This paper empirically investigates the costs that arise from uncertainty in the college-town housing market in the Urbana-Champaign metropolitan area, the home of the University of Illinois. This research resulted in two principal findings. First, the rental price of housing owned by property owners having more than 10 claims filed against them (i.e., complaint records on violations of property owners' obligations under the law or according to the terms of the lease contract) in the past five years was about 10% lower than the rent for other housing. Second, because of the uncertainty involved in renting from a potentially risky property owner in an unfamiliar location, a large number of graduate students choose to live in housing provided by the university (hereafter termed university housing), which costs at least 45% more than they would pay a private property owner. These two results shed light on the prominence of uncertainty in college-town environments and show that university housing plays an essential role in the housing market by alleviating such uncertainty. Although there have been movements to privatize university housing at some institutions, without the engagement of the university, the college-town housing market would face the serious risk of being exposed to the uncertainty owing to the asymmetry of information between renters and private housing providers. Conversely, further expansion of the housing business by the university could yield greater efficiency in the college-town housing market.