Concentrations of students inevitably alter the natural ecology of neighbourhoods, because they contribute to a-typically high rates of churn. In some respects the effect is doubtless beneficial and in others it won't be.
Length of residence, on its own, can be misleading as an indicator of neighbourhood quality of life. But the usual assumption is that people who are not expecting to stay for long in a neighbourhood are generally least likely to invest in relations with their neighbours. The higher the proportion of these 'under-investors,' the more likely that there is a negative effect on neighbourhood quality of life.
If you're a student in this situation, you can over-compensate for the comparatively small capital investment you are making in the locality in all sorts of ways - helping with shopping, baby-sitting, odd-jobs etc for neighbours, and generally being considerate of course. But you have to do so proactively, or live with the perception that you are not 'pulling your weight'. Universities tend to take seriously their relations with their towns and cities, but I'm not aware that they do much to encourage students to consider neighbourhood social relations.
So is it best to let the market dictate, or should councils have policies to minimise the extent to which students in houses in multiple occupation (HMOs) are concentrated in any given area?
Oxford City Council has announced a threshold of 20 per cent of houses in any 100 metre stretch of residential street, for all new houses for student tenants. (They do not have the power to reduce the existing percentage in a street if it's already higher than that). I can't see it catching on, but it will be interesting if it does.
For a theory of the neighbourhood based on economic principles of transaction costs and property rights, see a paper called 'The nature of the neighbourhood' by Chris Webster in Urban studies, December 2003 (subscription).
Webster notes in passing that:
'Owner-occupiers and long-term tenants have an economic incentive to deploy private resources in investments that yield collective neighbourhood benefits. Neighbourhoods characterised by short-term tenancies — such as student quarters, inner-urban high-density rental areas and some types of social housing — require institutional structures that provide incentives to act with restraint in the use of common resources and that encourage investment.'
