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Housing Boom A Mixed Bag In State College

apartment building
Anne Danahy

Aviva Franz, a sophomore at Penn State, is leaving her apartment in the Metropolitan on a breezy fall day. She moved into the new, upscale building in downtown State College at the end of August.

“It definitely offers more, but there are tradeoffs," Franz said. "Like, it’s definitely more expensive than some of the other places. We do have a gym in the building, even though it’s small, and we do have a study lounge.”

The Metropolitan is one of the new high-end developments in State College. For Penn State students looking for new, well-appointed apartments close to campus, the buildings are a plus.

They also mean growth and development in downtown State College and nearby, which can be good news for the economy.

But for families and renters looking for affordable places to live, the boom in student housing is a mixed bag. The high rises also mean a change in the feel and appearance in parts of town.

Jim May, director of the Centre Regional Planning Agency, said the inventory of housing in the area had not improved in a while. But, over the past few years it has.

“I think for the foreseeable future, you will continue to see growth in the student housing market,” May said.

Between 2,000 - 3,000 new student units have been proposed or are under construction in the past few years. May said a lot of that comes from large national developers attracted to the area.

For one thing, the vacancy rate — the number of empty apartments in a building — is still very low. Nationally, that number is about 8 to 10 percent. With Penn State students nearby, the rate in State College is closer to 4 or 5 percent.

Eventually, the housing market in the area might max out, May said, but, that hasn't happened yet.

“There will come a time when the last person in is the one that probably loses money, but I don’t see that happening for quite a while,” May said.

Clio Andris, assistant professor of geography at Penn State, uses data to track trends in cities. She said pricing can have a trickle-down effect.

“If a student used to be able to rent a room in a house for $350 a month and they’re seeing this $2,000 a month condo, the people next to it feel like they can now command more and those students do get pushed out to the periphery, or they can’t afford to come to University Park anymore and they might consider a branch campus,” Andris said.

In the Fraser Center downtown, the cost to buy an apartment ranges from about a half million dollars to $1.5 million, according to a recent listing. Rent for a two bed, one bath apartment in the Metropolitan comes up in one onlisting at $1,700.

The impact the development has on the relative cost of older housing will play out over time.

May said the hope is that as students move out of rental homes into new apartments, it opens the opportunity for older houses and townhouses to become available to residents as rentals or purchases.

“One of the things that’s been true of the borough for a long time, is it’s been absolutely oriented toward students," May said. "And I think some of these bigger projects have an opportunity to change some of that and make it more of a place where families and others and single people will want to live in the future.”

Ed LeClear, State College planning director, said the building boom could  bring some rental prices down.

“As that supply comes online, I think you are going to start to see some vacancy rates in some of the other buildings, and that will have some downward pressure on rent,” LeClear said.

So, as the luxury high-rises and cottage-style housing complexes go up, standard buildings that may be showing the signs of age or not have extras like private bathrooms could have higher vacancy rates. In turn, they could become more affordable.

LeClear said the borough wants to attract businesses to town too.

“Yes, we’re going to get student housing, but we also want to get retail and offices as well,” LeClear said.

Andris said growth and development can be a double-edged sword.

You want money and business to come into the area, at the same time you want to maintain the local feel and culture.

“It makes it more sterile, and it’s a little bit sad to see that happening on one side," she said. "On the other side, we do want to make this a viable community. So, we have to strike a balance there.”

Finding that balance has been the goal in State College. LeClear says there was a recognition of the need to grow. At the same time, the borough modified its zoning to help keep the Main Street character in central downtown. 

Anne Danahy has been a reporter at WPSU since fall 2017. Before crossing over to radio, she was a reporter at the Centre Daily Times in State College, Pennsylvania, and she worked in communications at Penn State. She is married with cats.