As College Begins, Some Students Are Scrambling For Housing

Middlebury is paying students $10,000 to take the semester off. Other schools are housing students in everything from trailers to rooms at a casino resort—or leaving them to fend for themselves.

_{By Alex Perry, Forbes Staff}

Priscila Sepulveda is set to begin her junior year as a film major at the University of California, Berkeley on August 23rd—if she can just find somewhere to live. “Sleeping in my car and being homeless is probably my only option right now since family housing for Berkeley is out of reach for the fall,” says the 23-year-old, who lost her spot in the school’s housing queue for married students when she took last year off to live in San Diego, where her husband was stationed with the Marines. College administrators are telling her not to expect housing until October, at the earliest, she reports. Problem is, if she takes the semester off while waiting for housing, she’ll lose her place in line again. “I was excited to come back to school but now it just feels like school is only stressing me out,’’ she says.

As millions of college students happily move into their campus or off-campus digs, some of their peers still don’t know where they’ll be living during the fall semester. Being admitted to a university does not necessarily guarantee campus housing; schools typically plan to house just 25% to 35% of students on-campus with an emphasis on providing beds for freshmen and sophomores, says Daniel Bernstein, president and chief investment officer at Campus Apartments, the student housing development company led by billionaire David Adelman.

So many juniors, seniors, transfer students and grad students have traditionally been expected to find housing off-campus, whether they wanted to or not. But this year’s housing scramble is being exacerbated by two trends that began to emerge last year.

First, off-campus rents have gone through the roof—nationally, they’re averaging $2,062 a month, up 28% from $1,614 at the start of 2021, according to rental data from Zillow. That raises both demand for on-campus housing and the difficulties students face when they can’t get it. Second, some colleges are seeing enrollment tick up after a pandemic-induced decline during which many students opted to take a year off or delay the start of their college educations.

That post-pandemic bump is part of the problem at Middlebury College, an elite liberal arts school in Vermont that requires all of its 2,800 or so undergraduates to live on campus, unless they get special permission. Because so many students took time off during the pandemic, Middlebury’s junior and senior classes are larger than normal. So earlier this month, administrators announced a $10,000 stipend for upperclassmen willing to take a voluntary leave of absence for the 2023-24 fall and winter terms. The school said it had considered converting other buildings at the historic campus to residential use, but found doing so quickly wasn’t practical, given the need, for example, to have fire sprinkler systems installed in housing.

So far, the college has received 63 applications for deferral, and about 40 students are expected to participate, reports AJ Place, associate dean of students for residential life at Middlebury. Along with the cash, students who choose to defer will receive preferred status for housing selection in the spring. Middlebury also chipped away at demand for on-campus housing this fall by offering a new study abroad program for freshmen that allows them to spend their first semester in Copenhagen, while retaining all their financial aid and taking such first year seminars as “The Cultural Psychology of Happiness.” Usually, students aren’t allowed to study abroad in their freshman year. Those doing the Copenhagen stint will receive a $500 per month food stipend and $1,500 to cover airfare—far more generous terms than Middlebury usually offers for study abroad.

Middlebury’s housing crunch is in part temporary. But some public universities, especially those in the south and southwest, are dealing with longer term enrollment surges—a function of regional population growth and more students wanting to attend their own state schools to avoid taking on excessive debt or to be nearer to family.

The University of Tennessee in Knoxville, which charges state residents $11,332 in undergraduate tuition a year, met excess housing demand last year by renting out a nearby Holiday Inn—students dubbed it the Voliday Inn, a play on the school’s Volunteers sports teams. But with class size, the percentage of students who want to live on campus and the time kids take to graduate all continuing to rise, the school has now made longer term arrangements. In May, UT announced it will build 2,500 new campus beds in a public-private deal. Meanwhile, it has signed a five-year contract with an apartment complex five miles from campus that will immediately add 192 beds (and later even more). The complex will be served by UT’s transit service, which runs every 20 minutes on weekdays and roughly every hour on weekends.

“It’s a stressful situation not to have anywhere to sleep when you’re trying to get your education, especially if it’s supposed to be such a prestigious school.”

A tad inconvenient? Maybe. But better than the connections being offered to the 23 students being housed at the Bear River Casino and Resort, 6.5 miles south of the College of the Redwoods, a public community college in Humboldt County, in the far north of coastal California. The hotel is providing them one shuttle bus to the campus at 8 a.m. and one home at 8 p.m., and only on Monday through Friday. The nearby California State Polytechnic University, Humboldt is sending nearly 100 students to the Comfort Inn hotel, about two and a half miles from campus. One consolation for the hotel exiles: A double room at the Comfort Inn costs $6,624 per year, while the cheapest on-campus double goes for $6,972.

