I am constantly inundated with ads to move to one of the flashy student high-rises. For someone who had to scour for a lease in an ordinary apartment, the surplus feels surreal. These purpose-built student accommodations somehow orbit outside Eugene’s strained rental market.
While our city limps at a vacancy rate of 3.45%, well below the “healthy” 5%, PBSAs have swelled to 8.25%.
This is the direct legacy of a decades-long construction blitz fueled by real estate investment trusts (REITs) and private equity chasing predictable revenue streams. While the student population only represents 10% of Eugene’s housing market area, PBSAs accounted for nearly 33% of all new rental construction since 2010.
Why did capital investment flow so disproportionately into student high rises?
A lower risk profile plays a role. Because PBSAs lease by the bed, revenue largely stays intact even if one roommate bails, and a parent cosigner stands behind nearly every contract. College enrollment also usually holds firm when recessions hit; rent checks keep coming even as conventional landlords brace for missed payments.
Higher profit margins sweeten the lure. PBSAs face brisker turnover compared to their conventional counterparts, letting landlords raise rent prices quicker and with minimal resistance.
The result is a city that now operates dual rental markets: the starved traditional market and the oversupplied PBSA market. Paradoxically, not enough, yet too much.
The imbalance is poised to widen. While UO has posted record-high enrollment for several years, 2023 appears to mark the trend’s plateau, with lower enrollment continuing from 2024 onward. National demographic headwinds suggest this is only the beginning.
Moreover, it is just as important to note who these future Ducks are: the proportion of in-state students is climbing while out-of-state enrollment is waning.
The demographic PBSAs were engineered to attract, therefore, are shrinking, while the construction of PBSAs, seen by new proposals, continues onward. Today’s 8.25% vacancy rate will surely wade into double digits soon.
This is a major problem. These PBSAs take up space, demand time from permit holders and occupy much-needed tradesmen while no longer fixing a gap in Eugene’s housing market.
They’re also incredibly hard to convert to regular housing due to their wonky floor plan with a bathroom for every occupant and generally poor construction.
A resident at a recently built PBSA, third year Alyssa Waterson explained how she faced flooding in this brand-new building and had to “keep everything off the ground in fear of it being ruined.”
When I asked Waterson why she’s returning this year, despite believing “[she] should not be paying the amount [she is] for the quality I’m getting,” she said. “We just had to find a place to live — that’s the reality of student housing in Eugene.”
Students are feeling the pain of this dual housing crisis: with conventional listings quickly snapped up, many have no choice but to sign the inflated but readily available PBSA leases, draining loan budgets and paychecks alike while the promised “luxury” leaks, molds or floods around them.
Non-college residents endure the same squeeze, watching rents climb while vacancies vanish.
I do not advocate for government intervention lightly, but this is an instance where it may be needed.
The City of Eugene has the most direct lever of power. No building can rise without the city’s approval, so being more intentional with its permitting process can aid in a much-needed private sector correction.
After all, when looking at building plans, it’s not that hard to tell who the space is meant to serve.
Lynn Porter • Jul 20, 2025 at 3:45 pm
David,
Thanks for writing this, good solid reporting.
Are these “purpose-built student accommodations” in fact supported by city tax breaks? MUPTE (Multi-Unit Property Tax Exemption). I believe I heard that the City Council had changed the rules a while back so that student housing could no longer get the tax breaks.
Charlie • Jul 18, 2025 at 11:59 am
For years, Eugene has given away property tax breaks to “incentivize” construction of vastly overpriced apartments. Developers and investors took advantage of those benefits, which also fueled fabrication of student apartments. Along with taxpayer subsidized student loans guaranteeing rent payments, the CRE market was skewed to tenants which received government subsidies. That would be seen with HUD Sectiin 8, and students borrowing Department of Education subsidized debt.
But, that’s all changing. The Trump administration is cutting HUD rent subsidies, as well as shutting down much of the DoE, indicating student loans will no longer be subsidized to the extent as before.
