When most people picture a college town, they likely think of lively student-oriented infrastructure, campus events, fraternity row, and a general sense of youthful energy that invades the local community. But beneath the surface of this vibrant atmosphere lies a powerful, yet underresearched force driving urban change: studentification.
This term refers to the transformation of neighborhoods and cities resulting from increases in the concentrations of student populations. Yet, despite the acknowledgement of this type of urban change, studentification remains understudied in the American context. Much of the existing scholarship has focused on case studies outside of the United States or on broad qualitative findings. In the United States, where small- and mid-sized cities can rely heavily on local universities for economic and cultural vitality, the lack of focused research has left a knowledge gap, especially when it comes to understanding how student populations influence local housing markets. My thesis aims to fill this gap.
Using data from the 2023 American Community Survey and the 2023 Integrated Postsecondary Education Data System, and utilizing Ordinary Least Squares Regression analysis, my research investigates how the concentration of higher education students affects various aspects of local housing markets. The dataset includes all cities in the United States with populations between 25,000 and 250,000, for a total of 1,758 cities across the United States, making it one of the more comprehensive looks at studentification in an American context. My results illuminate important considerations for policymakers in small- and mid-sized cities in the United States with dominant institutions of higher education, particularly for those cities seeking to address issues in their local housing market.
First, as the proportion of students increases in a city, both rental prices and home values rise. This is a crucial insight for policymakers in communities facing high housing costs and a dominant higher education institution. The logic is straightforward: more students mean higher demand for housing, particularly temporary or short-term rentals, due to the rotational, temporary nature of the student population. This higher demand drives up both rental and sale prices.
When the data is broken down further, we see that this trend holds only for full-time students; part-time students do not significantly affect rental and housing costs. Similarly, only graduate students, and not undergraduate students, are associated with higher rental and housing prices. One likely reason is that undergraduates are more likely to live in on-campus housing or be subject to campus residency requirements, while graduate students often live off-campus and participate more fully in the off-campus housing markets.
Second, my results show that as the proportion of students increases, the rate of owner-occupied housing decreases. This trend holds across all student subgroups. Given the temporary nature of student residency and their low incomes, it is unsurprising that students rarely purchase homes. The demand for rental housing far exceeds that for owner-occupied housing. In response, developers prioritize constructing more rental housing, gradually reducing the share of owner-occupied units in the city over time.
Thirdly, despite the population influx, studentification has no significant impact on vacancy rates. This suggests that off-campus housing markets are able to absorb the student demand, likely due to a steady development of student-targeted rental properties.
Finally, the data shows a double-sided effect on housing cost burden. As the proportion of students increases, the rate of cost-burdened renters rises, while the rate of cost-burdened homeowners declines. According to HUD, individuals are cost-burdened when they spend more than 30% of their income on housing (U.S. Department of Housing and Urban Development). This finding aligns with expectations: students typically have low incomes and high tuition expenses, pushing their housing costs over the burden threshold. In contrast, homeowners in college towns often include faculty, other professionals, and a highly educated workforce, who tend to earn higher wages and can more comfortably afford housing expenses (U.S. Bureau of Labor Statistics).
These findings illuminate the need for targeted housing policies in college towns. As the proportion of students in a city grows, rental and home prices rise, owner-occupancy declines, and renter cost burdens increase. Policymakers should respond by expanding affordable rental and housing options, protecting homeownership opportunities, and planning for balanced growth. Tailoring policies to the student demographic can help maintain housing stability and affordability for both student and non-student residents. Additionally, partnerships between universities and municipalities can result in coordinated planning efforts, helping to balance the on-campus versus off-campus housing dynamic and preserve affordability in increasingly competitive housing markets.
U.S. Bureau of Labor Statistics. (2024, August 29). Education Pays. U.S. Bureau of Labor Statistics. https://www.bls.gov/emp/chart-unemployment-earnings-education.htm
U.S. Department of Housing and Urban Development. Comprehensive Housing Affordability Strategy (CHAS) Data. HUD User, https://www.huduser.gov/portal/datasets/cp/CHAS/bg_chas.html.
Dylan Schutte is a graduating senior studying Policy Analysis, Economics and Quantitative Methods, and Political Science. During his time at Indiana University, Dylan was a Cox Civic Scholar, an intern with the City of Bloomington Department of Housing and Neighborhood Development and the Indiana Department of Revenue, a member of the Indiana University Student Government, and an Indiana University Student Ambassador. After graduation, Dylan will attend the University of Virginia School of Law to pursue his Juris Doctor.
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