Other schools have turned to temporary on-campus solutions, rather than local hotels or semesters in Copenhagen. Virginia State University, a historically Black institution which has seen a surge in enrollment over the last three years, is now setting up prefabricated modular buildings near its regular dorms to house 268 students in what it’s calling annex units. In announcing the plan, the school answered the question “Are the units the same as trailers?” this way: “The units are temporary and were pre-constructed before delivery. They will contain the same amenities as our traditional residence halls.” As to the rationale for relying on trailers, VSU President Makola M. Abdullah pointed to the “nationwide shortage of affordable off-campus housing” and the school’s commitment to provide opportunity to all students who want to attend. In a Facebook post this month, the school, located 24 miles south of Richmond, bragged that “every student who has submitted a VSU housing application will receive a housing assignment.”

Unlike VSU, California’s public colleges have made no commitment to housing all comers. With its chronic housing shortage and high rental prices, the state has a dramatic student housing crisis, with students sleeping in their cars and even on the streets. A 2020 report by University of California, Los Angeles researchers concluded that 1 in 5 of the state’s community college students, 1 in 10 California State University students and 1 in 20 students at the University of California campuses have experienced homelessness. Suzanne Wenzel, a professor at the University of Southern California’s School of Social Work who has studied homelessness, observes that the housing crunch can lead to a cascade of problems for students. “Homelessness and housing instability when students can’t afford a stable and decent place to stay is also often paired with food insecurity and poor nutrition, which adds yet another layer of difficulty for a student,” Wenzel says. That stress, in turn, has an adverse effect on academic performance.

Even campus housing isn’t cheap in the California system. For in-state undergraduates, tuition at UC Berkeley, one of the nation’s top colleges, is a comparative bargain—$15,600 this coming year. But living on campus (including a meal plan), costs freshmen an additional $16,000 to $20,000 per year. The Berkeley family housing that film major Sepulveda is wait-listed for, runs $1,695 a month for a one bedroom, no food included. That’s cheap compared to private market housing in Berkeley, situated on the eastern shore of the San Francisco Bay, which remains one of the most expensive housing markets in the country despite a recent fall in rent there. One-bedroom apartments now available in Berkeley are asking a median rent of $2,200 a month, 35% above the national median, according to Zillow.

Since California schools don’t provide backup plans for those wait-listed for university housing, students are often left scrambling to sublet and pleading on social media groups for a room. In a final attempt to secure housing, Sepulveda did just that, putting out feelers in a Facebook post within the UC Berkeley Off-Campus Housing group and indicating that she would leave whenever campus housing finally opens up for her. So far, no luck. “It’s a stressful situation not to have anywhere to sleep when you’re trying to get your education, especially if it’s supposed to be such a prestigious school,” Sepulveda says. Given “the immense amount of money that it costs to go into that school, you would think they would accommodate and find a ‘meanwhile’ situation.”

Megan Chung, an incoming master’s student at UCLA studying electrical and computer engineering, has been on the waitlist for graduate on-campus housing since the list was released in early July and has also resorted to Facebook pleading. “My place on the waitlist seemed realistic until my position stopped moving for the past two weeks,” says Chung, 22. She’s frustrated that the school didn’t notify her earlier that she wouldn’t get housing and is now looking at the last minute for someone to share an off-campus apartment, preferably within walking distance of campus. Getting her own place doesn’t seem realistic: Median rent for a one-bedroom apartment in the Westwood neighborhood, where UCLA is located, is down, but still a pricey $2,895, according to Zumper.

In recent years, some affluent parents have bought off-campus apartments and houses for their kids. But that startegy is less appealing now that 30-year fixed mortgages are topping 7%, their highest level in more than 20 years.

In recent years, some affluent parents have turned to another method of securing shelter for their college-going kids. They’ve found it made financial sense to buy apartments or houses near campus for their progeny. Bradley Hilton, founder of Sonas Financial Planning in Atlanta, says that a few of his clients have taken this route, looking at it as a way to both avoid steep rents for their kids and to earn additional income from an investment property. “They all went for a multi-bedroom unit, whether it’s a condo or house,” Hilton says. That way, they can collect rent from other people’s kids, helping to subsidize the mortgage payments and sometimes even achieve positive monthly cash flow.

But with 30-year fixed mortgages now topping 7%, their highest level in more than 20 years, that strategy too is under pressure this year. Even for families who can afford it, high interest rates are “making that option a little less attractive,” says Ryan Galiotto, founder and lead planner at Etch Financial, in the Pittsburgh, Pa. area.

What about saving money by having your college kids live at home? “Most of the students that are graduating high school and going to college now, they spent most of their high school years in virtual classrooms because of Covid,” Galiotto observes. “What they’re saying is, ‘I spent most of my high school years in a virtual classroom. I really want this in-person experience now.’”

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