The Dangerous Economist: Swimming Pools and Granite Countertops: How College Dorms Got So Expensive

Saturday, January 13, 2024

Swimming Pools and Granite Countertops: How College Dorms Got So Expensive

Housing is one of the biggest drivers of rising college costs in the U.S.—for new luxury suites as well as old windowless rooms

By Melissa Korn & Shane Shifflett of The WSJ. Excerpts:

"ASU [Arizona State University] students pay about 80% more than what Sun Devils paid to live in the building about 20 years ago, adjusted for inflation.
Housing is one of the biggest drivers of rising college prices in the U.S., fueling the $1.6 trillion federal student loan crisis, a Wall Street Journal investigation found."
"The Journal examined the price of residence halls going back roughly two decades at 12 public universities around the country. The least expensive bed increased by a median of 70% in today’s dollars."
"At Binghamton University in New York, the price for the cheapest option more than doubled over that span, and now tops $10,000 for two semesters in a shared room."
"the housing options changed dramatically in that time, with 12 new residence halls and significant upgrades to others, more private bedrooms, and hundreds more staff to help with student mental health."
"While rental prices rose nationwide in this period, an analysis of Census data shows median rates increased at a slower pace in the areas immediately around all 12 schools than the pace for the least expensive options on those campuses."
"The median increase for the most expensive housing offering at the 12 schools was 114%, adjusted for inflation."
"Clemson University, in South Carolina, charges 35% more than 2001-2002, inflation adjusted, to stay for two semesters in a windowless room in a dorm from the late 1960s."
"Housing prices zoomed past tuition at several schools."
"Administrators say that students—particularly wealthy ones who can pay full price for college—demand better amenities than dorms offered to previous generations. The schools also say they must compete with opulent off-campus options."
"The median top-tier public research university reported a 45% increase in housing costs between 2001-2002 and 2022-23, adjusting for inflation"
"UMass spokesman Ed Blaguszewski cited increased labor costs as one reason housing has become more expensive. He also said the university’s aging residence halls—mostly built between 1951 and 1975—require tens of millions of dollars each year in replacements and upgrades."
"Universities increasingly partner with private developers to construct and manage the residence halls on school land, saying it’s an appealing way to get more beds on campus, quickly, without tying up their own balance sheets or issuing bonds."
"construction costs in Southwest Virginia skyrocketed, as have labor costs."
"prices increased due to upgrades like better insulation, new roofs and for some dorms, to install air conditioning, which in the hottest months he called “an access issue to be able to learn, because you can’t sleep, because it’s too hot"