My View: For the Most Part Off-Campus Housing Is More Affordable Than On-Campus, but Again We Mostly Need Supply

West Village

By David M. Greenwald

Davis, CA – A few years ago, the Vanguard did a series of analyses on on-campus housing versus off-campus housing for students.  One thing that we clearly found is that it is much cheaper to live off-campus than on-campus.

The residence halls that we toured had extremely small personal space, but charged upwards of $1000 per month.  But even the on-campus apartments were considerably more expensive than comparable housing off-campus.

Earlier this week, someone made the claim that “new housing on campus (in the form of The Greens) offered less-expensive rent than new housing in the city (Sterling), which is the opposite of what’s been claimed on this blog.”

However, the ensuing discussion demonstrated that the math behind that claim was mistaken.

The opposite is actually true when we look at the accurate math, and this illustrates the point we were making a few years ago.  When you take into consideration that Sterling does not offer doubled up room options, is new private housing, and is among the most expensive in the city, the analysis bears out the point still that the private sector can meet housing demands for far less than the university.

For the fall it appears that there are two options available.  One is a single room in a four-bedroom, four-bathroom apartment.  That will run just over $1300 per month.  For a similar room in a five bedroom, it’s slightly less at $1200.

When we look at Greens, it is considerably more expensive.  When you look at the costs, they have the annual fee listed but that is simply three quarters, not the summer.

You can live in a shared room in a shared apartment for $1000 per month.  That’s an option not available at Sterling.  But for the same arrangement as at Sterling, it runs you a whopping $1541 per month.  And for a studio, which means you have your own apartment, it runs you nearly $2250 per month.

The problem is that this is not necessarily an apples to apples comparison.  The Greens costs are comparable with other UC Davis apartment costs, while Sterling, as we mentioned at the beginning is at the top end of the scale.

So let’s look at the University Housing Survey.

The average studio in 2020 would cost you $1229 per month.  A one bedroom costs about $1498 per month.  A two bedroom, $1909 per month.  And a three bedroom $2610 per month.  But the averages don’t tell the whole story, because there is a huge range in cost—you can still get some older singles for as low as $800 or $900 per month, and you can share two- to four-bedroom apartments and end up paying as low as $600 per month or less if you double up.

Those are for unit leases and you can see once you start adjusting the rent to the appropriate number of people or doubling up the rooms there, the price falls by a lot.

Not every student wants the cheapest price.  Some would undoubtedly pay more for additional privacy.

In addition, when you look at the bed lease rates you see that, as you go up in size of the apartment, the bed lease rate drops from about $1300 in a one bedroom to $916 in a four bedroom.

The bottom line—the math is pretty clear.  Sterling is actually less expensive than comparable on-campus housing.  Sterling is at the top end of housing costs off-campus.  And Sterling lacks options to double up and still is more cost effective than comparable on-campus housing.

Personally, I see advantages of both types of housing.  One point that made a huge impression when I started talking with students groups about housing—most students want to eventually live off campus and be more part of the community.  But many did say that having a second year option on campus was a good idea because of the tight turnaround from September of one’s freshman year to January when they have to lock up their housing.

I definitely support getting to 50 percent on-campus housing.  Not every second year student wants to live on campus, but between international students who might benefit from it and some students who want to live on campus all three years, there is some advantage there.

At the same time, I keep hearing from the *adults* in the community how expensive the new housing is, and that was the point of this short piece.  When these projects come up for approval at Planning Commission and at Council, the people complaining about costs of the housing or that it’s too expensive are almost never the students who actually rent, it’s usually the *adults*—many of whom haven’t rented in Davis in decades.

Student complaints are about the cost of rents going up—which they have.  The 2020 rental rate was 2.2 percent higher than in 2019, which was 4.7 percent higher than 2018, which was 8.5 percent higher than 2017.

