The New York Times has an interesting article examining how the downturn in the real estate market in Merced, California has led to hundreds of college students renting luxury homes in overbuilt areas.
The city has been one of the country’s hardest hit by home foreclosures (it is ranked third nationally, behind Las Vegas and Vallejo, California) and students from the University of California are facing a shortage of dorm space (5,200 are enrolled, with room for only 1,600 students in the campus dorms), so they have been presented with an unusual housing opportunity.
Paying just one-tenth of what their neighbors are charged each month, they find themselves in huge luxury houses with three-car garages, whirlpool baths, jacuzzis, walk-in closets and chandeliers.
The finances of subdivision life are compelling: the university estimates yearly on-campus room and board at $13,720 a year, compared with roughly $7,000 off-campus. Sprawl rats sharing a McMansion — with each getting a bedroom and often a private bath — pay $200 to $350 a month each, depending on the amenities.