Editor’s note: This story is the first in a two-part series on the housing and rental market in the State College area.
Spaces are running out in The Metropolitan, the 12-story mixed-use building being constructed in downtown State College. Of its 136 apartments, which range from studios to five bedrooms, about three are left, assistant sales and marketing manager Jose Garcia said on Monday.
Though construction continues, the about 500 students set to move in on Aug. 18 will be able to get their rooms ready before the fall semester begins three days later.
“As of now, we are on-time and on-schedule,” Garcia said.
The Metropolitan, which has been years in the making, will feature about 32,000 square feet of retail and commercial space on the first two floors, while apartments will take up the remaining levels. The building’s amenities include a 9,000-square-foot residential clubhouse, a resort-style pool with an outdoor terrace, fitness facilities and an internet cafe.
The cheapest rooms start at $730 per person for a shared room. The most expensive, the studios, start at $1,520.
“They would not keep building these rental properties if they could not be filled,” said David Price, a lead agent with RE/MAX Centre Realty. “These are really smart people, they’ve looked at this real hard and they believe they can fill them.”
The student-housing market is booming. As enrollment creeps upward, so too do new high-rises and apartment buildings, each containing a steady stream of revenue for the school, the town and investors.
State College isn’t alone. According to market analytics firm Axiometrics, more than 40,000 beds for student housing are expected to be added nationwide in 2017.
“Most of my peers and colleagues in other Big Ten university towns are having the same experience,” said Ed LeClear, the planning director for State College borough. “The student-housing market has been incredibly hot. … And every indication we have from every developer we’ve spoken to who does this for a living, is that there is less supply than the market demands.”
Experts point to the baby boom generation for the current state of the college marketplace. After President Lyndon Johnson signed the Higher Education Act in 1965, a flood of resources went into educating the American population. Federal programs such as work-study funding, tuition grants and guaranteed student loans made college accessible for a wider contingent of people, Jeffrey Selingo, the former editor of The Chronicle of Higher Education, wrote for The Washington Post. Nationwide, enrollment almost tripled in the ensuing decades.
But since then, the same generation that created the millennials have made it harder, Selingo points out, for them to pay for school. According to the Bureau of Labor Statistics, the cost of tuition and fees increased by more than 1,100 percent since 1978.
As a result, two-thirds of graduates leave school with loans, averaging about $35,000 in debt by the time they turn their tassels.
“It’s a multilayered, multi-pronged set of problems and opportunities,” Price said. “It’s leaving students in a significantly bad situation when they graduate.”
Yet graduating is no guarantee. The U.S. has fewer college students graduate than other modern economies, such as Great Britain and Australia, the Economist reported, while the chances of an American student completing a four-year degree in six years stands at 57 percent — or little better than a coin flip.
Meanwhile, the government has benefited from increased income tax revenue from college graduates, while universities have benefited from higher enrollment and tuition figures. Fewer low- and moderate-income students, meanwhile, are attaining bachelor’s degrees, Money reported.
While half of students from high-income families earn a bachelor’s degree by age 25, according to a University of Michigan study, only one in 10 people from low-income families get the piece of paper that is a key predictor in lifetime earnings.
With the emphasis on a college degree, more students are trying to get into the ivory tower. The gates surrounding it, meanwhile, continue to become higher, and recently, more gilded.
“It’s super competitive,” Price said. “There’s a lot of money going in and it’s not just downtown. The entire town — they’re fighting for the student dollar.”
Across the country, colleges and surrounding housing complexes are pouring millions into amenities such as spas, on-site tanning and recreation centers, all in an effort to attract students. Penn State, for instance, is set to add a rock wall in its Intramural Building by the fall semester as part of a three-phase plan to upgrade the facility.
The renovations are funded “almost entirely” through the student facilities fee paid by all University Park students.
“The market research indicates that today’s incoming students have an expectation of better amenities than they did 20 years ago, 30 years ago,” Price said.
These luxury features are often effective, based on psychological research, making college tours a potentially precarious exercise in decision-making. According to a University of Virginia study, for instance, people believe they’re better at making future life-changing decisions than they really are.
But for millions of 17- and 18-year-olds and their families each spring, it’s a rite of passage. At Penn State’s University Park campus, enrollment has increased every year since 2005. In 2016, it reached a record 47,261, an increase of about 15,000 students since 1976.
“That just continues to increase demand,” LeClear said.