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Tuesday, May 24, 2022

Student accommodation is tight. A California plan wants $5 billion for affordable beds

The University of California officially laid off more students than was in place last fall. Yet UC leaders, lawmakers, and governors all want to dramatically expand student enrollment.

But that ambition is at odds with the housing crisis crippling UC and campuses across California.

Students will need somewhere to live and a new legislative plan will throw in $5 billion to help state campuses increase their housing stock.

Assembly Bill 1602, by Assembly Member Kevin McCarty, a Democrat from Sacramento, would lend money, interest-free, to public colleges and universities to expand the supply of affordable housing.

That much money could house about 21,000 more students, based on recent analyzes that show campuses spend an average of about $240,000 per student bed when building housing. But even this may not meet the total need, given how many students are struggling with housing insecurity and homelessness.

The plan builds on a $2 billion grant for affordable student housing lawmakers approved last year, and signals the state’s growing commitment to tackling all the costs students face in earning a degree. McCarty sees the loan program as a way to capitalize on a more expected massive state budget surplus. Furthermore, unlike financial aid programs that require annual funding, the state can help build housing once and allow a generation of students to receive benefits, the thinking goes.

An analyst in the Legislative Analyst’s Office told lawmakers in November that campuses struggle to finance their housing projects so that they can cover operating and loan repayment expenses, despite being affordable for students. Removing interest from the equation would allow campuses to save more on students, McCarty told CalMatters.

But the proposal faces a long road through the Legislature and does not currently define what affordable units are, other than whether they should cost less than local market rates.

Program Details

Under McCarty’s plan, the University of California, California State University, and to a lesser extent, California Community College, would rapidly tap into these funds, build more student homes, and then use student rentals over a period of more than 30 years. They would not have the income to pay off what they had borrowed – a revolving zero-interest loan. The state can then lend another round of funding for student housing as the program replenishes the treasury.

The loan will be managed by the State Treasurer. The campuses will be able to use the funds for building new structures, demolishing old ones and renovating existing hostels. McCarty wants the bill to be passed in the next few months and go into effect immediately. The money will reach campuses mid-2023 at the earliest.

“We have a college affordability crisis and we have a housing supply crisis,” McCarty said. “These two things are really intense in California right now.”

He had proposed a similar revolving loan last year too, but those plans went awry.

Think of student housing funding as the third step in a college-affordable barstool that also includes:

  • California pledges to cover tuition costs of low-income students at UC, CSU, and community colleges;
  • And another big program on its way to give UC and CSU extra dollars for out-of-pocket expenses like housing, food, and transportation.

The promise of cheap housing will add more travel to those new out-of-pocket student dollars.

What is an affordable unit and who will get it?

While the proposed loan program is largely built on in the initial three years, lawmakers approved last year’s $2 billion student housing grant program, there are significant differences.

As written, the bill does not define what affordable rents mean – just that they must be below the local market level for student housing. However, last year’s grant program is more specific: It limits rents to low levels of county median income. For example, in Los Angeles, campus housing built with grant money cannot rent more than $700 per month per bed in today’s dollars. UCLA and UC Berkeley report that although standard university units are generally cheaper than off-campus housing, they can go for more than $1,600 per month.

Nor does the proposed loan program specify what percentage of the money will go to higher education systems. The grant program reserved half of all funding for community colleges, 30% for Cal States, and 20% for UC. This caught some UC insiders off guard, noting that some community colleges have a history of building student housing.

McCarty said most of the loan funding is likely to go to Cal states and UC, but those details could change. Another difference between the two housing programs: McCarty’s loan bill would currently allow the funds to be used for faculty and staff housing.

Certainly the state needs more student housing. Gavin Newsom wants to add 7,000 more UC students from California by 2027, topping the nearly 11,000 additional slots approved last year. UC aims to expand enrollment by 20,000 students by 2030 – including 4,000 undergraduate students – although not necessarily all added slots will be for individual learning.

Expanding enrollment and not housing supply is “going to be a big problem,” McCarthy said.

It would also violate the delicate balancing act some UC campuses have worked out with their local governments. UC Davis and UC Santa Cruz are legally obligated to provide housing accommodations for every new student they enroll. Meanwhile, a judge blocked UC Berkeley’s expansion, citing state environmental law.

Complexes are being built… but not enough

The system has progressed: UC campuses have added 22,000 beds over the past four years and there are plans to add 20,000 more beds over the next four years, a UC official told UC Regent last week. Cal States has added 14,000 beds in recent years.

Despite this, the students are facing a serious problem of housing. UC reported that its housing occupancy stood at 102% of available space in 2021. There was a higher demand for on-campus housing than beds available at many campuses last fall, and hundreds of students stayed in hotels. According to a 2019 survey, a third of California college students struggle with unstable housing. Possibly tens of thousands of students experience homelessness.

Sometimes the higher education system can’t get out of its way: CalMatters uncovered an example in late 2021 in which a bureaucratic shambles could end up costing the Cal State system 3,000 beds.

UC, Cal States and community colleges have already proposed more than $3 billion in state-backed housing projects—far more than the $2 billion housing grant lawmakers approved last year.

The bill’s first legislative hurdle will be securing votes in the Assembly’s higher education committee, which is likely to take place in March.

World Nation News Deskhttps://www.worldnationnews.com
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