The Rise Of Luxury Dorms – What Do They Mean For Campus Life?

September 19th, 2019

BY ANNABEL MONAGHAN

 What did your college dorm look like? If you’re like most grads, you likely lived in a bare bones room – not particularly attractive or comfortable, but it did the job. More recent grads, however, describe a different experience. As a result of what’s been called the “amenities arms race,” colleges are undertaking extensive new construction projects at exorbitant costs. While schools spent $6.1 billion on construction projects in 1995 – largely due to the growing number of students attending college – by 2006 that number peaked at $15 billion, with spending targeting upgrades, rather than expansion.

In the midst of all this construction, one of the most noticeable changes to hit college campuses is the quality of housing available. Though certainly not the norm for all students, luxury dorms offer an opportunity for wealthier students to upgrade their living experience without leaving the oversight, and the financial umbrella, of the school. But what does this shift mean for campus life? Luxury housing may not be the source of inequality on campus, but its presence may amplify it.

The University Luxury Boom

Luxury dorms and university housing take a number of forms, depending on the location of the campus and just how elite the housing is designed to be. At Wichita State, for example, luxury housing means a nicer, tech equipped dorm at the center of campus – and a price tag double that of the underused standard housing. Despite vacant units elsewhere on campus, Wichita sunk $65 million into this new project because it will help them attract more students and because parents are willing to pay for such high-end housing.

While wealthier students are shelling out for nicer housing, as well as hidden perks like concierge service for the true 1%, students reliant on financial aid, especially first generation and minority college students, live wherever they can. This is especially concerning considering the hidden phenomenon of homelessness and food insecurity on college campuses. Rather than using construction funds to address equity issues that significantly compromise some students’ ability to access an education, universities continue to indulge wealthy students whose paths have already been cleared of barriers.

Profiting From Privilege

Obviously wealthy students can afford to pay more for nicer housing, but is constructing such luxury dorms, most of which ultimately serve upper-middle class students, not one-percenters, actually profitable for colleges? The answer is complicated, requiring a look not just at college finances, but at how construction and development financing works.

When colleges build luxury dorms, especially in major cities where these dorms tend to resemble high-end apartment buildings, they know that they’ll be charging students a flat rate while they handle all of the additional expenses, including utilities. They may charge students for some added services, such as maintenance – colleges tuck all kinds of fees into their payment schedule – but overall, it’s on the school to handle all the bills, and this gives them access to a modified gross lease.

As described in this complete guide to the modified gross lease, this financial model can make dorms more profitable for colleges because they know that they’ll have very few, if any, vacancies in the property. It’s easy to set a fixed fee, then, and know that it will not only cover operating costs, but also pay for construction and generate profit. This works especially well in cities where, if students aren’t offered these housing options, they’ll simply opt to live off campus. With luxury housing, colleges keep that money on campus.

What Students Really Need

Indulgent dorms may be a profitable investment, but they come at a cost to the rest of the student body. Not only are their students facing housing insecurity on campus, but students in older dorms could benefit immensely from simple upgrades. Improving the HVAC system, installing better WIFI and other digital capabilities, and even just improving the student bathrooms would all make standard dorms more comfortable and appealing, and should become the glue that holds school communities together. Unfortunately, it’s hard to boast about modernizing dorms to meet basic student needs to way a school could about luxury housing.

Finally, the United States’ obsession with luxury and catering to wealth is reaching abroad and influencing British universities. Shifting away from inexpensive and often dilapidated dorms and apartments, universities across the UK are investing in pricy and elaborate housing options like those at Coventry University, which are modeled on hotel rooms. But what these schools are discovering is that these new residential options not only amplify distinctions among students, but they also drive town and gown tensions. Schools have often struggled to connect with their surrounding communities, but by building over the top luxury housing that would be unaffordable to local residents. Simply put, this new housing creates multiple levels of friction.

Luxury housing may be a financial boon for universities, but ultimately this shouldn’t be a primary concern for schools. At a time when students and adjuncts alike are facing economic stress, schools could be investing their funds in providing stability and a shared standard of living. Instead, the institutions that are meant to lift students up are further dividing them by economic status.

Annabel Monaghan is a writer with a passion for education and edtech. She writes education and career articles for The College Puzzle with the aim of providing useful information for students and young professionals. If you have any questions, please feel free to email her at annabelmonaghanwriter@gmail.com

 

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