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Concern Over Housing Costs

August 3, 2007

If ever there was a cocktail party story that resonates with an audience of faculty, it would be the one about living frugally as a graduate student. "How I survived on a small stipend" has its variations, including the sympathetic tale, "How I'm managing (or not) on a small stipend and large rent payment while supporting a family."

Several graduate students at the University of California at Berkeley tell their versions in a short documentary on the rising price of student family housing at the institution. There's the single mother struggling to pay her bills, the student who's relying on loans to afford rent and the family that moved to a nearby city because it could no longer justify the cost of staying in student family housing. The video is being used in a student campaign to persuade university officials to offer financial help to low-income tenants.

The cost-of-living dilemma confronts students in many parts of the country, but it is particularly acute in Berkeley, among the most expensive places to live.

"I don't think people realize what a problem this is," says Maile Urbancic, an officer with the Village Residents Association, the advocacy group that is asking for university assistance. "UC-Berkeley's ability to attract quality graduate students who have families is hurt greatly when they find out that they can get much cheaper housing elsewhere."

The group's campaign centers on the University Village, a group of buildings located a few miles from campus that includes about 800 units set aside for students with families, many of whom are graduate students and some of whom have children. Over the past several years, that housing has undergone a major transformation.

Students no longer have the option to live in military barracks that the university purchased decades ago (which rented for roughly $700 per month for a two-bedroom) or the "intermediary" apartments that went for slightly more. They now choose from among newer units, the cheapest of which (a two bedroom, one bath) costs $1,360 a month.

Urbancic, whose husband is an economics doctoral student, says many residents can't afford to pay nearly twice what they were paying before for the older apartments. Some worry that only wealthy, two-parent families -- or students who are preparing for lucrative careers and can afford taking out loans -- will be able to live in the housing.

Jenn Morazes, a graduate student who's working toward a master's degree in social work and a doctorate in social welfare, figured she'd be living on a tight budget when she started at Berkeley -- but she didn't plan on going more in debt.

Morazes and her non-student boyfriend paid roughly $800 a month in their past student family unit and now pay $1,360 for a newer residence. After coming to Berkeley with $25,000 in previous student loans, she has taken out more since the move to cover the rent.

"My indebtedness is increasing in conjunction with living expenses," Morazes says. "Before we moved, I wasn't borrowing as much. It's hard for me as a first-generation college student."

According to the student advocacy group's research, the cheapest rent in the village has increased from $410 to its current level over the last 10 years. In that span, the average monthly salary for graduate student instructors increased by 22 percent, from $1,400 to $1,700 per month, the group says. That means the cost of the least expensive unit now is about 80 percent of an average student's salary, down from about 30 percent in 1997.

Peter Hoenig, interim associate vice chancellor for student affairs at Berkeley, says the cost of housing in the region is a concern to administrators. The university says it has worked with low-income residents to make the new housing options as affordable as possible.

Keeping the old housing stock wasn't an option, according to Hoenig. "Some [of the units] were decaying and had become unlivable. We didn't think that was a good environment to have families living in. It's unfortunate, but when you build new housing these days it costs a lot of money."

The old housing had no debt service, Hoenig says, so the university was able to offer units at rates that were well below what most rentals cost near campus. That wasn't the case for the new crop of apartments.

The students and the university disagree slightly on whether the new student family housing is at, above or below the market rate. The residents' group says the apartments are either at or slightly above the rate for housing in Berkeley and its neighboring town, and that the university has an obligation to keep lower-priced options available given the labor it gets from graduate students. (Its statistics also show that Berkeley’s minimum rent for a two-bedroom student family unit is now more than the comparable minimum at Harvard, Princeton and the University of California's campus in Los Angeles -- all located in similarly high-cost areas.)

But Hoenig said the student group is comparing the student housing to regional non-student housing that is rent controlled, for instance, which skews their tabulation. The university used to strive to be below market rate for its family housing, but with the fall in housing prices, it is now aiming to be -- and is, according to Hoenig -- right around market rate.

Much now depends on who benefits from the sale or lease of several parcels of land on campus. UC's Board of Regents, which owns the property, is looking at third-party developers, and planning to generate revenue for student services.

The question is which ones. According to Hoenig, money acquired through a later phase of the land sale or lease will go toward building community centers in the student family housing. The money won't be used to subsidize rents, he says.

The student group wants money from the sale or lease of adjoining housing to reduce the cost of housing and facilities that residents already use. Members of the group are asking for debt forgiveness and the establishment of a housing grant that would provide money to the most needy families. And the group doesn't want to wait for years to see help. (The first phase of land negotiation is under way.)

Urbancic and other group board members met earlier this month with Robert J. Birgeneau, Berkeley's chancellor, who is considering how to respond.

“He is concerned about their position and exasperated by the high cost of housing in the Bay Area," Hoenig said. "We understand what student salaries are when they get on campus. Being a state university, funds have been cut back.

"Obviously family housing is a priority," he adds. "At the same time, it comes down to a determination of priorities. Anytime there’s the possibility for money to be used for student services, everyone in the world wants that revenue. But what we're talking about here is 800 students, and we have 35,000 in total. It's a difficult analysis we're going through."

Urbancic is optimistic that the chancellor can come up with aid money soon to help the lowest-income families in the housing.

Part of the village group's argument rests on recommendations made over the past decade by committees that included university officials. They said that proceeds coming from the sale of property on or near village land should be used to reduce housing costs for families. Hoenig says money from past transactions have gone toward construction costs of village buildings, but that money won't help bring the rents down to what they once were.

Hoenig and Urbancic both say the situation is particularly difficult for international students who make up a large portion of village residents. Many can't get financial aid or work without a visa, and some end up living with other families illegally, Urbancic says.

Miguel Daal, a sixth-year graduate student in physics who is campus affairs vice president to the graduate student assembly (and who does not live in the housing), says he is concerned that housing prices are rising while fellowship amounts aren't keeping pace.

He says he'd like to see the campus either compensate students on the financial aid end or subsidize the rental housing cost. "If done the right way, I think [students] would all be supportive of having the campus subsidize grad student housing, including family housing," he says.

 

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