Cut-rate student housing and a job fair for displaced University of Missouri employees are among the first signs of how budget cuts and declining enrollment will impact Columbia.

Landlords eager to lease bedrooms before the semester ended last week were offering gift cards of up to $1,000 or rent reductions worth the same or more to lure renters. They are getting squeezed from two directions – the number of upperclassmen allowed to live off campus will drop by about 1,400 and new buildings a few steps from campus will add almost 700 units to the market.

TwinRock Partners of Newport Beach, Calif., last year purchased the 450-bed Gateway apartments on Buttonwood Drive for $21.6 million and rebranded it the Lyfe at Mizzou. The company is advertising a no-money-down lease, giving away $250 per tenant gift cards and is waiving the $100 application fee. It is offering the same deal at the Row, which has 328 beds in townhouse units.

The offers are intended to match or beat the deals other landlords are offering, said Alexander Phillips, CEO and CIO of TwinRock Partners. Students are waiting before signing leases to see where they can get a better deal and everyone is fighting to fill beds, he said.

“You just have to be aggressive and competitive in this market,” Phillips said.

This fall, the university is expecting its smallest incoming freshman class in almost 20 years. Overall enrollment will decline, perhaps as much as 6 percent, as 5,484 students depart following graduation and this year’s small freshman class advances.

Fewer students means less tuition revenue. That loss, combined with a 6.7 percent cut in state funding, has campus leaders looking to cut expenses by 12 percent. Layoffs in the Division of Operations will eliminate 20 jobs on July 1 and more are likely. More details about how budget cuts will be implemented are expected at campus forums Monday and Tuesday.

The Columbia Chamber of Commerce will hold a job fair soon to help university employees find work, chamber President Matt McCormick said last week.

“Our board of directors voted last month to work with the university as they figure out budget cuts, layoffs, things like that,” McCormick said.

Since World War II, growth at MU has meant growth for Columbia. The university’s spending on goods and services supports numerous local businesses and spending by employees and students helps make food service and retail trade the two largest sectors of the private workforce.

“We are intimately linked together,” McCormick said.

In the past, the economic power of MU and other colleges in Columbia has kept unemployment lower than other portions of the state. When unemployment peaked at 10.5 percent in Missouri in February 2010, the rate locally was 6.6 percent. In March, the state rate was 4.2 percent, with unemployment in Boone County at 2.7 percent.

One component of MU’s impact on Columbia are visitors coming for sporting events, especially football and basketball. Attendance for football in 2016 was down almost 13,000 people per game from 2015 and the men’s basketball team filled, on average, only 9,930 of Mizzou Arena’s 15,000 seats.

So far, restaurant and hotel owners aren’t too upset by the drop off, said Megan McConachie, spokeswoman for the Convention and Visitors’ Bureau. Other events, such as True/False Film Fest and Roots N Blues N BBQ Festival are growing, she noted.

“I don’t think we were ever fully dependent on the university to draw in visitors, but it is an extremely vital part of what we refer to as our tourism product,” McConachie said.

And commercial real estate is doing well with high occupancy rates for industrial, office and retail space, said Mike Grellner of Plaza Real Estate. Changes at the university are causing uncertainty, but rents should be stable, he said.

“People are concerned but we can’t point to any data or statistics and say they are a reflection of dropping enrollment,” Grellner said.

The student housing market, however, was already feeling a pinch before the drop in enrollment. A report presented to the Columbia City Council in November found that new downtown housing was already proving to be a stiff competitor for sites further out.

The report found an average vacancy rate of almost 10 percent, with the rate almost 13 percent more than a mile from campus. Of the participating complexes, 18 reported plans to advertise their units to nonstudents, and seven reported lowering rent to help fill vacancies.

Along with discounts or premiums, landlords are selling service to attract tenants. TwinRocks provides shuttle services that begin at 7:30 a.m. and finish running at 2:30 a.m., Phillips said.

But the company can only cut rates for so long, he added.

“How strong the school and state will be will determine whether or not we are happy with our investment,” he said. “If they don’t get their act together and drive up enrollment again, we will be licking our wounds.”

rkeller@columbiatribune.com

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