Off-campus rent rises as a result of increasing dorm prices, supply and demand

Eran Hami
Wed, 11 Dec 2013 04:58:51 +0000
Area, Campus, ohio state, osu police division

Off-campus houses near OSU’s campus. Some off-campus rents are set to rise for the 2014-15 academic year.
Credit: Ritika Shah / Asst. photo editor

As rent for some off-campus housing rises, some landlords are saying the increases are a result of increasing dorm prices and general supply and demand.

The owner of Hometeam Properties, Thomas Heilman, gave a few reasons for why landlords are raising their prices.

“The first thing is supply and demand. There’s a lot of interest to live near campus, so there’s the supply (of renters). It’s always going to be that way,” Heilman said.

Jevon Mason, a second-year in industrial and systems engineering who rents from a private landlord, is planning to live in the same house next year as this year, but said his rent is increasing. He said his landlord didn’t originally tell him that would be the case.

“I thought it was a little shady, especially because he didn’t inform us beforehand,” Mason said. “When he was asking us if we were going to renew, he didn’t also tell us the rent was going to increase.”

Wayne Garland, owner of Buckeye Real Estate, said rent for some of his properties will increase about 2 percent. Garland said it is because of the economic market.

“Student housing is pretty spoiled because it is in such high demand not only from the rental standpoint but from an investor standpoint,” Garland said. “There’s a lot of people that want to get into the student housing market.”

Heilman also said “the quality (of housing) is improving.”

“I personally have spent tens of millions of dollars since the ‘90s improving my stock in real estate,” Heilman said. “You could eat (off of) the floors now.”

Heilman said he has an “80-20 rule” about why some landlords receive negative feedback about their prices and properties.

“Eighty percent of landlords are pretty good and 20 percent are what you call slumlords,” Heilman said. “Most landlords, they have pride. They love their stuff. It’s not as bad as people think. It’s that 20 percent we got to work on. Can we do better? Yes. We can all do better.”

The cost of dorms is another reason housing prices off-campus are increasing, Heilman said.

Dave Isaacs, OSU Student Life spokesman, said the price of dorms has been increasing annually. Isaacs said dorm prices went up 6 percent each for fiscal year 2012 and fiscal year 2013. In fiscal year 2014, though, dorm costs only rose 3.9 percent.

Some utilities included in that price, which is upward of $2,920 per semester, are rent, heat, water and cable.

Heilman said people don’t realize that OSU’s actions affect landlords.

“When you raise the prices on dorms, that’s a reflection of where we’re at. People don’t really look at that,” Heilman said.

Rob Gleisser, a fourth-year in Jewish studies and communication, said OSU has it better off than other schools.

“Honestly, I think it is pretty affordable,” Gleisser said. “I was just at Michigan over the weekend for the (OSU-Michigan football) game, and I pay $530 a month. My friends I was staying with said they pay $740. So in comparison to some other schools, I think we’re doing OK.”

Heilman also said there is a “the sophomore-junior effect” affecting rates.

“Kids come screaming out those dorms, they’ve been in prison for a year, now they’ll be in prison for two years,” Heilman said of OSU’s plan to require students to live on campus for two years beginning in 2016. “They don’t want to be told what to do. So they can’t wait to get out of prison. They’re (going to) come screaming out and they are going to pay whatever it takes to get the hell out.”

Heilman said he’s unhappy about OSU’s plan.

“I hope they don’t shoot themselves in the foot with this. Kids won’t want to come to Ohio State if they’re forced to live in the dorms … Give them the choice, (the students are) not stupid,” Heilman said. “All you hear about is the bad things, you don’t hear about the dozens of good experiences people have (off campus).”

Sanchita Dhond, a second-year in pharmacy, said she is staying in the same house for the next school year, and her rent is staying the same.

“It’s from Pella Company, and they said if we renew we can pay the same price. But if we move (to a different property), we pay a higher price,” Dhond said.

Heilman said students should live off campus, not just for business, but to better themselves.

“The most entrepreneurial do not live in dorms,” Heilman said.