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Pre-pandemic, an estimated 500,000 students lived and studied in New York City. When the pandemic hit, the number of students living in New York City immediately dropped. First, nearly all students living on campus were asked to vacate their residences. Within a few weeks, many students living off-campus also fled, in most cases returning to their parents’ homes across the country and around the world.

It is impossible to know how many students left New York City between March and April 2020. Still, the mass exodus of students appears to have been one factor among many that dramatically changed the city’s rental market. Since last March, for example, some of the highest vacancies and sharpest price drops on rental properties have been recorded in neighborhoods that typically are home to a high percentage of students. These neighborhoods include the East Village, where many students from NYU and The New School live, and the Broadway Corridor/Lincoln Center area, which serves as a de facto student neighborhood for thousands of off-campus students from nearby institutions, including Fordham, Julliard, and Columbia.

Although college and university students have been trickling back to New York City since last summer, the real question is what will happen to the city’s rental market when postsecondary students finally return en masse.

Local Universities Announce Plans to Resume On-Campus Activities in Fall 2021

In recent weeks, many local postsecondary institutions have announced their fall 2021 plans. NYU, which continued to offer select courses on campus in 2020-2021, has said it plans to reopen so long as state guidelines permit. The New School, which has been largely shuttered since last March, plans to fully reopen and return to in-person teaching by late August. Similarly, the City University of New York, which has multiple campuses across all five boroughs, has stated that they intend to return to “mostly in-person instruction and support services in time for the start of classes in fall 2021.”
Despite widespread plans to reopen, there are still several factors that university leaders can't control. First, if New York State still mandates masking and social distancing come September 2021, it may be difficult for local universities to offer classes on campus due to space restrictions. If large gatherings over 150 people are still restricted, large lectures will also be out of the question. Finally, although in-person college faculty are already eligible to be vaccinated, most college faculty, who are teaching remotely, and college students remain ineligible. If vaccine eligibility and access don't expand by late summer, this may also delay the reopening process.

If, however, all the pieces line up—that is, masking and social distancing rules are relaxed, and students and education workers are vaccinated—it seems highly likely that a full return to campus will happen by fall 2021. If it does, the impact on the local housing market could be significant. Below are three potential scenarios that may be played out of the coming six months.
The Vandewater condominium behind Columbia University's main campus

High On-Campus Housing Prices and Safety Concerns Will Drive More Students Off-campus

Before the pandemic, both off-campus and on-campus housing options in New York City were high. During the pandemic, off-campus housing prices have plummeted while on-campus housing prices have plateaued and, in some cases, even increased.

At The New School, for example, in 2021-2022, a double room (without a meal plan) will range from $19,250 to $22,000. Given that students rent for the school year (9 months), this works out to roughly $2,100 to $2,400 monthly. In the face of the recent price drops, especially in Manhattan, it seems likely that more students than ever before will consider off-campus housing a more affordable option.

Cost isn’t the thing that may drive more students from on-campus to off-campus housing when they return to New York City in fall 2021. Not surprisingly, campus dorms have been associated with the rapid spread of Covid-19. It seems likely that post-pandemic, students and parents may consider off-campus housing options, which are typically more spacious, to be a safer choice.

Higher Vacancies and Lower Prices Will Change Where Students Rent

Although many students were living in the East Village and Morningside Heights before the pandemic, the cost of living in these neighborhoods was prohibitive. As a result, since the early 2000s, many students have moved further east (first to Williamsburg and then to Bushwick) and further north (first to Harlem and more recently to Hamilton Heights and Washington Heights).

Since the pandemic, high vacancies in the East Village (a 123% year-over-year increase since last March) have pushed rental prices down by 26%. In the Broadway Corridor, vacancies have more than doubled and prices have dropped 22% over the past year. Carnegie Hill, another neighborhood that is popular with students and young professionals, has seen a 43% price drop on rentals and a huge surge in vacancies. The only notable exception to this citywide trend is Morningside Heights. The popular student neighborhood adjacent to the Columbia campus has seen sharp declines in rent (32%), but surprisingly, inventory has slightly declined since last March. Landlords warehousing units in preparation for a stronger spring and summer season is likely a factor.

With great deals now widely available throughout Manhattan, it seems likely that once campuses fully reopen, they may be quickly repopulated by students, including those who were previously priced out and forced to live far uptown or in more affordable parts of Brooklyn.

Some On-Campus Housing May Be Sold Off

A final possible scenario that may impact the Manhattan rental market over the coming years is the most to divest in campus housing. Currently, an estimated 30% of US colleges and universities are running a deficit. In high-valued real estate markets, one asset that universities can immediately tap is their real estate. While it seems unlikely that universities with deep endowments will need to resort to such measures, for universities with small endowments and highly valued properties, selling off-campus residence buildings will undoubtedly be on the agenda. There are also signs that investors are already looking for opportunities. In late 2020, an article in The New York Times featured just a few campus-to-market housing conversions, including Monarch Heights in Morningside Heights.

While the full impact of campus re-openings and the student return is difficult to predict, what is clear is that for the first time in decades, college students will have a lot of options off-campus, including within walking distance to campuses in historically expensive neighborhoods. On the flipside, local universities, which are already dealing with pandemic-related financial woes, may find themselves continuing to struggle to get their dorms back up to capacity, increasing the impetus to divest in residential properties.

Student-Friendly Rental Listings
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1080-Amsterdam-Avenue-01 1080 Amsterdam via OMG Marketing
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Contributing Writer Cait Etherington Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.
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