An Analysis by Keegan Kelly
STUDENT HOUSING IN NEED OF EXTRA HELP
Given the COVID-19 induced economic downturn and questions circulating about whether it is safe to send students back to campuses this fall, colleges and universities and subsequently the student housing sector, are left in a precarious position. Even with government intervention in the form of the Higher Education Emergency Relief Fund, some smaller colleges and universities may not weather the prevailing economic hardship of this downturn and will likely close permanently. Meanwhile, some schools with large endowments such as Harvard, Princeton and Yale, have turned down relief money but still fear hefty shortfalls in revenue this year especially as options are weighed on returning to in-person classes this Fall. Most schools have asserted their decision to reopen will be announced in either June or July.
Student Housing Vacancy and Growth
Source: Moody’s Analytics REIS
One large institution has already announced plans to continue with primarily online learning through this fall: the California State University system. With 23 affiliated schools, the California State University system enrolled over 480,000 students as of the Fall of 2018 according to their website. According to an article in the New York Times, at many of these California State schools, 80 percent or more of the students live off-campus. Student housing will therefore be particularly hard hit in California metros. However, uncertainty surrounding reopenings is widespread and the revised outlook for the student housing sector indicates that fundamentals will suffer throughout the nation come Fall of 2020…
Keegan Kelly is an Associate Economist at Moody’s Analytics REIS.