The Student Housing Market

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My daughter is going to be a junior at UC Santa Cruz this fall and had to move out of her college sponsored apartment. 

The housing market is extremely tight in Santa Cruz, like many college towns, and having lost the lottery to keep her apartment, we are now tossed into the fray of competing with hundreds of other families looking for a place for her to live. 

Spending a few days viewing the available rentals last week, I quickly realized the housing situation in Santa Cruz is beyond ridiculous.

Think of the worst motel room you can imagine with a small kitchenette with about 500 square foot in total, running from $2500 a month or more.

Yes, it’s that bad. 

Add in the fact that every available place we saw was either rented or had an application or three already submitted. Since the market is so crazy, managers are slow to return calls, websites are inaccurate or don’t function very well and what websites do work are inundated with applicants.

Santa Cruz is not ideally situated for easy access. If one wants to go further out to find something, you face monumental traffic concerns adding 30 minutes of stop and go driving in almost every direction.

It became apparent that to find a place, we had to switch gears and adopt the method of simply driving around and stopping in every apartment complex we could find that looked safe and trying to find a resident manager so we could inquire about something that might be coming vacant soon but had not yet been listed.

Similar to one of the best ways to find a used car to buy, we had more success driving all over town and doing the footwork needed and hopefully get lucky than competing in the public marketplace of the web. In my past articles on how to find a used car worthy of owning, although the public web is a good place to find your ride, some of the best cars I have found have simply been stopping at a parked car with a for sale sign on it. 

Using old fashion footwork, you eliminate much of your competition by finding something that is not exposed to the many buyers that peruse the web looking for the same deals you are.

Truth be told, we found a jewel of a cottage up on the hill overlooking both the amusement park and the beach that had not been listed and, wrestling with the uninspired agent and barely functioning application web page, we may have successfully found a place. A rather nice place in fact, without the competition of the internet.

I say may, because although it looks promising, we have not yet received the final say on whether we have the place as of the time of this writing.

It’s easy to blame the greed of landlords for such a fiasco as the Santa Cruz housing market is, but the fact of the matter is prices are ridiculously high because the demand there is off the charts. 

Thank goodness they’re kids living in these places because truthfully, unless you’re willing and able to pony up at least three grand or more a month to house your kid, they’re going to be living in a fecal crater of an apartment and most kids are happy just having a place of their own.

Speaking to acquaintances around town I often hear the suggestion that there should be something done to rein in rents such as implementing rent control or forcing landlords to drop rents to reasonable levels (whatever that is), but such measures stymie free market fundamentals which would make housing even less available.

True, such edicts as rent control might drop rents for some, but many more applicants would not be able to find a place at all. Either that or a black market for housing would pop up which might eliminate the protections offered by housing authorities as renters sign away their rights to report deficiencies or dangerous conditions in exchange for that coveted lease.

Compounding the problems is that a portion of the low cost rentals are being taken up by publically assisted tenants which have a portion or all of their rent paid by government programs. When private applicants who have limited funds compete with government funds and housing edicts, the available inventory of student housing is further reduced, making the situation even more difficult.

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This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: [email protected] 

Marc Cuniberti

Marc Cuniberti

Marc Cuniberti
Host of Money Matters Radio on 67 radio stations nationwide, Financial and insurance columnist for the Union and 5 other statewide newspapers, owner BAP insurance and registered financial advisor representative at Vantage Financial. California Insurance License OL34249 and feature on ABC and NBC television and a host of TV documentaries on his financial insights.