By Allison Benne
BYU off campus housing is generally less expensive than housing at other universities, despite a high inflation rate and an artificially inflated real estate market in Provo.
The annual rental rate increase students see is due to rising property values, said Debbie Bishop, a property manager.
Property values are rising partly due to the high demand in BYU approved housing and inflation, according to Kirk Philips, a BYU professor of economics, and Drew Armstrong, a Provo realtor.
Rental rates here usually increase annually because of the inflation. The rise in monthly rent is higher than the national inflation rate reported by the Bureau of Labor.
It is not known whether that difference is significant, Philips said.
“That”s for one geographical area, one particular commodity. It”s hard to tell if it”s unusual,” Philips said.
Although the rent increase is unusually high, the $241 average rent BYU students pay is significantly less than other university rates, according to the BYU Off Campus Housing Office.
“We find that housing costs at other college campuses similar to BYU are not much different,” John Pace, the off campus housing manager, said. “Actually, some are more costly than BYU.”
Weber State students pay almost double what BYU students do, while UCLA students pay nearly $500 a month, according to Weber and UCLA off-campus housing offices.
Although rental rates are lower at other universities, requiring BYU students to live in approved housing does increase rental rates.
Armstrong said this policy creates an ”artificially inflated” market.
By simply having BYU approval for a housing unit increases its value by $15,000 to $20,000 depending on the price range, he said.
Riverstone, a non-BYU approved unit in Provo, is currently listed for $105,000.
However, comparable BYU approved units recently sold for $120,000.
According to Armstrong, Riverstone should be worth more than the BYU approved unit. Because the unit was BYU approved, its value increased $20,000.
These inflated prices are then passed on to the students through rental rates.
Approved units would immediately decrease in value if students were allowed to live in any housing.
“Without BYU approval at this point, there would be a lot of sad landlords,” Armstrong said.
Approved housing rental rates would decrease while non-approved housing rates would increase, Philips said.
Increasing the number of approved housing spaces from the current 22,000 available would have the same effect on rent.
The number of housing spaces is presently increasing, according to the off campus housing office.
The Provo rental market has already changed because of an increase in the number of approved housing.
Competition between approved housing complexes has increased because students have more choices, Pace said.
“A few years ago, the rental market was very tight and beneficial to landlords,” Pace said, “Now, there”s a number of landlords suffering greatly from vacancies.”
New housing complexes are currently being built.
These new complexes easily meet the BYU minimum housing specifications.
Older units sometimes have problems because they were built under older building codes, Pace said.