Students worry about several things—lack of supply, housing insecurity, the number of students who are without permanent housing and negligent landlords.  Most believe that with additional supply and additional choices on their part, many of these concerns will be alleviated.

My personal belief is that by expanding supply we can do two primary things: (1) slow the increase in rental rates, and (2) get away from a 0.2 percent vacancy rate and toward a more healthy 5 percent.

It looks like Sterling is having no trouble filling for the fall—even though it is among the more expensive options off campus.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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30 Comments

  1. Keith Olsen

    The problem is that this is not necessarily an apples to apples comparison

    We know, Craig Ross said the same thing twice in the comments you’re referring to:

    Craig Ross July 22, 2021 at 10:06 am
    “The purpose of my original comment (in the other article that David is referencing) was to show that new housing on campus (in the form of The Greens) offered less-expensive rent than new housing in the city (Sterling), which is the opposite of what’s been claimed on this blog.”
    But a lot more than housing in most places.  I mean they are charging $1000 per month to share a room.  That’s not inexpensive.  In way by comparing Sterling to Greens, it’s not apples to apples.

    Craig Ross July 22, 2021 at 11:16 am
    A shared room in Green is $3056 per quarter, $9168 for the year.  3 * $3056 is $9168.  Therefore it’s for three quarters or 9 months not twelve.  You can’t even admit your math was wrong
    There are no shared rooms in Sterling.
    You are accusing others of being wrong but don’t know the facts here.  This is not an apples to apples comparison.

      1. Bill Marshall

        “Paraphrasing”… oft used to ‘cherry-pick’… in this instance, have no judgement, as to whether it applies…

        But several frequent posters have done so (‘cherry-pick’ and/or ‘paraphrase’), many of those, time and time again…

        The “new normal” (?)…

  2. Tim Keller

    My personal belief is that by expanding supply we can do two primary things: (1) slow the increase in rental rates, and (2) get away from a 0.2 percent vacancy rate and toward a more healthy 5 percent.

    100%.

    I would say the same about the general housing market.    We don’t need to build so quickly that housing prices go DOWN, but managing our supply situation so that there IS an appreciable vacancy rate is a worthy goal.  5% will be great, but I would take 3%.

    1. David Greenwald

      Exactly. We really aren’t going to reverse prices unless there’s like massive surplus like last year probably. But if we slow the rate of increase we can reduce the impact

  3. Ron Oertel

    I thought this was all straightened out the other day, but apparently not.

    The comparison was made between two new student housing developments:

    Sterling (off-campus)

    The Greens (on-campus)

    For an apples-to-apples comparison, one would have to look at similar living arrangements within both developments.  Both developments offer single rooms and entire units.

    At Sterling, the monthly cost for a single studio or 1 bedroom unit is:

    $2,239 – $2,309

    https://www.sterlinghousing.com/davis-ca/sterling-5th-street/floor-plans

    At The Greens, the monthly cost for a single studio is

    $2,248

    So, the monthly cost is essentially the same.

    HOWEVER, unlike Sterling, The Greens does not require a full-year commitment.  This results in an ENORMOUS savings (approximately $6,700 – $6,900, for those who do not need an apartment unit over the summer, for example.)

    A similar comparison can be made regarding the rental of single rooms:

    Sterling:

    $1,229 – $1,459.  ($14,748 – $17,508 per year.)

    The Greens:

    $1,541.  ($18,492 per year.)

    So in this case, the monthly rent is slightly higher at the Greens.  However, the same savings would apply, if a student does not need that housing over the summer.

    $1,541 X 3 = $4,623 savings.

    If you subtract that savings from the yearly cost at The Greens, even a single room is less-expensive at The Greens – compared to any of the options at Sterling.

    And of course, one can save even more by sharing a room at The Greens, which aren’t even available at Sterling.

    Feel free to “check my math”.

    By the way, the studios and single-family rentals at Sterling sold-out MONTHS ago, while the shared units are still available. This seems to indicate that even students don’t like “student housing” off-campus. And frankly, apparently many can afford it.

