New Student Housing Is Improving Apartment Vacancy Rate

By David M. Greenwald
Executive Editor

Davis, CA – UC Davis’ annual apartment survey report showed that the construction of student housing on campus and in the city is improving the student housing situation.

The report released on Thursday showed “a 3.0% blended vacancy rate — including apartments leased by the unit and by the bed — which is significantly higher than the 0.5% rate for fall 2022.”

Rents continued to increase, but by a modest rate—only increasing around 1.8%—a mark well below that of inflation.

According to the survey, which has been conducted in the fall annually since 1975, “UC Davis has made a net gain of nearly 6,500 new apartment and residence hall beds on campus” over the last six years.

“It’s exciting to see the positive results,” said Michael Sheehan, associate vice chancellor for housing, dining and divisional operations in Student Affairs. “The collaborative planning efforts of both UC Davis and the city of Davis are having an impact.”

A release from UC Davis News noted, “He added that the campus is moving forward with work on a new residence hall with 600 to 900 beds for fall 2027 and planning for a new apartment project.”

In fall 2023, UC Davis housed about 14,080 students and their family members on campus.

That is roughly 34.4 percent of the total enrolled students of 40,848.  While that number remains well short of the 48 percent goal by 2030, it marks a vast improvement over the 29 percent of student who lived on campus in 2016-17.

According to the release, “It is estimated that more than 40% of students now have access to campus housing, and Chancellor Gary S. May has said the campus is working toward the goal of providing access to campus housing for 48%.”

Orchard Park opened in September of 2023, adding 1500 beds for graduate students and students.

UC Davis noted that “the campus exceeded its 2023 target of having 15,000 student beds on campus under the terms of a 2018 memorandum of understanding with the city of Davis and Yolo County.”

Since 2017, “UC Davis has opened about 6,500 new apartment and residence hall beds through construction of Orchard Park, the Tercero 4 complex, Yosemite Hall, The Green at West Village and Shasta Hall; and by doubling up beds in larger rooms at the Sol apartments in West Village.”

UC Davis broke down the vacancies by unit type.

• The 6,668 apartments leased by the unit accounted for about 72% of the market-rate rental units. According to the survey, 152 apartments, or 2.3%, were vacant and available for lease, compared with 18, or 0.2%, vacant among 7,403 apartments in fall 2022. Since 2017, the vacancy rate has ranged between 0.2% and 2.0%.
• The 2,611 apartments leased by the bed rather than the unit as a whole account for about 28% of the market-rate apartments in the survey. A total of 470, or 5.9%, of their 7,988 beds were vacant. In fall 2022, 0.8% of 9,040 beds in this type of unit were vacant.

They also looked at the rental rates.

• The combined average rental rate increased 1.8% from fall 2022 to $2,719.
• The average monthly rent for unit-leased apartments of all sizes — from studios to four or more bedrooms — was up 6.5% to $2,372.
• Two-bedroom apartments — representing 45% of those rented by unit — were shared by three people and rented for $2,295, up 4.9% from fall 2022.
• The average rate for a bed lease decreased 5.2% to $1,176.
• Twenty apartment complexes reported offering incentives and move-in specials to help fill vacancies and attract new residents. The value of these incentives ranged from a $200 gift card to a full month of discounted rent, with the average value of $1,570 and well above that of prior years.

A total of 108 apartment complexes and property management companies representing 10,801 rental units, or 1.9% fewer units than the previous year, responded to the survey.

However, the survey did account for around 83 percent of Davis’ multifamily housing stock.

The report’s calculations excluded units rented at below-market rates, so only “those 9,279 market-rate units were included.”

While 3 percent represents a vast improvement, there is still work to do.  Experts have suggested a five percent vacancy rate is more ideal for renters.  There is room for improvement, as the university is committed to expanding its on-campus housing from 34 percent to 48 percent over the next six years – though its unclear at this point how they will meet that goal.

Moreover, as we saw last week, students are still camping out in January attempting to secure housing for the fall.