiful Bill Act also could make it more difficult for families to pay sky-high student housing rents since it caps the amount of money students can borrow for education.
“Parents are a major factor. They are getting to a point where not only are they saying this is too much, they may be in a position where they just don't have the options,” Sanseviro said. “And when you look at the fact that there are now greater or will be greater caps on their loan abilities and their other finance options, that is absolutely going to change the trajectory.”
