The University of South Carolina's Darla Moore School of Business released a study in January that analyzed the economic impact of the university on Columbia and South Carolina.
The USC system produces $7.4 billion in economic benefits for South Carolina annually, with USC’s flagship campus in Columbia contributing $3 billion to this amount, according to the study.
This is a 35% increase in economic benefits for the state from the most recent study conducted eight years ago.
“The University of South Carolina has been vital to the growth and prosperity of the Palmetto State for two centuries and continues to demonstrate its role as a leader in boosting South Carolina’s economy and workforce,” South Carolina Gov. Henry McMaster said in a press release.
The university system’s impact reaches across the state, Joseph Von Nessen, a research economist at the Darla Moore School of Business and developer of the study, said.
“[The $7.4 billion] supports nearly 62,000 jobs statewide and about $3 billion in labor income for South Carolinians and about 63% of USC’s in-state alumni currently live and work outside of the Midlands region,” Von Nessen said. “So it's truly a statewide impact.”
USC’s flagship campus provides $4.2 billion of economic output annually in the Columbia metropolitan area, according to the study. Additionally, one in 10 jobs in the Midlands are supported by the university.
The Daily Gamecock spoke with experts, local businesses and students to illustrate the impacts of the university on the City of Columbia.
Local small businesses
For Columbia’s Five Points district, the impact of the neighboring university is critical, according to several small business owners in the area.
Woody Jones is the manager of Papa Jazz, a record store on Greene Street. He has been in Columbia for almost 25 years and is a USC alumnus. Five Points’ geography and proximity to the university also draws non-student customers, he said.
“The students are a big part of the retail culture down here,” Jones said. “By extension, there are just people in general who come in the store, who aren’t necessarily students, but they're coming because the university is here.”
Kailey Cunningham and Roger Caughman run Godspeed, a pop-up coffee shop sharing a building with the Boyd Innovation Center on Saluda Avenue. In addition to the direct impact of the students and faculty frequenting Five Points businesses, events like football games bring in potential customers from out of town, Cunningham said.
“It’s a hub,” Cunningham said. “It’s like a neighborhood where all the stuff is, so people know to go there. They all get funneled into this little area.”
The traffic from the university helps to support a variety of similar stores, compared to areas like Lexington, South Carolina, where the duo is from, Cunningham said.
“There was like one singular coffee shop that was not Starbucks,” Cunningham said. “But here there’s maybe 15 of the same thing and all of them get the love just because of the demand.”
According to Caughman, the increase in the number of nearby coffee shops challenges the stores to improve their quality. Without the nearby university, the standards for the shops' products, ambiance and customer service might be lower, he said.
All Good Books is an independent bookstore in Five Points. One of its owners is Ben Adams, a USC graduate. The store receives bulk orders from USC and individual departments within the university, Adams said. These sales along with bulk orders from local stores make up 5 to 10% of All Good Books' total business, a critical amount, he said.
“That 5 or 10 percent does make the difference between us staying in business,” Adams said. “We're a small enough business that, if you took that out, we go out of business next year.”
Overall, the overlap between USC's community and that of the bookstore is beneficial, Adams said.
“The university and the bookstore are like kindred spirits," Adams said. "The same kind of people end up in both places, and we both have similar values, so we work well together.”
Real estate and housing market
USC’s flagship campus has impacts on both student and non-student housing and rental markets in Columbia, according to Butch Smith, an assistant clinical professor of finance at USC.
The student housing market in Columbia is booming due to a housing shortage for students. New student housing complexes are under construction in the city, including Gateway 737 and VERVE Columbia. Students also rent homes in and around Columbia.
Some student housing complexes affiliated with the university have increased rental costs in recent years. 650 Lincoln’s semesterly rental costs have increased from $5,050 in fall 2020 to between $6,369 to $6,719 in fall 2024, according to USC housing’s rates and fees page.
Non-student housing may also be impacted by the university. A 2019 study from the Journal of Big Data found that public universities have an impact on housing prices and rents, Smith said.
“[The study] also said that public universities, which USC is a public university, those tend to have a higher positive effect on average home prices and average rent,” Smith said.
The same study analyzed median home prices and rent price data from thousands of various zip codes to reach its conclusions. It also found a trend in the demand for small homes near universities.
Smaller homes near the university tend to have higher demand, due to students wanting to live in them, Smith said.
The process of students moving into neighborhoods is called studentification, an effect that can raise rental costs, Smith said.
“So, you know, students got to live somewhere, they want to live [as] close to university as they can usually, especially if walking distance, you get a premium for rents," Smith said.
Where students plan to live
USC retains 40.7% of its graduates in the Columbia area in the first five years after graduation, according to the study.
If this Columbia-area retention rate improves by as little as 1%, that would provide $18.8 million in new economic activity for the midlands region, according to the study.
The Daily Gamecock interviewed 34 students about where they plan to live after graduation.
A total of 62.9% of USC graduates end up living and working outside of the Midlands, according to the study.
Only two students reported that they plan to live in Columbia after graduation. A total of 13 students said they plan to live in South Carolina after graduation. They reported reasons including proximity to family and plans to go to law or medical school.
First-year art education student Katelyn Guingrich said she plans to remain in Columbia after graduating.
“It just depends on where the most opportunities are, but I'm liking exploring the city,” Guingrich said
First-year nursing student and New York native, Jack Wall, said that he plans to live in South Carolina post-graduation and work wherever he can get a job.
Six students said they plan to live in cities outside of South Carolina, such as New York and Charlotte.
First-year undecided student Mia Cinque said she hopes to go to New York or New Jersey.
“I don’t really like the South, to live in,” Cinque said. “I’m going into the marketing space, so I think there’s a lot of opportunities.”
First-year political science student Anna-Claire Tillman said she wants to return to her roots in Charleston after graduation.
First-year public health student Layla Foster said she is interested in going to medical school in South Carolina.
“I’m planning to attend med school, so it’s really kind of up in the air,” Foster said. “But I would like to stay either in Columbia or go back upstate.”
Continued economic growth may be at risk due to multiple issues. The increasing age of South Carolina’s residents and a labor shortage may stunt future growth, according to the study.
USC's programs may alleviate these issues through their appeal to talented people both in and out of South Carolina, Von Nessen said.
“Because of its many internationally recognized programs, USC is regularly attracting talent from within South Carolina as well as across the United States,” Von Nessen said. “And provides Columbia and the Midlands, especially with a significant high skilled labor pool for employers.”