College Students Stuck in Leases as Classes Move Online
September 2, 2020
Many college students signed leases for housing months before the start of the fall semester. But as more colleges move their classes solely online for the fall due to the ongoing pandemic, these students are finding themselves increasingly stuck in leases they no longer want.
Several schools—such as Harvard University in Cambridge, Mass., and University of California schools—announced this summer that they were opting to mostly go online for the fall semester. Other schools, like University of North Carolina at Chapel Hill and Michigan State University, changed shortly after the school year began from in-person learning to remote classes for the remainder of the semester.
This is putting college students who have leases in a predicament to try to get out of their financial obligations. It’s also proving a risk to landlords who own properties that rely on a steady stream of college students as tenants.
"The landlords often save up for years to buy units in these college towns, thinking it’s going to be a stable source of income, and then the bottom falls out," Joseph Tobener, a tenants rights attorney based in San Francisco, told realtor.com®. "Nobody could have predicted this.”
Philecia Klein, a University of North Carolina senior, told realtor.com® that she’s unsure if she’ll be able to break the lease for a two-bedroom apartment she’s leasing near the university. Her roommates bailed due to the pandemic, and she had signed a lease solo this spring. Last month, the school canceled in-person classes and moved to online learning due to the coronavirus outbreak. Now, Klein’s father, who co-signed for her, is on the hook to pay $1,040 a month. They are unsure if they’ll be able to break the lease. Klein told realtor.com® that she plans to pay her father back. But without being able to physically go to class, she plans to move back home to save costs.
Many college students in busy areas must sign leases in January or February to guarantee housing for the fall semester. Breaking a lease isn’t cheap. In some areas, roommates are being charged $750 to $2,000 a bedroom. A four-bedroom house could be up to $6,000 to $7,000 a month.
Before the pandemic, rental properties near college towns usually only had a 0.5% to 1% vacancy rate, Eugene Chang, a real estate broker with College Town Realty in Davis, Calif., told realtor.com®. But with more classes being held remotely, he expects vacancy rates to reach 10% by October.
Prices on near-campus housing are dropping due to the decreasing demand. “Tenants desperate to sublease their units are offering to pay $500 to $700 of the monthly rent to attract folks to take their spots,” realtor.com® reports.
“College Town Crisis: As Schools Go Online, Students Are Stuck in Ironclad Leases,” realtor.com® (Sept. 2, 2020)
Updated: October 29, 2020