Playbook #058: Student Housing
🖼️ The Big Picture
Student housing is a subset of the residential and multifamily housing markets with slightly higher returns and a recession-resistant model. In fact, college attendance has increased in every recession since 1960, despite rising costs.
With the massive growth of the gig economy and online courses (as they offer alternatives to a college education in some cases) and the challenges the pandemic posed, some might believe this is a declining sector.
However, the data shows that’s not the case. There was almost no impact on off-campus housing during the pandemic, as students preferred to remain living near campus with their friends. College enrollment has in fact declined every year from 2009 to 2019, however, it has grown slightly in 2020 and 2021.
Plus, government bodies seem committed to making higher education more accessible. New Mexico recently signed legislation to make college tuition-free for most New Mexicans. The Biden administration has stated they’re seriously looking at canceling some portion of student loan debt.
While younger generations will likely continue to find ways to earn a living without university, there will always be a need for higher education institutions, and all signs point to a thriving student housing sector - with relatively stable returns for investors - for the foreseeable future.