Study: Boone has student housing surplus
by Anna Oakes
A draft housing analysis commissioned by the Boone Town Council concludes there is currently a surplus of student housing in Boone and that the oversupply is projected to increase.
"Based on a current demand from approximately 16,000 students, RKG estimates a surplus of units available to students between 1,200 and 2,500," the analysis states. "With approximately 1,600 additional student housing units in the development pipeline, and a projected increase in student enrollment by 2020 of less than 450, the oversupply of housing units targeted to students will increase."
The council sought proposals for a housing study last year and in August awarded a $21,665 contract to RKG Associates, a New Hampshire-based consulting firm. The Boone Town Council, Planning Commission and Affordable Housing Task Force will meet Tuesday, June 11, at 7:30 p.m. at the Council Chambers for a presentation of the housing analysis.
The study derived population, household and income trend data from the U.S. Census Bureau and Site to Do Business, an online resource that provides analytical information for commercial real estate professionals. In many cases, data is provided for the area within a four-mile radius of the town's center.
The authors say their study "conservatively" estimates a range of housing units available for student rentals based on anecdotal evidence obtained through stakeholder interviews, a visual inventory and collaboration with town staff. The inventory includes Appalachian State University dorm beds, off-campus apartments, houses and condos.
The study cites enrollment project data from ASU indicating bed demand should increase by a total of 443 beds by 2020.
Nevertheless, the study describes Boone's housing market as being "captive" -- one in which consumers are obliged through lack of choice to buy a particular product. "'Lower end' student housing stock is being vacated in favor of newer accommodations with more amenities," it states.
Developers proposing new student housing projects have argued there is still plenty of demand for student apartments in Boone.
"There's a real demand here for student housing," Frank Forde of Greensboro-based Mega Builders told the council last year. "We believe this is one of the best -- if not the best -- housing markets in North Carolina."
But Rob Holton of Boone property management company Holton Mountain Rentals said the market has been going "soft" for a couple of years now.
"I think everybody's in for a challenging market. There's going to be a lot more vacancies," Holton said. "The full impact of what's being built and hitting the market this summer -- I think you'll see an even stronger impact from that next year."
The study notes that the effects of the student and retiree/second home markets combined with Boone's topography and high cost of land contribute to a shortage of affordable housing for those with incomes under $35,600.
"A combined 6,222 student/conventional households vie for 4,333 affordable units, leaving 1,889 households forced to seek housing that their incomes cannot support," it states. And although students typically have low incomes, they nonetheless have a greater ability to pay by virtue of parent assistance and college loans, it said.
But some students say they cannot afford the newer apartment units built in Boone, typically configured with three or four bedrooms per unit, with each roommate paying between $550 and $700 in rent.
Angela Day, an ASU sophomore when she spoke a Boone public hearing in February, said she and a lot of her friends had a hard time finding affordable housing.
"The large complexes are viewed as definitely too much and out of reach," she said. "My apartment complex, you can feel dents in the floor because that's what you can afford. It's one of the cheapest but still very hard to afford."
A lack of choices in town could lead workers to seek residences outside of town, the study suggests, noting that more than 32 percent of Boone employees commute more than 25 miles to get to work.
The study also notes a shortage of housing in the over $83,100 income category, which reflects the demand for relatively expensive second homes, it said.
"Whereas a $350,000 to $450,000 home may be obtainable for some proportion of Boone's households, the trend in the single family market has been to target the households that can afford homes of $500,000 and up," states the study.
The study concludes that there are "no natural incentives" in the market to compel developers to build anything other than student housing or expensive second homes. Affordable housing opportunities will likely come from the rehabilitation and repositioning of older student housing properties, it said.
"Housing choice will remain elusive without some policy and/or regulatory intervention by the town and county," the study said.
In February, the Boone Town Council enacted new multi-family housing standards recommended by the Affordable Housing Task Force to create more housing stock suitable for families and the workforce.
The standards require units to have master bedrooms, minimum amounts of storage and outdoor living space and restricted bathroom-to-bedroom ratios. Projects must also have a mix of unit sizes, no more than three stories and limited parking. Finally, the standards mandate that no more than two unrelated persons can reside in each unit.
Developers and local leaders argued the standards would only increase building costs, causing rent to go up. Some said housing trusts, public-private partnerships and density bonuses would be better alternatives to help create affordable workforce housing.
Holton said he feels there are already affordable options in the market, which will increase as Boone's housing surplus grows.
"I think the affordable housing's going to be out there," Holton said. "We're fortunate to have units in all price ranges ... We've seen some rent prices go down.
a good time to be a tenant, because you're going to have a broader selection."