Report: Off-Campus Occupancy Could Take A Hit Amid Growing University Housing Requirements
In recent years, a number of universities have changed their policies to require more undergraduates to live on campus. The shift could have a sizable impact on the student housing industry if it becomes more widespread.
RealPage conducted a recent study of housing requirement changes at a handful of universities to assess their impact on local student housing markets. Among the 175 universities tracked by Axiometrics, a RealPage company, 101 had living requirements in place for the fall 2018 semester.
The majority of these schools, 74, require freshmen to live on campus, while 26 of these universities also include sophomores. Only one — the University of Notre Dame in Indiana — now requires that juniors live on campus.
Changes to housing regulations at four other universities during the fall 2017 semester provide clues about how on-campus housing requirements might affect off-campus housing markets this year, according to the report. On average, those schools saw occupancy among on-campus housing increase 690 basis points during the last school year, while off-campus occupancy took a hit of 140 basis points.
At New Mexico State University, off-campus student housing supply available for NMSU students that fall showed a decrease of about 690 basis points in occupancy from August 2016 to August 2017, much of which can be attributed in part to an on-campus living requirement that was established that year, Axiometrics said. This brought occupancy in the school’s on-campus housing to 90.7% — a whopping 1,860 basis-point increase from the previous fall.
The more than 6,700 off-campus beds at the University of Oregon may have also felt the impact of new living requirements. Privately owned student housing occupancy averaged 87.5% in 2017, down 120 basis points compared with the August 2016 average occupancy.
New housing rules don't always drive off-campus occupancies down, especially as enrollment grows. Privately owned student housing at the University of Alabama at Birmingham, which also has housing requirements in place, experienced an increase in demand in August 2017. Average off-campus housing occupancy was up by 300 basis points to 95.7% compared to August 2016, the report explained, with the increase due in part due to overall UAB’s enrollment growth.
This year, even more universities changed their residency requirements. Notre Dame’s new junior residency requirement makes the university one of four that implemented new on-campus living requirements this fall.
The other three are Louisiana State (incoming freshmen), San Diego State University (freshman to sophomore) and the University of New Mexico (incoming freshmen). Last year, Notre Dame required only freshmen to live on campus.
“We could expect these changes to [have an] impact on off-campus occupancy, at least in year one, and a bigger impact when enrollment isn’t growing," Axiometrics Director of Student Housing Taylor Gunn told Bisnow in an email.
"But implementing a freshman living requirement can also have a longer-term impact on student success and potentially enrollment growth, which would be beneficial to the off-campus market. A longer requirement, like at Notre Dame, is where we could have some longer-term demand concerns.”