The U.S. Student Housing Crisis: Lumi House CEO Talks Real Estate Macrotrends Impacting Student Renters
By David Thompson
Jul 18, 2023 04:24 PM EDT
Jul 18, 2023 04:24 PM EDT
The U.S. Student Housing Crisis: Lumi House CEO Talks Real Estate Macrotrends Impacting Student Renters(The U.S. Student Housing Crisis: Lumi House CEO Talks Real Estate Macrotrends Impacting Student Renters) (Credit: Getty Image)
There's a reason shelter and security are fundamental necessities according to Maslow's hierarchy of needs. But as 20 million college students face a form of homelessness or housing instability in the United States, the concern around student welfare is growing. And according to Ryan Stohl, CEO of Lumi House, macro trends impacting the national housing market are partially to blame.
"Between the under-development of on-campus housing and the staggering costs of living anywhere else, students are being priced out," says Stohl. Founded in 2022, his company offers students an all-inclusive, co-living solution.
Today's housing market is costly. Inflation and supply chain issues continue to drive up construction costs, forcing developers to focus on a specific target audience to meet their bottom line.
"For many developers, students are not a relevant market. Because of more stringent regulations and increasing construction costs, developers are forced to target renters with a lot of disposable income. They are building with an established adult in mind, someone in their thirties with a high-paying job," explains Stohl.
Heavily populated urban areas have a more acute problem, especially if a college campus is nearby. New developments almost always favor luxury apartments and condominiums with monthly rent prices far outside a student's budget. Stohl points out the situation is even more dire in cities already known for their high cost of living, such as San Francisco or New York City.
An unpredictable housing situation can have severe impacts on a student's educational experience. Poor academic performance and high levels of stress, anxiety, or depression have been connected to an unstable living situation. Student safety is also a concern, as some college-goers turn to couch surfing, public hostels, or sleeping in their vehicles. It can mean students must put their studies on hold or abandon their college education altogether.
When renting with Lumi, a student's rent covers everything they need not only to survive, but thrive: A fully-furnished home, utilities, parking, smart-home features, landscaping, and twice-a-month cleaning. Even household necessities like WiFi and streaming services are part of the all-inclusive monthly cost.
While universities play a vital role in addressing the housing crisis, they face limitations. Limited space for additional on-campus student housing, costly housing subsidies, and the trouble of establishing effective partnerships with off-campus providers can severely hinder a school's attempt to meet housing demand.
"Lumi is the perfect partner for universities. Off-campus apartments are too expensive to begin with, and it would be unfeasible to partner with every individual landlord. We fill a role desperately needed by universities," says Stohl. Lumi started in residential areas surrounding the University of Miami, hosting 11 properties within walking distance of the school's campus.
But developers are not the only ones shying away from off-campus housing. Homeowners in suburban areas also voice concerns about student-friendly apartments, according to Stohl-a sensation called NIMBY-ism or "Not in My Back Yard."
He explains, "These homeowners don't necessarily want multi-family complexes being built up the road due to the increase in traffic, people, noise, or even crime risk. They're just very much against anything that might change their neighborhood."
It poses a unique challenge for creating off-campus housing options. But Lumi might have found an innovative solution. The proptech company partners with homeowners and landlords to transform single-family homes near college campuses into student-friendly rentals. Lumi doubles as a cost-effective property management solution, addressing the needs of both student renters and landlords.
Stohl is already working to launch Lumi as a living option for students in Boston and Atlanta following the company's pre-seed investment round. Tour current Lumi properties and the brand's solution for all-inclusive student housing at lumi.house.
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