The University of Akron is moving forward with plans to privatize its student housing, a strategy leaders believe will satisfy President R.J. Nemer’s push to pay down the institution’s hefty debt.
The 40-year deal, which is expected to be finalized in December, will partner the university with Radnor Property Group and Capstone On-Campus Management. The private companies will take over maintenance of nine residential buildings.
The university has between 2,400 and 2,500 beds across its residence halls.
Currently, University of Akron has the lowest on-campus housing cost of nine public Ohio universities compared in a Board of Trustees’ document. The document did not include the University of Cincinnati, Shawnee State University, Central State University, the University of Toledo, Youngstown State or Northeast Ohio Medical University.
The estimated savings in maintenance on its residence halls over the next 40 years, according to university officials: $33 million. The university will also transfer $83.5 million in residential housing debt to a yet-to-be identified non-profit organization, said university spokesperson Cristine Boyd.
The university is expected to take in roughly $14 million over the first 10 years of the contract, in addition to a cash infusion of an unspecified amount for capital improvement projects.
Neither Chief Financial Officer Misty Villers nor Melinda Grove, the vice president of Student Affairs and Chief Housing Officer, could say how much cash the university will get for the projects due to possible variances ahead of the deal’s closing.
University administrators said they did not seek student input.
“I would tell future students to be excited about this, because we are going to have the opportunity to have some capital to be able to renovate some of our older facilities and catch up a little bit on some of our deferred maintenance issues,” Grove said on Wednesday.
The privatization of on-campus student housing was first floated a year ago.
How will this help the university’s finances?
In addition to the roughly $14 million over the first 10 years, and the additional monies for capital improvements, the companies will handle staffing for residential maintenance, custodial services, renovations and repair. The transfer of labor is expected to reduce payroll costs, though administrators did not specify by how much.
“The university would be factoring in the long-term savings of them taking over the staff,” Villers said. “We are again working with the provider on how to best transition that maintenance staff.”
How much will student housing cost under the new deal?
Under this privatization deal, Villers and Grove expect the University of Akron to have the second-lowest student housing cost compared to eight other Ohio public universities — behind Wright State University — although the exact amount is unknown.
During the 2024-2025 academic year, student housing cost between $2,635 and $3,700 per semester.
The university recently discussed raising on-campus housing costs after cutting them 30% during the COVID-19 pandemic. The university is close to taking increased housing costs to the Board of Trustees for approval but is waiting for the Ohio Legislature to approve the governor’s budget.
“We will still have to follow any guidelines under the tuition guarantee program,” Villers said.
The tuition guarantee program provides “certainty that tuition, select fees and room and board rates will not increase for degree-seeking undergraduate students for four years,” according to the university’s website.
Grove said that, ideally, students won’t notice a day-to-day change in their on-campus housing experiences. Villers added that with maintenance and renovations outsourced to Capstone, the university’s Residence Life and Housing department will be able to focus on improving resident life.
“The capital infusion to be able to assist with our facilities is going to allow for a better on-campus student experience moving forward for our students,” Grove said.
“A couple of your core driving principles for the project was to be able to improve our current facilities [and] to be able to maintain the student affordability,” Villers said.
Capstone, which is the entity students are most likely to interact with, is operating on Bowling Green State University’s campus. Grove said the university shared glowing reviews of Capstone’s work.
Editor’s note: This article was updated to clarify the roles of Misty Villers, the university’s chief financial officer, and Melinda Grove, the vice president of Student Affairs and chief housing officer. It was also updated to clarify that the deal with include an additional, but unspecified, amount of money for capital improvement projects.