Impact of Vermont colleges on housing affordability difficult to measure

By: Mia Watson

Fall has started to arrive in Vermont, and with it is the return of many college students to the state. The impact of college students on local housing markets has long been a source of tension, particularly among long-term Burlington residents, who worry they may be priced out of housing by the large number of area students. By sharing an apartment and its rent bill, some students are able to pay higher rents than many other households. However, quantifying the impact of colleges on housing remains difficult for researchers.

National research has found that the presence of a university tends to increase area home prices and rents, but it is not clear whether that increase is driven solely by student demand for apartments or by the employees and graduates of the university drawn to the area. Furthermore, the impact of the university varied widely depending on the size and type of institution.

Area housing affordability is also often measured by the percentage of households that are cost-burdened. A household is considered cost-burdened when 30 percent or more of its monthly gross income is dedicated to rent or mortgage payments and utilities. College students typically have very low incomes, but often have access to other sources of funds, such as student loans or money from parents. Therefore, indicators of cost-burden can be inflated by student households in some college towns.

A recent article from the Harvard Joint Center for Housing Studies found that the percentage of cost-burdened renters is well above average in housing markets with high shares of college students. However, if students were excluded from the calculations, the share of cost-burdened renters in the area dropped by 9%.

Although Burlington was not one of the metro areas studied for that article, it has an estimated 3,000 undergraduates currently live off-campus. Meanwhile, 5,686, or 60% of Burlington renter households are cost-burdened, compared to 56% in Chittenden County overall.

At the same time, many college students complete school part-time while working or raising a family. Even younger, full-time students do not all receive financial support from family, leaving many to struggle to afford housing. One survey from the University of Wisconsin-Madison found that more than 36% of college students nationwide report difficulty paying for housing and utilities, while 9% were homeless. LGBTQ and non-white students were at higher risk of housing insecurity than other students.

Most college students are not eligible for the same housing assistance programs that other low-income households have access to. Full-time and part-time students under the age of 24 are not eligible for Section 8 Housing Choice Vouchers in most cases.  While low-income students do have access to some programs that can help with living expenses, including federal Pell Grants, these are not adequate to support many students. The University of Wisconsin survey reported that 15% of Pell recipients at community colleges and 11% of Pell recipients at universities were homeless in the last year.

Furthermore, for many students, poverty is not just a temporary issue until graduation. Recent national data from the U.S. Census Bureau finds that 4.8% of college graduates are living in poverty, with many more earning less than the median income. Even for students who find well-paying jobs, high student loan debt can make it difficult to afford rent or to save up to purchase a home. While college remains an important tool to increase earnings and career choices, it cannot guarantee that graduates will not struggle to afford housing and other basic necessities.

Understanding housing affordability in college towns will require a nuanced approach to the data, recognizing that a university not only attracts students but also jobs and workers, and that students come from a wide variety of incomes and life experiences.

The Vermont COVID Emergency Mortgage Assistance Program re-opened May 3, 2021. Click here to apply and read more. For emergency rental assistance, please contact Vermont State Housing Authority.