Wednesday, April 6, 2011

CSU Students Find Housing Scarce

This spring, students at Colorado State University are facing a drastically changed rental housing market from recent years. Most of the "Move in Specials" are gone. It's harder to find a landlord who will accept a pet. And the supply of available apartments, condos and rental houses isn't what it was just a year ago.


In fact, the Northern Colorado Business Journal recently reported that the Fort Collins apartment vacancy rate fell to 4.2% (5% is considered normal) and unlike most other areas of Colorado, the median monthly rent in Fort Collins rose from $821 a year ago to $872 currently.


Three major factors in the local market are driving this trend.


First, there has been a lack of new construction of apartments, condos and homes due to the unavailability of construction loans. New construction starts are off 70% from the peak building years in the mid-2000's and not are expected to begin a recovery until 2012. This leaves Fort Collins with a large deficit of new rentals.


Second, more families have had to turn to renting as they lost their homes to foreclosure or short sales. Unfortunately, a number of families facing the financial hardship of losing their home, also experience a family breakup which creates the need for two rental properties to replace the one home they had.


Third, the population of Fort Collins is continuing to grow from the outside. Colorado State University targeted 25,000 as the number of full time students it wanted to have on the Fort Collins campus. Now, with the recession causing people to go back to school in larger numbers and with record numbers of freshman applications, CSU is looking at nearly 27,000 students to serve and forecasting as many as 30,000 students in the next few years.


All those student need a place to live and neither Colorado State University nor the City of Fort Collins currently has a plan in place to house that many newcomers. As a result, rents for students this spring have jumped from the $300-$400 per bedroom range last year to $400-$500 per bedroom and rising.


At the new rent levels, the market for buying a house or condo for a CSU student to share and rent out bedrooms to friends is making sense again. Over the long term in Fort Collins, it has been one of the few ways to make the costs of college less painful.