Higher Education and Housing: The Impact of Colleges and Universities on Local Rental Housing Markets.

The article comments on the impact of colleges and universities on local rental housing markets in the U.S. The study consists of the development and testing of a model of rental housing service demand. In this model, demand is assumed to vary positively with income, the percentage of total population which is enrolled in a college or university, and population density. A negative relationship is assumed between demand and the percentage of total employment which is in manufacturing. The first relationship defines a positive income elasticity of demand for rental housing services. The manufacturing variable is assumed to measure the effects of such external diseconomies of spatially concentrated industry as air pollution, ugliness, and noise. The population density variable is included to reflect the influence of differing numbers of rental housing service buyers in a given market area. It is believed that the college and university variable expresses the impact of this unmeasured component of student income which tends to increase student demand relative to non-student demand. Unmeasured student income consists of transfers from outside the local housing market area and relatively high permanent income.