The University of Akron, which has $80 million in debt on its nine residence halls, is considering selling control of its student housing to a private company that would pay for upgrades to its dorms — and perhaps build new ones.
The university is looking for a public-private partnership to maintain and operate its residence halls. It has requested information from three companies and opened its proposal (below) to others. The business partners would also finance and build new dorms, if necessary.
The request is open-ended, and, with any agreement, the university is looking for ways to improve the student experience, said John Messina, the university’s vice president for student affairs. But the proposal states that the university wants to harness creative thinking from the private sector with regard to housing and transfer financial risk from the university.
“We are exploring, we are casting a wide net to see what’s presented to us,” he said. “It is increasingly challenging for us to maintain the facilities at the level we would like to maintain them. Upkeep has become challenging.”
Serena Sampson, a first-year nursing student at UA, loves her floor in the Honors Complex but has noticed some of the challenges. Lightbulbs have flickered for days in hallways and study rooms, she said, and an elevator keeps breaking. It has made her worry about being late to class if the remaining working elevator gets over-full and requires her to wait to get downstairs, as happened on a campus visit day.
“They’d probably get on it a little faster,” she said of an outside operator. “An outside company might be better.”
Making the university more competitive
Other Ohio colleges have partnered with outside companies to manage student housing, Messina said, and UA is hoping to use a partnership to make dorm upgrades that the university otherwise couldn’t afford. UA has about 2,500 beds across its residence halls; Quaker Square, which the university owns and which closed as a residence hall in 2020, will not be part of the agreement.
The proposal states the upgrades are expected to cost $33 million over 20 years and includes necessary improvements due to the Americans with DIsabilities Act. Five of the university’s dorms were built in the 1960s; the remainder have been built since 2004.
In any deal, the university would continue to manage programming such as welcome weekend events and casino night. But marketing and leasing rooms, capital planning, administration, maintenance and custodial services would all be the responsibility of the new partner, according to the proposal.
Part of the reason universities outsource services like housing and parking — which UA has already privatized — is to simplify their books, said Edward St. John, an emeritus professor at the University of Michigan’s Center for the Study of Higher Education. St. John said doing so can give universities more flexibility.
He also said as students demand more and more amenities when it comes to housing, an outside partner can help fund them, making a university more competitive. Indeed, the proposal said the university would like to use its dorms as a recruitment asset.
“If dorms are outdated, it’s not going to be as competitive as universities that have a modern dorm system,” St. John said. “The people it’s going to affect are those who want to leave home and have a college experience.”
Messina said that, on a national level, universities have advanced housing options with greater upgrades than UA can muster. He said he hopes that a partnership will allow improvements beyond what the university can afford.
“Companies have an advantage we may not have in immediate capital,” he said. “They can paint it all at once.”
Benefits of living on campus
The standard dorms that Signal Akron toured include tiled floors, lofted twin extra-long beds, desks and wardrobes with mirrors. Some have private bathrooms, while others are shared. There are social rooms and study rooms in each hall.
“In the immediate short term, a refresh of the buildings is something we want to do,” Messina said. “We’d like to give it a little zhuzh.”
The university requires first- and some second-year students to live on campus if they don’t live in Summit, Stark, Medina, Wayne or Portage counties. According to an analysis of university housing, about 60% of the freshman class lives on campus, and nearly a quarter of all undergraduates chose to live on campus in the fall. That’s an increase from fall 2017 to fall 2021, when the figure was 17%.
Total undergraduate enrollment this fall was 9,696 students, according to the university’s request for a housing proposal; it has steadily declined since the fall of 2012, when more than 22,000 students were enrolled at the university.
As of the fall semester, the university was at 92% capacity for its housing, Messina said. An analysis shows an increase in students who are choosing to live on campus.
Sampson, the nursing student, said living in the dorms has been “a great experience” overall. She said even with some maintenance delays, she has enjoyed her time on campus.
But an outside company could perhaps bring new ideas to the living experience, she said. They could make it “more ideal living in here.”
The university’s research shows students who live on campus are more likely to return to school the following year, a benefit to the university. And Shane Young, the University of Akron’s senior associate director of housing and conference services, said students who live on campus are more likely to succeed at school and be engaged.
“Once they’re driving home, they’re not coming back for a campus program,” he said.
What happens to prices?
Messina said he hopes students don’t realize there’s been a transition at all. While costs will change, he said that would happen regardless of who controlled student housing. Currently, on-campus housing costs between $624 and $876 a month. Off-campus housing ranges from $295 a month for a single bedroom in a house to more than $1,200 a month for a one-bedroom apartment, according to an analysis by Walker Consultants.
“Could a new provider come in and quadruple the cost of housing? No,” Messina said. “They provide recommendations to the university, but the Board of Trustees approves the rates.”
The board will also have to approve any housing agreement.
In the fall of 2021, UA reduced its housing costs by 30%. The university has said it plans to raise them 4.5% beginning in the fall, and Walker Consultants anticipated rates would rise at that level for the next four years. (Many Ohio residents who attend the university are guaranteed fixed tuition, room and board rates, and some other fees for four years.)
UA’s housing rates are low compared to its peer universities and off-campus housing, the analysis said.
“In an ideal world, everyone would come away with a financial benefit,” Messina said.
In recent years, the proposal said, lower occupancy due to decreased enrollment has led to less income from the dorms. It was about $5.3 million in the 2022-2023 school year, after ranging from $9.2 million to $11 million between 2015 and 2019. If occupancy rises, as Walker expects, more money would come in.
Sampson, the nursing student, said she’d like to try living on campus again next year — but she’d like to see costs drop.
“I hope it decreases,” she said. “Definitely, I do not want it to raise anymore.”
Ryan Hannan, a first-year aerospace engineering student from Wooster who lives in Honors College, said he’s concerned about future costs as well.
“I would worry about price increases,” he said. “I think if they privatize it, it would get more expensive.”
An increasingly common housing model
Any decision will be a “somewhat lengthy” process as the university does its due diligence and trustees make a decision about the future of housing, Messina said. He said a committee will evaluate the content of companies’ responses and bring them to campus to look at the housing stock. Students will be involved in the evaluation. Nothing will be decided this academic year; the proposal said any change should take place in the fall of 2025.
“Transitions like these are not a light switch,” he said.
Messina said UA is one of the later colleges to explore privatizing its dorms. Matthew Lambert, who wrote a book on it in 2014, agreed.
“It’s much more common today,” he said. “Fifteen years ago, there were a lot more people who were skeptical this was possible.”
Lambert is the senior vice president for university advancement at the College of William & Mary and author of “Privatization and the Public Good: Public Universities in the Balance.” He said his college is currently building new residence halls using the model; the university is not bearing any of the costs of construction.
Under the old model, he said, the university’s room and board fees would go toward paying down building debt. If a private company takes over the university’s debt, those room and board fees would go to the business instead of the university. Lambert said costs aren’t likely to change dramatically, and many companies keep the residence life staff that’s already in place — though St. John said one way businesses find savings is to pay them less.
Messina said the university operates leanly, and more staff may even be added.
Housing and parking are not a university’s core businesses, Lambert said — education is. So the university experience is unlikely to change much based on who is running the operation. Housing is a little more emotional, he acknowledged, because it’s where students live.
“Typically, students wouldn’t know whether it’s public or private,” St. John said. “With upgrading and modernization, students will have a better experience.”
Emily Proverbs, a first-year mechanical engineering student from the Youngstown area who lives in Honors College, said she had some back-up issues in her dorm’s sinks and showers, but she has still enjoyed living on campus.
“I definitely like living in the Honors community,” she said. “Making friends was easy.”