Q & A with Gary Painter

Talk about real estate in general in the USC area. Is it getting more difficult to find housing? What do you think of Conquest Housing?

I’m not super familiar with the Conquest corporation other than the recent media reports and billboards. And of course what they’ve been doing in terms of real estate in the area. The general issue that’s been true in LA and other major metropolitan areas is that there haven’t been enough multi-family units in basically the past two decades. Because of that the prices have gone up and up as I’m sure you’re familiar. We have a desperate need in these areas to develop more housing units. Conquest as a company has decided that they want to try to capture the student housing market because of the need that exists. It’s certainly true that we need units and if they can provide that than its certainly not going to hurt students. It provides them another option. I think it could only be a good thing from an overall housing policy prospective. Um, their approaches to advertising have caused some problems at least from what I’ve heard but I haven’t seen anything myself.

Conquest bought out our apartment that was previously owned by a family, more than doubled our rent and then didn’t guarantee we’d get first dibs on our apartment next semester. How do you feel about this more than doubling of rent and do you think this is a trend that will continue? Is it normal? Will people still keep paying?

In terms of overall rents, according to the latest projection from the Casden forecast here at USC, what’s happened over the past 6, 7 years is house prices have shot up dramatically, certainly more than doubled and rents haven’t been able to go up quickly because of leases and so forth. So there’s a lot of upward pressure on rent. And the special case of doubling in such a short period, its hard to say if that is market-based or if they’re trying to exert some sort of monopoly power by buying all this student housing without actually knowing it. There’s certainly a lot of pressure on rent to go up to keep pace with the housing market. Were gonna observe for a while a period of house prices staying stable and rents skyrocketing. I don’t know if Conquest is exasperating that or if that’s just what the market is bearing right now.

With prices going up so much, it’s interesting because it seems a lot of students at USC actually own some properties around the school. They are charging their peers rent. Does this seem to be a trend?

Over the past few years a lot of people have invested a lot of money in real estate because it was a market that was doing so well. I would expect that as the market calms down, you’ll see less people investing in real estate and more people investing in the traditional stock market. It’s indicative of what happens in the market in the past.

It seems that wherever there is student or college housing there are always issues that arise over housing? Are there certain trends/issues that you have noticed have been prevalent in the USC area?

When I came to USC more than a decade ago there were less options for students near campus or downtown. I think options for students have gotten better in terms of how many different places are available. What you also see during that period, is there’s been a time of dramatic increases in prices. Students might think things are getting worse and worse. And the reality is things have gotten higher but there are more options than there used to be. When I got here there weren’t many students that lived downtown nor was it seen as viable for them. Things have gotten better and worse but different forces have caused different things.

Many parents who know their children are coming to USC, invest in houses and apartments nearby. Have you noticed an increase in parents’ investment in real estate near USC or has that been a consistent trend throughout history?

Usually only when the market is such that it makes sense from an investment standpoint. Parents are doing that because real estate has been a good investment so they’re like “Why not invest? This will help out our family as well.” It’s more indicative of it being a good investment. You won’t see it at times that housing is going down.

As someone that is knowledgeable in real estate, what would you tell a student looking for off campus housing whether in downtown, near campus or in other parts of LA? What would be the best option? Are they getting ripped off by staying near campus? Would they get a better deal if they went to West LA and commuted?

I wouldn’t tell students you should go to this place or that. It’s all part of choice. USC of course wants the neighborhood to be the best place it can be for students. It’s part of the experience at USC. Part of that is it ends up costing more. The better the area is, the more it costs. There’s no evidence that developments like Conquest Housing are deliberately gouging students. There’s just a lot of demand for this area both from students and from other people who want to live near downtown, where they work and not have to travel so much. I think that’s the reality of living in a major metropolitan area.