City Cracking Down On Student Housing

6 Replies

Hi BP!

I invest nearby a big university that has become a crucial part of the local city areas. However I got news that the city is looking to crack down on student housing, which is my target demographic for tenants, in order to get more housing for locals.

Should I be worried? What can a city do to really enforce that? And how can I go about preparing for that?

I don't think they can discriminate against students.  They can change zoning laws to prevent new student housing.

Our city cracks down on student housing by limiting the zoning. We can only rent to "4 unrelated parties" in an R3 zone. So even if we have a 5 bedroom house we can only put 4 students in it. It definitely makes it hard to make money on larger rental houses. Its normally the 5th and 6th student that make a "Student" rental more attractive then a "single family".

They may not allow new construction to be a a 1:1 ratio along with requiring commercial in your 1st level. 1:1 ratio isn't the end of the world, but does lower rents to an extent. Biggest thing is what @Jeff Watson mentioned about "4 unrelated parties" on existing structures. They may further enforce other codes such as tickets for noise/parking etc. After 3 tickets the city may pull your "ability" to rent to students in that house for 1 year, etc.  Each town is different. See if you can find an angle into who is on the board or has connections and speak to them or attend the next meeting. 

Can't your students just claim to be married?   Many married people no longer change their last name, and I have never required a copy of a marriage license with a rental application.

I hate stupid laws.  If parking or noise is a problem for the neighbors, then deal with the actual problems.  Don't make stupid laws that decrease the freedom of responsible people. 

"I hate stupid laws."

The reason for all so called stupid laws is due to the fact that laws must be designed to deal with the lowest common denominator. Responsible indivulaes may not like them but the reality is that there are many "dumb as sh*t" ignorant people out there  that could care less about other people. Stupid laws are the only solution.

Parking and noise should never be a neighbours problem. It is a landlords problem and responsibility.   

Hi @Mike Huang ,

The city/village etc can do plenty. From giving land to a University (to enable the University to build it's own housing and bring so much competition that you are chopping prices so low you cannot sustain). To changing the zoning on your rentals, to making laws that restrict tenants, forcing quarterly inspections for safety reasons to anyone with a COO, fining owners for police visits to a location, offering no more student rental house permits and only single family residences, Holding owners responsible for any illegal activity that occurs on their property (unless you are a University then hey it's just kids being kids). Designating certain areas "quiet areas".

My suggestion is to get in on the board or at a very least get to every board meeting and hear what they are planning. Then you can organize and be part of the solution with other owners before someone else decides on the best course of action. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here