The Bust Of College Boom Towns: How Falling Enrollment Affects Local Economies

Chloe Fitzgerald

4 min read

Post on May 20, 2025

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Declining Property Values in College Boom Towns

The relationship between student population and property values in college boom towns is undeniable: a thriving student body translates to high demand for rental properties and associated services. However, declining enrollment directly impacts this dynamic, leading to significant property value drops. Towns heavily reliant on student housing see a dramatic decrease in demand as fewer students seek accommodation. This results in:

• Fewer rental properties needed: Vacancy rates soar, pushing rental prices down and reducing the income of property owners.
• Decreased demand for student-oriented housing: Properties specifically designed for students, such as apartments near campus, become less desirable, further impacting property values.
• Impact on the local real estate market: The overall health of the real estate market suffers, affecting not only landlords but also homeowners looking to sell.
• Struggling landlords and property owners: Many face financial hardship due to decreased rental income and reduced property values.

Examples of towns across the country are demonstrating these alarming trends, highlighting the vulnerability of economies heavily dependent on higher education.

Increased Unemployment and Business Closures

College boom towns often boast a robust economy driven by businesses catering specifically to the student population – restaurants, bars, bookstores, and other student-centric services. When enrollment plummets, the demand for these goods and services falls precipitously, leading to significant job losses. This ripple effect can be devastating:

• Reduced demand for goods and services: Businesses reliant on student patronage experience a dramatic drop in revenue.
• Closure of student-focused businesses: Many businesses are forced to close due to unsustainable operating costs and lack of customers.
• Impact on local employment rates: Unemployment rises sharply, affecting both employees of student-focused businesses and those in related sectors.
• Increased competition for remaining jobs: The limited remaining jobs become highly competitive, exacerbating the economic hardship faced by residents.

This increased unemployment contributes to a vicious cycle, further impacting the local economy and quality of life.

Strained Local Budgets and Reduced Services

Colleges and universities are major contributors to the tax base of many college boom towns. Their presence generates significant property tax revenue and supports local government budgets. However, a decline in enrollment directly translates to a reduction in this crucial funding source, leading to:

• Decreased property tax revenue: Lower property values and reduced student housing demand contribute to a significant decline in property tax revenue.
• Cuts to public services: Local governments are forced to cut essential services such as schools, police, fire departments, and other critical infrastructure projects.
• Impact on quality of life for residents: Reduced public services negatively affect the overall quality of life for all residents, not just students.
• Potential for increased taxes on remaining residents: To compensate for lost revenue, local governments may be forced to increase taxes on the remaining residents, further exacerbating economic hardship.

This financial strain on local governments underscores the interconnectedness of higher education and the overall well-being of the community.

Adapting and Diversifying the Economy of College Boom Towns

The decline in college enrollment necessitates a proactive and strategic approach to economic diversification. College boom towns must reduce their reliance on higher education institutions by attracting new industries and fostering local entrepreneurship. Successful adaptation strategies include:

• Attracting new industries and businesses: Incentivizing businesses from diverse sectors to relocate, creating new job opportunities and broadening the economic base.
• Investing in infrastructure and tourism: Improving infrastructure to attract tourists and developing tourism-related businesses to stimulate economic activity.
• Supporting local entrepreneurship and small businesses: Providing resources and support for local entrepreneurs to start and grow businesses, creating jobs and economic opportunities.
• Developing a stronger online presence and remote work opportunities: Leveraging technology to attract remote workers and expand the economic reach of the town.

Learning from other towns that have successfully navigated similar challenges is crucial for developing effective strategies.

The Future of College Boom Towns – A Call to Action

The challenges facing college boom towns due to declining college enrollment are multifaceted and demand immediate attention. Declining property values, increased unemployment, and strained local budgets are interconnected issues that require a holistic approach. Economic diversification is not merely a desirable option but a critical necessity for the survival and prosperity of these communities. Understanding the challenges facing college boom towns is crucial for their survival. Learn more about how you can support your local economy and find ways to help revitalize your struggling college boom town. Proactive planning and community engagement are key to building a resilient and sustainable future for these vital communities.