The High Cost of Living
Why Is Housing Prices around Colleges and Universities Higher
Upon establishment of institutions such as colleges, universities, hospitals, and other public institutions attracting a large population, the prices of houses within that region tend to rise. The emergence of such institutions influences the rental housing market. Such occurrences tend to influence the residence of the immediate neighborhood and the students. While those who own land in the neighborhood can establish rental houses and make great profits from student, workers and lectures accommodation, the tenants suffers the consequence of heightened rents.
Population: With emergence of colleges and universities within an area, a greater population is attracted to that vicinity. Ogur (1973) argued that the increase in population of the staff, lecturers, students and other educational stakeholders is bound to create a shortage of the houses. Consequently, those who own residential places and those establishing such are likely to amplify the rental prices.
Establishment of such institutions is likely to attract more businessmen into the region. Such business are likely to thrive because of the students population and hence leading to an attraction of an even larger population consequently creating shortage of houses, thus the law of high demand and low supply resulting to increasing of prices reigns (McEachern, 2008).
External students: Many universities and colleges establish residential places for their students. However, the facilities are seldom enough. The private sector has to come in with more residential places. Higher institutions of learning are bound to attract people from without the nation and need to reside in the colleges' neighborhood to optimize their learning. This further stretches the need for more houses, consequently triggering the rise of the existence residential places.
Development: According to Howe (1917), the development of a region leads to increased cost of living. With establishment of colleges and universities, development is almost inevitable. The result is attraction of people, businesses, and opportunities triggering development. When a region is developed, its cost of living heightens, including the house rent.