Champaign-Urbana, Illinois

It is said that the rental market in Champaign, Illinois has been operating at an oversaturated level. However, the approval for development is still occurring. With a fairly low household income and large student population there is a high demand for apartment units.

Champaign-Urbana are two cities that touch each other in Central Illinois where the University of Illinois is located. There has not been a decline in student apartment development for the past 5 years in Champaign-Urbana. This is occurring even though analysis has shown that the market for rentals is oversaturated. The Medium Household income in Champaign-Urbana is $48,182.

It was estimated that in December 2017, the student apartment vacancy was at 12.9%. This was a rise from 7.4%, the year earlier. One factor that effects this high vacancy rate is increased vacancy during the summer months when many university students are not in school.

The city of Champaign says that the policy regarding student apartments is being influenced more from on campus developers, and not as much from sources like HUD.

The city of Champaign has the point of view that its city government is not to be making decisions as a result of the supply and the demand of the market. The decisions are made more from the development community locally.

And the city of Champaign has the point of view that developers are the most knowledgeable concerning:

1. If there is too much supply
2. Whether there is too much supply regarding one particular kind of housing for students
3. If there is too low of a supply
4. What should be the costs

But, it goes further than this. It’s not just that the city of Champaign has the belief that developers are the most knowledgeable about the conditions of the market, this builder knowledge is what structures zoning ordinances and forms policy of the city. The city of Champaign wants to know from the developers the limitations local ordinances have on them. Then the city goes with that information.

A problem is that it has been reported that the University of Illinois at Champaign-Urbana has had only around a 2,000 increase in enrollment since 2012. And yet, there has been an estimated increase in beds of 4,600 since then.

The writer of this article feels that the city of Champaign needs to increase its due diligence quite a bit because there are signs that it is relying on the builders too much. Things don’t seem to add up.  You’ve got so many more beds added to a much smaller number of increased enrollment numbers. Accurate numbers don’t lie. Over saturation can be a big red flag for massive future problems.

It has the appearance that the city could use some education on the law of supply and demand. And the city may need education on the need for due diligence especially when it comes to big money.

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