    How many students receive “no-cost tuition”, by the way? Maybe half? (Does society have to fully-subsidize the cost of college for students – especially since many have options closer to home?)

    1. David Greenwald

      There appears to be all three units available at Sterling. Which means they’re probably going to sell out. I wasn’t so concerned about your math rather my point was that Sterling is actually the most expensive or among the most expensive apartment complex and it’s still cheaper than on campus that’s the point I’m trying to make.

      1. Ron Oertel

        There appears to be all three units available at Sterling. Which means they’re probably going to sell out.

        Again, the studios and single-bedroom sold out a long time ago.  The shared units are the ones still available.

        This indicates that even students don’t like student housing, off-campus.

        I wasn’t so concerned about your math rather my point was that Sterling is actually the most expensive or among the most expensive apartment complex and it’s still cheaper than on campus that’s the point I’m trying to make.

        And, your point is incorrect.  Did you even read my comment/comparison?

        Also, the reason that Sterling is expensive is because it’s new.  That’s what the entire comparison relates to. Compare new housing on campus, with new housing in the city.

        Pre-existing housing at either location is irrelevant, regarding development choices made now.  Any new housing is going to be expensive, unless it’s subsidized.

        And in the case of the campus, they apparently require housing to pay for its own costs.  Just the other day, you said that you (generally) think that housing should not have to pay its own way, in regard to its fiscal impact.  Anyone with a lick of sense would be concerned about that point of view. That’s exactly the reason that Davis (and just about every other community throughout California) is experiencing long-term fiscal challenges.

        But, I have a question for you:  Other than the comparison, why is this even coming up?  Even you have acknowledged that the planned student housing (in the form of megadorms in the city) and apartments on campus “fully meets” the need for student housing. There’s what – tens of thousands of beds in the pipeline (at both locations), isn’t there?

         

        1. David Greenwald

          “Other than the comparison, why is this even coming up?”

          A key debate when the Housing Element comes back will be over housing on campus versus off campus. Having accurate data is important to that dicussion.

        2. Ron Oertel

          Well, I don’t understand that – since I don’t think that prior approvals can generally be “undone”.

          But it’s important to note that (unlike housing on campus), any housing in the city is available to anyone – including students. And even students generally prefer to avoid “student housing”, if Sterling is any indication (in regard to the early sell-out of studios and 1-bedrooms).

          Of course, UCD is reportedly tied with one other UC, in regard to the lowest percentage of low-income students in the first place.

          And up to this point, NO ONE (other than those who have recently moved into Sterling) is actually living in a megadorm.  This is a new type of development. The city has not seen such proposals in the past.

           

          1. David Greenwald

            In general, having students living in apartments means that fewer are going to be living in converted single family homes while opens up more of those for families.

        3. Ron Oertel

          That’s an entirely different issue.

          One of your commenters recently noted that he was paying $400/month, presumably in a minidorm.  So, I suspect that this type of arrangement will continue, regardless of any new housing built, on-campus or off. There will always be a significant number of students seeking this type of arrangement.

          But if one wants to get some idea of the impact of students on existing rental housing, one could examine the vacancy rate during the pandemic.  But even that would not indicate the full impact that students are having on the rental market, which presumably would be available in greater quantity to others if sufficient housing was built on campus.

          But it would be interesting to know how many students were able to get out of their leases, and whether or not this also applied to on-campus housing. (If I’m not mistaken, leases on campus were easier to “cancel”, during the pandemic.)

          But again, I thought this was already a largely “settled issue”, given all of the megadorm approvals, and planned housing on campus.

  4. Ron Glick

    You seem to think on or off campus is an economic problem when in fact its a social problem. Many locals want students sequestered on campus. Others don’t want students to vote in city elections. Others wish the university would stop growing altogether or want to preserve farmland. Marginal rental costs are so far down the list for the existing homeowners of Davis that this article adds little light to the real motivations of the nimby’s.

