i am writing a paper for my first year economics' class and my essay topic is why is housing prices around colleges and universities higher? i just need main ideas i can talk about or prove in my essay and how it replys to economics.
Some ideas that you might pursue include: 1. Universities have a tendency to drive local economic activity. Consider sports events and visiting families and prospective students and how they benefit local businesses. Also, small businesses in the area have access to cheap labor (college students), so near universities is a place that small businesses thrive. This makes residential and commercial development more desirable in the area. With limited supply of commercial and residential property available in close proximity to universities, the higher demand has a tendency to increase prices. 2. Professors and other university staff want to be close to the university, making houses within a short distance in high demand. Again, limited supply and high demand increases the home prices. 3. Investors see homes near universities as a great rental property. Often parents will help with rent or there may be multiple tenants that are able to share the rising rental charges to keep them affordable.4. Often donors will contribute to their favorite university which stimulates growth of the campus as well as great maintenance and improvements to the landscape. The attractive campus may even provide a great view for some property - again, increasing the demand for the limited product.5. There likely would be a higher percentage of college-educated or soon-to-be college-educated individuals and families near a university. The higher education leads to higher incomes which home builders near the university would cater to. Thus, there are likely to be middle-class and higher houses in the area. These houses will be priced higher than in other parts of town. 6. There is a scarcity of homes that are in close proximity to the university. Scarcity causes people to make choices which involve costs. Opportunity costs should also be considered.7. Having a home near the university that is within walking or bike riding distance can save on transportation costs for students or faculty.Let me know if you have any questions or need additional ideas. I will try my best to help out in any way that I can. Just let me know! Thanks!
so is it supply and demand?
Supply and demand is the major reason why the housing would be higher near colleges and universities. You would want to point out everything that increases or shifts the demand curve to the right. With a fixed supply (or at least limited growth potential for supply) and the increased demand, the price equilibrium is increased (thus, the prices go up). There is a lot of cost-benefit analysis and reasons for the demand, which I would focus on in the paper. Also, economic concepts such as scarcity, the price elasticity of demand, and opportunity costs could be explored.