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San Luis Obispo Rental Market Taking a Hit as New Cal Poly Housing Complex Opens

Poly Canyon Village causes ripples in local rental market as students move into new units

by Nick
September 15th, 2008

The opening of a new housing complex at Cal Poly that added 1,500 beds on campus already has had an impact on the local rental market, with some property owners and managers saying they're taking a hit from the new competition.

They've seen more vacancies in their units and experienced delays in lining up leases, and many are holding steady with rental prices or considering reduced rents to better compete with Cal Poly.

The first tenants of Poly Canyon Village - who are all sophomores this year - moved in Sunday.

When construction of the complex is finished by next fall, it will have a total of 2,661 beds for Cal Poly students. That would bring the total number of beds on campus to 6,000 - enough to house nearly a third of the student body.

Preston Allen, Cal Poly's executive director of University Housing, says he doesn't believe the new complex would hurt business for property owners and managers who rent out affordable, desirable units in San Luis Obispo.

"Those landlords who are operating healthy, clean, responsible housing don't need to worry," Allen said. "But I think this will require some landlords to remove beer-soaked carpets, paint the walls and move beds out of the garage."

Property managers of various privately owned housing near the university say their complexes aren't filling as they used to by this time of year. And many said applications from students came later in the summer compared with years past.

"The opening of Poly Canyon Village has had an impact on all of us, and it will continue to have an impact," said Tim Kershner, owner of the Stenner Glen housing complex and a representative of Cal Poly's Off-Campus Housing Association. "But this is a capitalistic society, and we're going to have to adapt."

Stenner Glen is a few blocks from the university and markets to Cal Poly and Cuesta College students.

Stenner Glen's 600 units now have about a 70 percent occupancy rate, according to Kershner, who's considering lowering rents by 5 percent to 10 percent to help attract new tenants.

"We'd like to see more people coming in," said Sarah Smith, property manager of the Valencia Apartments, a 160-unit complex off Foothill Boulevard that she said is about 85 percent filled.

Smith said Valencia has improved its recreation center to attract Cal Poly students, who make up about 80 percent of its tenants.

Though more students have chosen to live on campus this year, California-West real estate management's nearly 600 units in San Luis Obispo that rent to many Cal Poly students have been filled.

"I think the difference between us and some of the other places like Stenner Glen is that they compete more directly with Cal Poly," said Ellie Malykont, the company's property supervisor.

Malykont said Stenner Glen has a meal plan and cafeteria - for example-which more closely resembles dorm life, she said.

California-West offers apartments and rents homes, duplexes and triplexes, she said.

But inking leases took a couple of extra weeks this year compared with last, according to Malykont.

She also noticed more people are choosing to rent near campus instead of outlying communities in the county this fall.

"I think they would rather spend the extra money on renting apartments near campus than pay for gas to drive in from out of town," Malykont said.

The competition

Poly Canyon Village consists of four-and five-story buildings with apartments of four, five or six bedrooms.

The dwellings are furnished and have kitchens. Most students have their own rooms and pay $700 per month; students who share a room pay $600 per month.

Allen said the university's goal in building Poly Canyon Village was to help students mature in an environment conducive to studying and that encourages participation in campus activities during their first two years of college.

By the time they're upperclassmen, students are better prepared to live in housing off-campus, he said.

"First and second-year students are going through a lot of developmental changes," Allen said. "And some aren't as ready to go out into the community."

This year, Poly Canyon Village had a waiting list of more than 200 students.

Allen said that the university would strive to fill the units with sophomores only. But he said officials are open to including other students if they can't fill the complex with sophomores only in future years.

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