Within the first few months of being in Winona, there was a big rush to find housing for the next year. Why on earth do I need to find a place to live so early? This is weird, I mean it was the end of October and I did not even know if I liked the people I was friends with. And I was right, it was weird. Back when my mother attended Winona State in 19**, no one looked for houses or apartments until the end of the year. In fact, that is normal for most colleges around Minnesota.
So then, why do students rush to sign for a rental so early in the year?
Well, there are a bunch of reasons why this could be, but after doing a bit of research, I think I may have found one of the culprits. In the fall of 2011, the number of undergraduates that enrolled to Winona State University was 8,441. The following year, fall of 2012, the enrollment was at 8,405. Fast-forward to the fall of 2018, the number of undergraduates that were enrolled was 7,231. The steady decline of undergraduates is not only felt in Winona, but throughout Minnesota public and private universities.
The year of 2011 is significant because this is about the same time when the 2008 recession was starting to recover. Around 8.7 million Americans had lost their jobs during this time, which meant sending their children to college or finishing it themselves was the last thing on their mind. As you might have guessed, this was bad news for colleges. This meant that they were not filling classes nor making as much money as they had been in previously years. To make up for the loss of money, colleges had to raise the cost of tuition. Winona has been no different. This change in cost has also been factor in why admission rates have fallen.
Another reason why the admission rates across Minnesota are declining is due to how so many members of the baby-boomer generation are retiring. According to Senator Rob Portman, 10,000 baby boomers were retiring each day, about 4 million each year. Glen Kessler from the Washington Post decided to fact check the senator and discovered that at the time of this statement, his facts were wrong. It is actually worse than he thought, 11,000 baby-boomers are retiring each day. This means that there are a lot of jobs that are open.
“Four out of 5 manufacturers, and 2 out of 3 employers in the mining and nonprofit sectors included in the survey were concerned about loss of talent.” That is a quote from the Chicago Tribune. Many business owners are concerned about the number of retirees. Places such as: funeral homes, bus companies, flower shops, and real estate agencies are just a few examples. With most young people working at restaurants and seasonal jobs while attending universities, Industries have been trying to get more of these young people to take the retirees’ positions. This means more people are getting off the traditional path of finishing high school and going to college, rather now they are just entering the work force. This means colleges are losing applicants because the job market is not demanding workers with degrees.
So, at this point you might be wondering, “how does any of this tell me why so many people rush to sign for rentals so early in the year?” Well hold on, we are almost there, this will all make sense soon.
As I have previously mentioned, 2011 was a notable year across the state because it is the year when most public universities admissions numbers started to decline. This meant their were less students attending post-secondary schools.
After the 2008 recession there were a lot of foreclosed houses due to people losing them because they could not afford them anymore. Landlords started to buy up these foreclosed homes because of how cheap they were. When a house is foreclosed it is being repossessed by the bank that owns the mortgage or the loan. Often the banks will turn around and sell them undervalued because they just want to get them off their hands. Often these houses are distressed and may be in need of repair.
The city of Winona houses many college students during the school year and those students need a place to live. A good number of students will choose to live off campus after their first year and most of them will choose to rent. Most of the time students will rent a house from a landlord.
So, after the 2008 recession there was an increase in the number of available houses due to foreclosure. The landlords saw these cheaper houses as an opportunity to make money. What made the deal even sweeter for them was that they didn’t need to invest much into repairing the houses since they were planning on just renting to students with low standards. I have seen a lot of the houses here in Winona, trust me, a lot of them are not pretty.
Today, there are many rental properties that landlords will rent solely to college students. But now there are fewer students and more properties. This means it gets increasingly harder and harder for landlords to fill these properties. Landlords now have to evolve if they plan on staying in business. Most of them now offer perks to make themselves and their properties standout.
For this paper, I wanted to sit down with a few landlords to hear how they have had to adjust to the loss of students. One landlord I got the pleasure to sit down and talk to, Andrea Herczeg, was probably one of the most insightful. Currently, Andrea and her husband own two buildings in Winona. Both of them are next right to the train tracks, tunnel, and Integrated Wellness Center (in the interview she says they are on campus due to their location). All together the couple can house up to 30 students. In the past, Andrea and her husband owned different properties that could hold up to 50 students in total.
In our interview, I got the chance to ask her many questions, but when I mentioned the decline of student admissions, the nod of her head told me she already knew about this trend. According to Andrea, just about every landlord in Winona, whose primary customers are students, are feeling the effects of this.
Back 2011, Andrea says she would have many groups looking at a particular property as soon as it became vacant, allowing her to pick and choose who she wanted to live there. Now, she struggles to a certain degree to fill empty spots. This has forced her and her husband to change with the times. To give you an idea on how she’s changed, her current tenants refer to her as a mom. Andrea tells me that her and her husband try to make themselves always available for calls, and when they can, try to teach the tenants how to fix problems on their own. In the winter, her husband comes out to the properties and salts the parking lot. At the beginning of the year she treats the students to pizza and gift cards to various places and during finals time she brings donuts.
Another effect of the decline in student admissions is the cost of renting. Andrea has had to drop her price from the upper 400s to around $420. I will admit her price does sound high, but the price covers everything, including utilities and a free washing machine and dryer. When a group decides to move out, she offers $250 if someone can find other people to fill up the rooms.
Now I will tie everything together to help provide a clearer answer to why, in Winona, we have an issue of people rushing to get houses at the beginning of the year.
Due to the baby boomers reaching the age of retirement, many jobs, previously occupied, have become available. Many of these available jobs do not require any sort of degree to be done; attracting young people to enter the work force right away after high school instead of pursuing a college degree. Because of the 2008 recession many people lost their jobs and homes. Due to this financial upset, people had to do without many luxuries. Unfortunately, one of these luxuries was the chance for either put themselves or their children to attend a post-secondary institution. So, because of both people not being able to afford college or finding a better opportunity in just entering the work force, there has been a constant decrease in the amount of people applying to schools. Due to the decrease in admissions, universities have had to raise the cost of tuition, deterring even more people from attending school. Because of the loss of students, landlords have been finding it hard to fill their properties. Landlords have had to adjust to the loss of potential residents by finding new ways to make themselves standout. This also means advertising to students right away at the beginning of the year to convince students that properties are being filled up fast and if they do not sign for a rental soon, they will miss out.
How do I know this?
At the beginning of the year I went with my sister to tour one of Andrea’s properties. She had told us that properties fill up fast and that if you want the best building, you need to sign now. She was not the only landlord that said this, many others I talked to had said the same thing at the time.
The answer to my own question of why is there such a rush at the beginning of the academic year to sign houses is simply that there is no rush. Landlords just want their properties filled and they have decided to do this through fear-mongering the students into signing now.
As of the end of March, Andrea still has not filled all of her properties.
