Quasi Government Student Housing a Boondoggle?

Again I find government attacking my ability to make a living and at the same time busy spinning their recent failure into a narrative of better things to come. An article that appeared in my local paper detailed how after a dozen years after opening on the IPFW campus, Purdue University’s first residence halls outside of West Lafayette, Indiana are challenged to reach capacity. Purdue trustees approved funding for housing construction in 2002. The buildings were constructed in three phases, the first opening in 2004, IPFW student housing has not achieved full occupancy since the last of the buildings opened in 2010, school officials say. Including financing costs, about $78 million is still owed on construction. Currently, the units are more than a quarter empty, exactly how much was not indicated. 

Purdue and Indiana universities have jointly run IPFW, with Purdue as the fiscal agent. But in December, trustees for both voted to split IPFW to focus on each university’s strengths. That divorce was proceeded by a look at the school’s enrollment and budgeting woes. While the elimination of some academic programs drew protests as administrators looked to save money, housing also was placed under the microscope. The University Strategic Alignment Process, an internal study released in May, called IPFW housing “not only an unnecessary burden on the finances of IPFW but a missed opportunity related to retention and student success.” Bottom-line these housing units that are priced at sky-high rental rates which punishes students are still losing money.

Quasi Government Student Housing Boondoggle

The positive spin comes when they claim that faced with budget constraints, campus leaders hope to change that by managing the 13-building complex themselves after severing ties with the management company it has used since the units first opened in 2004. The canceled management agreement will save $200,000 a year they claim, however, the argument could be made that with little background in managing housing this is pure folly. Part of their solution is to force, they use the term “require” students who get housing money with their scholarship to live on campus. This scholarship requirement would add 61 more students to the housing, bringing the occupancy rate closer to 80 percent and still fail to fill the units.

The school also is considering converting one building into elderly housing according to Steve George, assistant director of physical plant fiscal affairs, they also plan to implement 21-and-over housing in another which sounds like “age discrimination” to me but that is another discussion. Keying in on the issue of future management I see little upside to well-paid university employees with little experience in housing doing well considering the number of special problems younger tenants often bring with them. As buildings age maintenance problems increase and this type of employee seldom excels in being able to work in an entrepreneurial environment. Housing is a tough business even for those honed in the real estate management and legal skills to navigate the challenges of this sector.

A few other gems in the article were the fluffy statements by freshman Devin Haumesser, 18, an accounting major, lives there and describes the apartments as “really nice compared to other big schools, like the universities, something like that.” Students get their own bedrooms and living space and Taylor Kennedy, 18, a freshman education major, said the apartment-style dorms were the only reason she decided to enroll at IPFW, even though she knows of cheaper housing nearby. As an apartment owner, the opinion of a couple of eighteen-year-old students who may have never spent a night away from home held little sway. What was more telling was when referring to private sector housing in the area Eric Norman, chief student affairs officer, said, “Campus housing and those other complexes are currently at about the same occupancy rate”. I take this to mean all apartment complexes are currently suffering and no compelling reason exist for our state university to have ever undertaken this project.

Consider all this just another minor transgression by the government. It is very small compared to the many schemes they seek to fostered upon us but it is also a good example of how when we look back these projects fail to reach the glorious goals those in charge promise to achieve. As usual, a small insignificant article viewed by few readers picks up the story and puts a little lipstick on the pig. Few people realize how over the years these subsidized units have sapped vigor from the real economy that is also known as the private sector. I see this as proof the university’s student housing project has become simply another quasi-government boondoggle that we will be forced to subsidize for years to come.

Footnote; Stories that delve into what is happening in our communities are important, I consider them as “microeconomic” images of what is occurring in many places across America. The article below delves into why and how government by its very nature expands into every part of our lives.


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