    1. David Greenwald

      I seem to think that there is a need to counter lousy mathematical arguments. I don’t actually disagree with your point but that’s not the point people are making it so I needed to share that it was actually falls on a broader scale.

    2. Richard_McCann

      Given that the NIMBYs try use a false narrative about relative housing costs (e.g., see Ron O’s comments over the last couple of years), David’s explanation is necessary to end that argument. (Of course Ron tries to resurrect that argument by comparing a single project that houses a small percentage of the total off campus student population, but that’s chasing anecdotes, not data.)

      1. Ron Oertel

        Given that the NIMBYs try use a false narrative about relative housing costs (e.g., see Ron O’s comments over the last couple of years),

        My comments are generally not related to NIMBYism, nor have you explained what you’re referring to.

        David’s explanation is necessary to end that argument. (Of course Ron tries to resurrect that argument by comparing a single project that houses a small percentage of the total off campus student population, but that’s chasing anecdotes, not data.)

        The comparison was made regarding two new housing developments, one on-campus, and one off. 

        The rental prices are quite similar for both (for similar living arrangements), but the one on campus does not require a full-year lease.

        Do you have two other new developments in mind for comparison?

         

  5. Bill Marshall

    Well, I don’t understand that – since I don’t think that prior approvals can generally be “undone”.

    Depends on the type of approval, and the circumstances… legislative approvals generally can be undone, ministerial approvals not so much… as I said, it depends…

    Other problems with your argument(s) and facts, but it is my lunch time…

    1. Ron Oertel

      Other problems with your argument(s) and facts, but it is my lunch time…

      I welcome those (especially as it relates to facts), though Vanguard commenting rules will prevent me from responding further (today).

      Enjoy your lunch, and will try to respond tomorrow to any concerns (or clarification) that you subsequently put forth.

      Not sure I’ve put forth much “opinion” here today, regardless.

      1. Ron Glick

        Pity that, because the comment limit as x goes to 5 is zero, the nascent ideas fulminating, like a boiling Erlenmeyer, in Dr Ehrlich’s Population Lab will need to wait another day before bestowing their brilliance upon us.

        1. Ron Oertel

          Ha!

          Also, let’s see if anyone can find the simplification/difference I used, for the first comparison (compared to the second comparison).

          “Compare the comparisons”, and tell me (for tomorrow).

  6. Ron Glick

    “California is closer than it has ever been to achieving part of its dream, allowing people of all races and nationalities to seek a golden future. But older Californians, liberal and conservative alike, are too indifferent to the needs of the next generation, too settled in their ways to accommodate them. The Democrats who run the state fail all but its most fortunate residents in the realms of housing, education, and economic opportunity. And no opposition is correcting for the worst shortcomings of the Democrats, because despite the efforts of some tolerant and farsighted GOP legislators, like Fong, much of the California GOP flunks the inclusion-threshold test voters now demand, most recently by tying its fortunes to Trumpism even as the state’s voters overwhelmingly rejected it.”

    Much stuff in this article that I have pointed out over the years. Read the brilliant article here:

    https://www.theatlantic.com/ideas/archive/2021/07/california-dream-dying/619509/

  7. Keith Y Echols

    Well, it’s another article by David about saving the endangered species that needs super special protection:  students.

    Why?  I dunno some magical pact he believes exists between the city and UCD?

    Students are like everyone else.  They can afford to live here or not.  Why analyze “student housing” options as if the city is collectively their parents and have an obligation to plan housing for them?

    Now, I’m not singling out the student population.  As I said they’re like everyone else.  Which means if we can build housing for them (or anyone else) that provides a tangible benefit for the city; then great…then by all means do it.   I was personally not a fan of the proposed University Mall mixed use development.  But then I believe that the concentration of students in the area would help to generate more business for that shopping center….which is a plus for the city in terms of tax revenue.  Also, it’s less of a burden on the infrastructure (in this case roads) due to it’s proximity to the University.  Now if the neighbors are okay with the project…that’s another story.