For some reason, institutional investors, Eugene, and UOwe administrators, believed the Federal magic money train would never derail. It was an empire of debt that kept the doors open at UOwe, and maintained occupation ridiculously over priced student housing. Unfortunately for them, the political sentiment in D.C. has vastly changed…
JS • Jul 19, 2025 at 9:58 am
These apartment buildings are ridiculous and a symptom of unchecked greed. I find it curious, however, that you covered all the conservative talking points while failing to acknowledge that their leader made his wealth through exploitive real estate practices. Furthermore, you then go on to praise policy changes that will impact access to higher education for middle and lower income students. Families whose tax dollars are collected and then dispersed to all manner of corporate subsidies. No one is arguing that costs around higher education don’t need to change— we need big reforms. But hinting at access to funds for higher education as a somehow contemptuous practice, misses the point. Higher education is an investment in upward class mobility and ensuring that a nation has an educated workforce. It’s ensuring that America remains a competitive nation. Furthermore, whose kids do you think will go to college when lower and middle class kids can’t go? Do you think Congressional member’s kids will stop going? Or wealthy kids? Are you arguing for a return to “Only doctor’s kids become doctors?” (Also as a reminder, our current sitting president’s kid is currently in college. And, over 90% of Congress has a college degree.) The reforms of which you praise are going to funnel families into onerous private student loans with predatory loan practices or the painful choice of no higher education at all. America has massive problems with costs for higher education, healthcare, housing prices. But it seems that your talking points boil down to simple answers— “Help no one. Let the wealthy do what they want. We are not a collective nation that rises and falls together.” Education has taught me that this limited viewpoint doesn’t usually work out well for the ruling class in the end. Unfortunately for those in D.C., Americans are waking up to their anti-average-citizen policy positions, and what comes next? History offers some answers.
Charlie • Jul 21, 2025 at 1:17 am
My father attended UCLA when the UCs were free. That was true up until the mid 70s. Dad’s family fled Mexico during The Revolution. He was the first in his family to attain an American university degree. While tuition was free, living expenses were not, and he worked his way through college, as did millions of other Americans. There was as no such thing as taxpayer subsidized student loans because public universities were suppose to actually be affordable by working to pay tuition, or saving enough money to attend.
In California, community colleges, which imo, were the best value post k-12, fees amounted to $20/term up through to late 80s. Not per credit, or unit, the entire cost was $20 per entire term. CA CC’s were working class institutions, and were highly efficient gateways to four year institutions. All my community college credits from City College of San Francisco transferred to University of San Francisco, a private university where I paid tuition by working full time in the summer, part time during the school year, for UPS. That’s affordable college tuition, not one predicated on $1.8-$2 Trillion in student loan debt, which doesn’t allow for bankruptcy. You’ll need to explain how the current system of debt based college attendance in anyway serves the working and middle class.
And you have no idea of my political sentiment, nor party affiliation. Nowhere do I praise DJT, rather I’m telling you what he said would be his administration policies. That being, the preservation of single family neighborhoods, the diminution of Sec 8 and other HUD rent and housing subsidies, and the elimination of the Department of Education. He campaigned on those platforms, which was long known by anyone who paid any attention. DJT’s policies are the opposite of Biden/DNC’s policies, but that happens with changes in almost all Presidential administrations. A university operative, local politician, or municipal bureaucrat, if they were doing their jobs, would realize the Federal magic money train was gonna derail, and unlike you, they needed to do their jobs based on economic reality, not wishful thinking, feelings, nor any political ideology.
The faculty of the University of California published a monograph entitled, THEY PLEDGED YOUR TUITION. I suggest you read it, as well everyone else. What they found was that little of the massive increased tuition at the UCs made its way into the classroom. Instead, student loans were pledged as collateral for the debt which funded all that on campus construction, including that at UOwe. Who do you think invests in those construction bonds which your loan payments continue to make wealthier? And you’re pretending to care about the fate of college students?