I live in a nice apartment. The bathroom is large, kitchen is brand new, ceilings are high, and my roommate and I have held many parties. When something goes wrong, the maintenance promptly fixes things – often the same day. It’s been a refreshing experience, but it’s come with a price and harbinger for higher education in general.
When I first entered graduate school, rent was about $400 with Internet and cable (not including utilities). I lived in Soviet-themed (unintentionally) barracks the university built in a flood zone. The entire area had flooded repeatedly (including many of the buildings). They weren’t necessarily up to “code,” but they were utilitarian and met my needs.
After two years of living, they decided it was time to tear them down and build up new buildings. I couldn’t blame the university. Unfortunately, there was a catch: private construction and land management companies would now control the buildings. Flirting with private and public lands (as I go to a public university), the university sold the building rights to the company. Now, my apartments are owned by a private company and the public land is leased to them.
While the apartments were brand-spanking new, it came with a flashy price: $550 per month with a roommate. I found a great one, and we’ve been living here ever since. From around $400 to $550 was a tremendous leap. But I justified it because it would keep me “on campus,” on the free bus route, and rentals are regularly expensive in the city. The old price didn’t really exist in the city, as it was university subsidized. Additionally, it would limit my moving expenses, as I would carry my stuff across the block.
Then something strange happened last year. Half way into my lease, a brochure was placed in my door frame. It said, “Take advantage of a great opportunity to renew your lease…at a discounted rate!” That first sentence sent off alarm bells in my head; I thought, “here comes a sales pitch.”
If my roommate and I renewed early, we’d receive this so-called discounted rate, but it was made worse by a bold-faced exclamation, “The first 100 residents that renew will get a discounted renewal rate!”
Both of us eyed the brochure and looked at the rate. At first I thought we’d actually be saving money because the table outlined “annual savings.” More closely, we realized they would be charging us $10 more. Despite all the rhetoric about savings, we’d be paying $120 more a year, each. Then, the company had combined it with a time-sensitive offer. They had clearly read some awful business books that encourage these tactics at the expense of consumer hatred.
The kicker was a third element: information about how expensive and difficult it is to move. As a skeptical reader I wondered why they were including information about “truck rental,” “utility transfers and deposits,” and “application fees.” Simply put, they wanted to psychologically implant loss potentials by using classic business techniques. The company wanted to reduce the likelihood of a move.
Despite my hate for the technique, it was true. Because we were graduate students, on tight schedules, and fearful of awful landlords (the city is full of them), we accepted the $240 total increase.
A year passed without much concern. Yesterday, I came home to an updated brochure. It was entirely the same except for the amount owed and leasing year. All the same rhetoric was used: “annual savings,” “the first 100 residents,” and information about moving expenses.
Another increase stared back at me: $480 per year per person. I was stunned. Over two years, the private land management company hiked the price $600 for leases annually. And horrifically, it’s even worse for new leases. Now, my roommate and I have a major decision to make.
This story is about more than one rental company’s tactics. Rather, this article is about the wicked decline of public institutions. What used to be highly subsidized, affordable housing for graduate students, quickly declined to a gentrified area (all the families and international students left). The university no longer needs to manage the land and they receive leasing payments, but they have little control of the land management’s prices and sales tactics.
By understanding these tactics and the privatization of public university property among rising student loan debt is a recipe for resentment. Raising prices $600 per year for each person becomes a formidable sum. Think about how $600 each year over the course of a five-year graduate school career equates to $3000 in extra housing costs, which are often at 6.8% interest with federal aid. That adds up, as do the future payments.
While people could move out, year round schedules and limited savings become a trap for many students. With strict budgets that limit freedom to afford truck rentals, rent cleaning products, and pay for utility transfers, we are a vulnerable population. Many are restricted by these methods.
The privatization of public property might be an omen for continued demises in higher education. By pushing towards a business model, students will bear the brunt of these horrid policies.
We’re at a tremendous precipice in academia. As we play limbo with students lives, I cannot help but wonder when we’ll find the bottom because we’re walking straight towards it.
Mary Lohmeyer says
The private landlords know they have a ‘captive audience’ (students) so to speak and therefore, can pull whatever stunts they wish.
Post summary: it sucks to pay a market rate
Mike-With the notable exception that Balfour Beatty isn’t paying the market rate on land at a $1 a year lease from the University. They are being subsidized by the University to provide subsidized housing for the student.
Market rate is where supply meets demand. It sounds like they aren’t having any problem with demand so don’t be surprised to get another hike next year
But the rental prices are not a market rate. This is not a free market situation. Free market always implies some kind of relative abundance of raw materials that are available to anyone who wants to produce. That is absolutely not the case with housing. Entry is very restricted to those with lots of capital and in some cases political influence. The end result is a cartel with standard prices for certain thresholds of quality. Typically an area’s low price no matter how unlivable the place is pretty much the same across a broad range of quality until the next tier is reached where residences are actually well maintained and most everything works. Not only that, in a free market people supposedly can choose not to participate at all. That’s hardly the case with necessities like shelter when people have commitments like school and work.