    But David continues to post articles based on student need…again like they’re some super special endangered species of a case to consider.  As I said previously, all of David’s housing articles going forward should have his quote on headline banner:

    I THINK THE CITY SHOULD SUPPLY HOUSING IF IT BELIEVES IT NEEDS HOUSING IRRESPECTIVE OF WHETHER IT PAYS FOR ITSELF OR NOT.  

    This pretty much says; he wants others to pay/subsidize new housing.  Why?  As I said in other comments, if UCD’s policy is for new housing to pay for itself.  Why shouldn’t the city take the same rational approach?

     by expanding supply we can do two primary things: (1) slow the increase in rental rates,

    Homebuilders almost never add enough to the housing supply to negatively effect prices.  They build where prices are rising and will continue to rise.  The simple understanding of supply and demand look at the situation in total: more supply = less demand = stable or falling prices.  The problem is that it doesn’t take into account strategic incremental increases in housing.  What do I mean?  1. Builders will never meet demand.  So (outside of major nation/statewide economic issues) there will always be significant demand in builder’s markets.  2. When builders build they INCREASE the value of surrounding houses in a community.  New homes equal higher prices new home prices which generally works their way down to the existing homes.

    So when new homes are added to the supply…yes in theory more supply equals less demand which should lessen the effects of rising home prices/rents.  But this happens in incrementally while at the same time new homes come along and keep pushing prices upward (again, builders enter into markets where prices are projected to go up).  Bottom line, don’t look to new home builders to solve the housing supply problem because it’s not in their best interests under the current circumstances (as there’s not enough infrastructure to massively build out and sell new homes at a rate that makes the huge capital investment/risk to be worth it).

     

    1. Tim Keller

      This is why I’m curious to know at what point higher density housing becomes a fiscal positive for the city.   So long as the projects are neutral or revenue positive, I think we should build as much student housing as the market will bear.

      1. David Greenwald

        What if the project in 15 years shows a slight negative balance given how we decide to project the cost allocations and likely increased costs of city employees?

        1. Bill Marshall

          What if the project in 15 years shows a slight negative balance given how we decide to project the cost allocations and likely increased costs of city employees?

          Define “slight negative”… 0.5%, 1 %?  More?

          Say what you mean David… should there be no increases in costs for City employee compensation (zero [or negative salaries, benefits] , because even matching inflation would be increases, not to mention fixing total comp increases due to PERS catch-up assessments, and oh, aren’t your supportive of adding employees as part of supplementing PD with social worker responders… you are all over the place… please clarify)?

          Even if salaries, and contributions to medical/dental are FROZEN at todays $$$, there are likely to be increases to “increased costs of city employees”…

           

  8. Bill Marshall

    Which means if we can build housing for them (or anyone else) that provides a tangible benefit for the city; then great…

    We differ there… you also say,

    Students are like everyone else.

    So, if you can assist or support your neighbor, someone like you, and it’s ‘no skin off your nose’ (no significant detriment) you need a ‘tangible benefit’ (aka, “what’s in it for me?”) as a condition of support or assistance (or accommodation)…

    I figure, no harm, no foul… and I can lean towards the altruistic… but I won’t “bend over and take it”, and I wouldn’t ask that of another…

    I look at it as “as long as there is no significant harm”… you want to “make a profit”… different mind-sets, completely… you have your view, I have mine… it is what it is…

  9. Ron Oertel

    David:  What if the project in 15 years shows a slight negative balance given how we decide to project the cost allocations and likely increased costs of city employees?

    What if every housing development was like that, going back decades.  What would that do to the city’s current fiscal situation?

    Oh, wait – they are like that, each with that “negative” balance increasing, over time.  🙂

    As is the case in every other city, as well.

     

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