Graduate Housing Rates to RiseBy Kathy Dobson
ASSOCIATE NEWS EDITOR
Rent rates for on-campus graduate student housing will likely rise 5.5 percent next year, said Dean for Student Life Larry G. Benedict. The rent hike is mostly due to an increase in utilities costs, a rise in networking costs, and debt restructuring.
Undergraduate rent rates have not been finalized but are likely to increase by more than 5.5 percent, Benedict said.
Although there is still flexibility in the structure of the rent increase, including an option for a differential between married and single rent rate hikes, Benedict said that the housing office “cannot change the revenue target.” Next year, the target revenue is $19.5 million for graduate housing and $15.5 million for undergraduate housing.
If the rate structure remains a flat increase across the board, next year’s graduate student rates will average about $739 per month for singles and $1,121 per month for married couples. “Five-and-a-half percent is a substantial increase,” said Peter D. Cummings, assistant director for business services. “We recognize that.”
Utilities, repairs add to costs
Cummings said that about $7 million, or about 20 percent of the total revenue for on-campus housing, has been set aside for next year’s utilities costs.
A substantial rise in natural gas and oil prices has been the main factor driving the utilities cost increase, said Dean for Graduate Students Isaac M. Colbert.
Benedict said that colder-than-normal winters in the past few years have contributed to additional utilities costs. Last year, utilities cost $1 million more than budgeted and this year, they are expected to go $750,000 over budget.
Old and flawed heating systems are also increasing costs. This past year, Eastgate Apartments underwent a costly renovation to replace its heating system. Because of breaking pipes and flooding, MIT was forced to “either replace the heating system or close the dorm,” said Michael R. Folkert G, co-chair of the Graduate Student Council’s Housing and Community Affairs Committee. Other older dormitories, such as Ashdown House, have similarly flawed and inefficient systems.
“We can’t start from scratch in building a new system,” Cummings said, and therefore must deal with the problems of older buildings. The dormitories repairs are “put in priority of life safety.”
Housing office takes on debt
Debt restructuring has also driven up housing costs. “Now housing is responsible for all its debt,” and the housing office must raise revenue to match expenses, Cummings said. Previously, much of the debt incurred by building new dormitories was paid for by MIT.
“Employee benefit rates went up as well,” Cummings said.
Benedict said that next year, some money will be taken out of the housing reserve fund to cushion the rent hike.
Revenue lost to vacancies
High vacancy rates, mostly during the summer, is “one of the problems we have that is significant to the graduate students,” Cummings said. Last year, vacancy rates ranged from 14 to 31 per cent in the summer months and 2 to 5 per cent for the rest of the year.
MIT lost $1.8 million in revenue to vacancies last year, $1.2 million of which was due to vacancies during the summer. Sidney-Pacific and Ashdown have the highest vacancy rates.
On-campus rates below average
Despite the rate hike, on-campus rates are still lower than off-campus rates.
According to a survey conducted in 2002 by the GSC Cost of Living Advisory Board, graduate students who live off-campus pay an average of $2,500 more for rent and utilities per year than students who live on-campus. Married students pay an average of $5,000 more for rent and utilities off-campus than on-campus.
“Students who live on-campus actually get quite a break compared with students who live off-campus,” Colbert said.
According to the United States Office of Housing and Urban Development, rents for off-campus housing are not expected to increase next year.
GSC to push for differential rates
Folkert said that he expects the GSC to push for a lower rate increase for married housing than for single housing. He said that married student dormitories are older, in poorer condition, and smaller, In addition, they have no common spaces, and many have childcare facilities which aren’t used by married students. Compared to single students, married students are “paying the same rate for a much worse apartment,” he said.
Folkert said that the GSC will likely suggest that a differential be kept between married and single rent hikes. Last year’s rate increase was 3.6 per cent for single students and 1.6 percent for married students. “It makes sense for that to continue this year,” he said.
In the future, Cummings said that the housing office will pursue ways to keep rates down including reducing vacancy rate, seeking efficient ways to reduce energy and utility costs, and working with the budget office to get good interest rates on loans.