Demand drives up rents
As the national housing market continues to struggle, students are finding that the price to rent off-campus is still rising.
In Malibu, students face increasing rent prices not because of foreclosures, but because the housing market in Malibu is still competitive, according to Mark Verge, founder and owner of WestsideRentals.com, an online marketplace for connecting landlords and tenants in Southern California.
“Rents are still staying strong in the Malibu area,” Verge said. “Demand is still high because there’s always competition for coastal property. Students are competing with divorcees and professionals for rooms and apartments to rent. We aren’t seeing foreclosures in Malibu like other areas.”
Landlords realize the demand for student housing and consequently continue to charge students high rates.
“I raise prices a little each year, and I continue to do so because I believe the market in Malibu can still handle it,” said Scott Motte, a landlord who rents out a property in the Malibu Villas. “The demand of college students seeking housing is always high in the Malibu area.”
In Malibu, it is difficult to determine whether increasing housing costs are the result of the housing crash or the continuing prestige of coastal real estate. Whatever the source, however, students are still feeling the crunch.
Junior Mark Burcham said he is struggling to meet living and student expenses after paying the rent for his house in Calabasas.
“With the higher cost of renting off campus, it is becoming increasingly more difficult to balance expenses such as food, gas and tuition,” he said. “It really is just an adjustment to making small changes in lifestyle.”
But on-campus residents are not exempt from rising housing costs either. At Pepperdine, the cost of living is reflected in the cost of room and board. Information released by Pepperdine Housing and Community Living for fall 2008 shows the cost of housing for undergraduate students is about $10,480 for the academic year.
Despite the national housing market slump this year, students are paying a higher-than-normal increase in room and board rates to fund upgrades for housing, according to Mark Davis, dean of Student Affairs.
“This past year, we raised our rates slightly more than previous years because we are funding upgrades (e.g., wireless internet), and we are preparing for a major refurbishment of all the halls,” he wrote in an e-mail.
However, this price is still slightly below the average price of room and board for national private four-year institutions, according to Chris Bauman, Pepperdine’s manager of financial planning.
“Compared to the national average of private four-year institutions, Pepperdine has lagged its peers by 0.28 percent over the past four academic years,” Bauman wrote in an e-mail.
Despite this year’s larger price hike, Jim Brock, director of housing, contends that the University takes all possible measures to keep prices as low as possible for students.
“The university does its best to protect the students with low room and board rates on campus,” Brock said. “We are always looking at making sure we are doing everything we can.”
Relying on fundraising and donations rather than having students pay for the capital costs of the buildings, is an example of a measure taken that keeps the cost of housing down for students.
These fluctuations in the costs of living on campus are not so much affected economic swings as is off campus housing.
“The correlation between room/board and the economy is not as direct as other expenses,” wrote President Andrew K. Benton in an e-mail.
Although Malibu is fairing through the housing crisis with less damage than other markets, many students’ families were hurt by the housing slowdown. Dr. Robert Sexton, professor of economics, said the credit problems generated by the housing crisis has an affect on all sectors of the economy.
“In retrospect, homeowners paid too much and lenders extended credit which tied them into homeowners' losses,” Sexton wrote in an e-mail. “We just are not as wealthy as we thought we were and this financial crisis has impacted everyone.”
Grant Harling, a junior at Seaver College, faced a similar loss when he and his family bought a condo in Malibu, which they hoped to resell in the future. However, they lost out on profit due to the housing slowdown.
“We bought in Malibu hoping that the money made during the resale would help pay for school, but now all we can do is sell it back for the same price we bought it for.”
Many people saw our housing crisis as inevitable, yet its severity took even more people by surprise.
Although the University and the surrounding Malibu area may not feel the effects of the housing crisis as harshly as other institutions and cities, students will inevitably feel the effects of this historic event in many ways.