Chapman students living off-campus can expect their rents to increase at least 2.5% by 2020, according to a University of Southern California (USC) report. The squeeze is occurring at the same time that new students will be required to live on campus – and be subject to Chapman’s own housing costs – for two years instead of one.
The average monthly rent for in Orange County is expected to rise by $52 to $2,087 next year, according to the USC report.
Students need to prepare themselves for higher off-campus housing costs next year, according to Marshall Toplansky, Clinical Assistant Professor of Management Science, so living in university housing an extra year may spare students from having to face the outside market forces.
“We’re in the midst of the worst affordability crisis for housing in California history,” Toplansky said.
While the surge in housing prices may have slowed, roughly a quarter of the population can afford to buy the median price home in Orange County, Tolansky said. The median home price is about $725,000, according to Zillow.
This affordability crisis is not limited to low-income houses, according to the USC report. It’s predicted that renters will suffer from increased prices and there won’t be enough units being added to the market.
Increases in monthly rent will also rise the Orange County vacancy rate, which is projected to be 4.56% by 2020. This would give Orange County the highest vacancy rate in all of the Southern California metro markets, the report states.
The rent hikes are occurring against a backdrop of decreasing home prices. Prices in Orange and its neighboring cities, Anaheim and Villa Park, have fallen six percent this year, as a result of inflated housing prices and economic certainty, according to data on CoreLogic.
The lack of affordability is what’s driving down sales, Toplansky said.
The market can be affected by several factors with location being a front runner, said Orange County realtor Nancy Murphy.
“The main thing we’re seeing now is an increase in interest rates, which makes buyers want to wait, especially in an area so heavily populated with students,” Murphy said.
As a result of buying properties at such elevated prices, landlords could have higher costs and will raise rental prices to cover these costs, according to Toplansky.
Students living on campus for an additional year could have an advantage because they will surpass the stress associated with coordinating an off-campus living arrangement, Toplansky said. While there are complaints about the cost of Chapman-provided housing, at least costs are known upfront: Off-campus costs have can also cost more for some students, depending on their rental arrangement.
“At least the university doesn’t have to raise its prices because they own the land,” he said.
Although Toplansky doesn’t foresee Chapman’s on-campus housing prices increasing as a result of the current housing market, the cost of living in the residence halls is not cheap. The least expensive option is a double bedroom in North Morlan Hall, $10,400 for the academic year, according to the 2018-2019 housing rates.
In Chapman’s apartment housing options, rates range from $5,804 apiece for three residents in a Harris Apartment unit to $24,734 for a single bedroom apartment in Glass Hall, according to the 2018-2019 housing rates. Students living in apartments can opt out of the meal plan.
Students can view their housing options with prices on the Chapman housing website, though the prices are subject to change each year.
The university increased the on-campus living requirement to two years is because there is significant research over the last 30 years linking the residential experience with improved outcomes in higher education, according to Dave Sundby, Director of Davis Community Center. These outcomes include retention, higher GPA, persistence to graduation, graduating in a shorter time and more, he said.
But being at the mercy of Chapman is no better than being at the mercy of the open market, say students who resent being deprived of choice. “I hate the idea of having to live here another year,” said Maggie Kabilafkas, a freshman political science major. “It seems like another way for Chapman to squeeze more money out of me.”
“Having to live on campus for two years doesn’t give students the opportunity to venture out and look for possible cheaper options,” said freshman political science major Giovanna Potestio. Potestio and Kabilafkas are members of the Class of 2022 – which is the first class required to live on campus through their sophomore year.
McKenna Sulick contributed to this report.