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Housing Prices Increase by 6 Percent for ’05–’06

CORRECTION TO THIS ARTICLE: The Sept. 13 version of this article incorrectly attributed rent increases for ’05-’06 to a transition to cover all housing costs through rent income. Housing prices on campus rose this year in large part because of an increase in utility costs; rents were raised the previous two years (’03-’04 and ’04-’05) in the course of the transition, in addition to other cost increases that occur annually.

By Rosa Cao

MIT undergraduate and graduate students are paying about 6 percent more on average for on-campus housing this year than last. Increases for particular rooms and buildings vary significantly, from 3 percent for some rooms in Eastgate, a graduate dormitory for married students, to 12 percent in East Campus doubles, according to numbers provided by the Housing Office.

The two primary reasons for the increase are changes in MIT’s operating budget forcing the housing system to become self-sufficient and recent rises in natural gas and energy prices, said Peter D. Cummings, assistant director for Business Services.

By employing three years of higher than normal rent raises, the housing system gradually shifted to meet all costs of running and maintaining the system through rent income, Cummings said. He said utilities expenditures for this academic year will be about $8 million, up from $7 million last year.

Other costs include debt servicing for large expenditures, (budgeted between $3 and $5 million per year) such as the recent upgrade of the Eastgate heating system, security, facilities, custodial and administrative staffing, and lost income from unfilled vacancies.

Varied concern over rising costs

An undergraduate living in a double in Baker was charged $2280 per semester for the ’03–’04 academic year; paid 6 percent more, $2417, in ’04–’05; and will pay an additional 7 percent, or $2586 per semester, this year.

Similarly, a graduate student living in a single in Ashdown House would have paid $522 a month (or about $2350 a semester) in ’03–’04; 5 percent more, or $548 a month ($2466 per semester) in ’04–’05; and an additional 6.5 percent to total $584 a month ($2628 per semester) this year, according to Housing Office numbers.

Cost appears to be a less immediate concern for undergraduates, some of whom may not pay their bills directly. Former MacGregor House resident Valerie J. Willard ’07 said, “I guess it goes up a little bit every year, but I’m not sure.”

Eric M. Jonas G commented that, “while undergrads spend a ton of their time caring about housing in the ‘where do I live’ sense, the economics of the situation don’t often come into play,” since most undergraduates don’t consider off-campus options other than fraternities, sororities, and independent living groups.

New dormitories such as Simmons Hall and Sidney-Pacific have significantly higher rents than older dormitories such as Bexley Hall or Ashdown. These rents reflect the types of rooms available, as well as the amenities provided in the building.

Ronak J. Bhatt G, a member of the Sidney-Pacific board of trustees said in an e-mail that he is concerned over the “gentrification” of the system, as “it decreases the heterogeneity of our living communities.”

He said he was particularly concerned with the rapidity of price rises. “In Sidney-Pacific, for example, where some rents have risen over 25 percent since [academic year ’02 –’03], numerous residents and experienced government officers have been leaving the community, citing the rising costs as their primary reason.”

Graduate Student Council president Emilie Slaby G said that “the cost of housing is a perennial concern for the graduate student community.”

Graduate housing records show that two-thirds of the graduate student population lives off-campus.

FSILG rent lower than dorms

Director of Housing Karen A. Nilsson said she estimates on-campus rents are between 80 and 90 percent of market rates in similar neighborhoods in Cambridge, amounting to between $400 and $600 monthly for undergraduate housing and between $500 and $1100 for graduate housing. While dorms generally have a small number of vacancies at any given time, the waiting list for the system exceeds the number of vacancies. FSILGs offer lower rents than available in the dormitories, although these savings may be offset by greater chore commitments and meal plan costs, she said. Of the slightly more than 4000 undergraduates at MIT, about 3000 are currently living in dormitories.

Some undergraduates do leave the dormitory and FSILG nest; Willard left MacGregor house for a Brookline apartment near the Boston University campus over the summer. “My single was tiny; the kitchen and bathroom was shared between eight people; we didn’t get much considering how much it cost ... now I pay about $300 a month more, but the place is more than twice as nice.”

Rents differ based on costs, quality

Cummings said Housing’s operating budget is about $34 million this fiscal year. The distribution of rents across the 2942 undergraduate and 2221 graduate dorm beds is based on the perceived relative values of the different available rooms, depending on factors such as the type of room, the quality of the building, and proximity to campus.

For the graduate system, these values were assessed by a 2002 GSC study.

“There are subtle differences between the way we set [graduate] and [undergraduate] rents,” Cummings said, “since graduate students are independent adults supporting themselves on stipends.”

Nilsson said that undergraduate rents are determined by a committee, involving the Budget Office, Financial Aid, and the deans. If the final prices approved by the committee are lower than those proposed by Housing as sufficient to meet costs for the year, non-crucial maintenance and renovations projects are delayed.

As a comparison, Harvard is charging its undergraduates a flat rate of $5148 this academic year (or about $570 per month) regardless of house assignment or room type. This represents an increase of 3.5 percent over the previous year’s rate of $4974, which was itself a 5.7 percent increase over the ’03–’04 rate of $4706, according to Harvard’s Web site.