University of Nevada betting on more live-in students
The University of Nevada in Reno (UNR) is about to flood the local housing market with almost 1500 new student beds. The growth comes at a time when higher education expenses have been skyrocketing and the assumption is that there is an untapped source of new students who have the resources to pay even more to attend and live near UNR.
UNR Published Enrollment Data and Projections – Nov 2012
In October, University President Marc Johnson predicted that the school would grow Fall enrollment from the current 18,000 students to 22,000 by 2021 with an annual growth of 400 students per year. President Johnson’s prediction closely matches the average growth in student enrollment over the past fourteen years; however, this growth assumes every new student will be seeking on campus, or near campus housing, which is implausible.
Ironically, eleven months prior to the President’s remarks, the university published past and projected student enrollment growth that contradicted his version of UNR enrollment growth. The projected growth averages less than 300 students per year, falling over 1,000 students short of President Johnson’s 2021 prediction. The November 2012 data remains on the UNR website.
Expecting significant growth in student enrollment is betting against the odds according to a July article in the New York Times (July 25, 2013)
“College enrollment fell 2 percent in 2012-13, the first significant decline since the 1990s, but nearly all of that drop hit for-profit and community colleges; now, signs point to 2013-14 being the year when traditional four-year, nonprofit colleges begin a contraction that will last for several years.“
900 bed Sterling student apartments will open this Fall
Outcome of Sudden Increase in Student Beds
One of two scenarios are possible as the university waits for new enrollment. The first scenario involves new beds remaining empty as students balk at the increased rental fees for the new properties. This will result in a loss in revenue for the university and the leasing companies of the new housing units.
The second scenario would be that students in rental houses and apartments, move into the newer facilities, which would devalue the current leasing rates in the local economy as the vacancy rate rises. The reaction by some investment properties owners might be foreclosure as owners walk away from money-losing properties.
UNR Losing Reputation as Quality School
President Johnson may be relying on picking up students from California due to large increases in tuition costs increases in recent years; however, the belief that the quality of education at UNR is of equal value to California schools assumes that students and parents are uninformed.
View of UNR’s dormitory row to be joined by new 400 bed unit in 2015
In 2003, UNR, Georgetown, Utah State, and San Diego State University ranked in the top 300 of Shanghai Ranking Top 500 Academic Ranking of World Universities. UNR’s ranking dropped almost every year, and dropped off the top 500 list for the last two years in a row. The other three universities also dropped; however, Georgetown and San Diego State ranked only slightly lower during the past two years than in 2003, and Utah State dropped out of the top 500 in 2011, but has been in the top 500 for 2012 and 2013. In 2013, California had eleven universities in the top 500, with eight in the top 50.
A silver lining to the Silver State’s UNR?
While the need for this surge of student housing is questionable at best, will result in student beds at higher prices than currently available, and may trigger a local foreclosure crisis, there may be a positive outcome for the university neighborhoods.
If students leave the rental houses, causing a crash in rental prices, and if owners of investment properties walk away from their rental units, the area housing prices will drop. That will open the door for the redevelopment of the sixty-year-old neighborhood with updated houses that would attract families back to the area.
There is much at stake over the next five years for students, homeowners, investment property owners, and the community in general as UNR takes a big risk on short odds.