His comments come as bond data from Tenancy Services showed median rents for tenancies which start in January — when most students sign their leases — climbed from $640 per week in 2023 to $680 last year.
Mr White said the rising prices meant students in Dunedin were forced to live in "material poverty".
"It has become really accepted in student culture that you have to live in a bad flat and you don’t have a choice in it."
Rising rents meant students relying on support from Studylink alone were often spending more than 60% of their income on rent.
Because students were expected to spend 50 hours a week studying, they barely had time to work to make extra income.
He had heard some "absolute horror stories", including one
student who was anxious he would have to live in his car for the year because he could not afford accommodation on top of his tuition.
There was a lot of hidden homelessness in the student community, he said.
"I’ve got a mate who’s staying with his girlfriend because he is between jobs. He could go on the benefit, but that really doesn’t seem like an option for someone who spent four or five years studying."
On top of paying a premium, students were often living in rundown flats.
"Castle St can be third world."
Students had accepted the poor conditions because they were at least paying low rent, but now "it’s just not sustainable".
If a student chose to move to Christchurch they could get a better-quality flat at a cheaper price.
"I would say that’s a real threat to the university."
Dunedin landlord Eugene Hones, who has a property in Dundas St, said student behaviour was putting potential students off the city, pointing to the level of smashed glass and "stereo systems that could be heard in Timaru".
He had put his five-bedroom property up for rent at $780 a week, which was below the $800 a week he was told he could get for it by his real estate agent.
He believed his rental had not been snapped up because he advertised it too late, student numbers were down and the university was providing more first-year accommodation.
As a retiree, his rental property helped top up his pension and he needed to maintain a market rate given he was also facing a tough economic climate.
Otago Property Investors Association president Kathryn Seque-Roche said there was high wear and tear on rentals in the student area and they required more attention than the typical family home.
She said for the past few years tenants had been "talking with their feet" and not renting flats if they were too expensive or in a bad condition.
Ms Seque-Roche said the properties in the student area were not always more expensive than the rest of Dunedin and it depended on the area and condition of the property.
There were many factors driving students away including the university being under financial stress and the polytech dropping courses.
University of Otago vice-chancellor Grant Robertson said it was highly likely the cost-of-living crisis had an impact on students deciding whether to undertake tertiary studies.
However, he said rental costs were not an Otago-specific issue.
"Of the other university cities, rentals in Auckland and Wellington remain more expensive than Dunedin.
"There are also other costs, such as transport to factor in those cities that are not an issue in Dunedin."
The university urged the government to ensure student support, including allowances, was realistic.
"Addressing the broader affordability issue will require continued collaboration with the government and other stakeholders."
