Growth of Student Housing Pays Dividends For UBC

At their meeting this week, the UBC Board of Governors will be publicly discussing the university’s plan to increase winter session residence rents by 20%. In a demonstration of its commitment to transparency and accountability, the Board actually already met to talk about the rent increases last week, but did so behind closed doors. The real discussion and decision-making having taken place already, the Board has invited students (the AMS and RHA) to the meeting next week for some “accountability theatre”. In the lead-up to the board meeting, we’ll be publishing some old and new content about the student housing model used by UBC.

Part 1: What does it mean for UBC Student Housing to be “cost recovery”?

Part 2: How student rents end up paying for new construction projects.

In 2012, the AMS produced a report about Student Housing and Sustainability. Co-authoured by Sean Cregten and Brittany Jang, it outlines how student housing at UBC is built and managed. The whole report is absolutely worth reading for anyone wondering about how UBC sets its rents. Below is an excerpt focusing on how UBC Student Housing and Hospitality Services (SHHS) is required to pay an annual dividend to the university administration.

Financial Contributions

To increase student housing affordability, the University faces one core issue: reducing the costs that student housing is required to pay as an ancillary. If this can be achieved, rents can be lowered to more affordable rates for those most in need. In 2010/2011, SHHS was forecast to pay a $4,200,000 contribution to UBC central administration from their student housing department, and in 2011/2012 was planned to pay a $4,400,000 contribution. These payments do not go towards funding operational expenses or debt obligations of SHHS, which are captured within SHHS’ operating budget and are fully paid before this transfer. As the sole source of revenue for the student housing department is rent, student renters are paying a significant amount of money to UBC central administration that is above and beyond the costs associated with student housing.

With 6,479 undergraduate and graduate students living at UBC-Vancouver in 2010/2011, the 2010/2011 contribution was approximately $648 per student living on campus. If SHHS had been relieved from this contribution requirement, it would have been possible to reduce UBC Vancouver housing rents by over $600 per year and still pay, in full, all of the costs of providing student housing. In effect, this contribution is a direct charge that is passed on to renters and is unrelated to the provision of the housing that they use.

While this sizeable contribution requirement remains in place, there is additional financial pressure placed on SHHS that is unrelated to the maintenance or provision of actual housing units. Were this contribution requirement removed, some financial pressure would be lifted from SHHS. This could allow lower rent for all students, or targeted rent-reduction for students most in need.

The AMS recommends that the Board of Governors cease to require a financial contribution from Student Housing and Hospitality Services.

-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

[Ed. Here are the reported or projected contributions from SHHS to UBC Central in the years 2010-2020. Note the jump from 2014-15 to 2015-16, when next year's rent increases will take effect.]

2010-11, $4.2M
2011-12, $4.4M
2012-13, $4.5M
2013-14, $3.0M
2014-15, $2.4M
2015-16, $7.8M
2016-17, $6.4M
2017-18, $6.5M
2018-19, $6.6M
2019-20, $6.8M