Increasing rent costs reflect housing values

While the cost of a Penn tuition is certain to increase every year, so are rental rates for off-campus houses and apartments.

It may be that fairly drastic changes in local real estate prices are causing the spike in rental rates. From 2000 to 2002 alone, the average sale price of a house or condominium in University City rose over 60 percent, according to a University City District annual report.

Lori Brennan, a University City District spokeswoman, acknowledged that rising home prices could be influencing rental rates, although her organization does not monitor rental prices.

The rising cost of housing is "also true for the surrounding area as well, anywhere in the region," Brennan said.

Bill Groves, the operations manager for University City Housing, attributed the rise in area housing prices to the even higher prices that are found in Center City.

"University City has certainly become more popular in recent years, in part because the rents in University City are significantly lower than in Center City," Groves said.

That recent popularity began when the Center City housing market was booming about five or six years ago, Groves added.

"The rents of University City in comparison with other neighborhoods have fluctuated wildly over the years," Groves said. "There was a time when the rents in Center City were just skyrocketing through the roof."

Groves added that he expects rental prices for UCH properties to rise slightly for the upcoming year, although not as much as many of the competing landlords in the area.

"We expect ours for this upcoming rental season to average roughly 2.5 percent. [But] a 2.5 percent increase isn't a great increase in the scheme of things."

Besides increasing property values in the city, one local property manager attributed the annual price hikes to increasing utility prices, along with higher insurance rates.

However, some students are not convinced.

"They say it's a real estate tax, but we feel we're not getting the whole story," said College senior Jessica Morris, who has lived off campus for three years and seen the price of her apartment rise each year.

"As far as I know, real estate insurance hasn't increased, and we pay our own utilities," she said.

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