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At such time as they actually have Tier One funds, and at such time as they are increasing their enrollment as a consequence of greater brand awareness outside of Houston, then it might make sense to develop more student housing. Don't put the cart before the horse.

I understand you're comparing the need for housing to their actual mission statement but what is your opinion as to why any college provides student housing? Do you believe only schools in Podunk towns with very little housing options should provide them?

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Quite a few updates in the last meeting.   Law school:  Budget: $90M Square Feet 179k SF Floors: 5 Completion: August 2022 Architect/Engineer: Shepley Bulfinch

https://www.uh.edu/news-events/stories/2019/november-2019/11182019-lawbuilding.php    

UH new Fertitta center

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I still fail to understand how dormitories as a budgetary priority is fitting with any aspect of UH's mission as a university. It's not that they aren't nice to have, it's that there are 1) better programmatic uses of the funds, and 2) way to achieve better bang for the buck with respect to a program enhancing brand awareness.

Not sure how they are funding the dormitories at UH. Is it possible they are not using general University funds for their construction, but are essentially self-funding them e.g., with dormitory system revenue bonds? I think some schools do it that way.

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I understand you're comparing the need for housing to their actual mission statement but what is your opinion as to why any college provides student housing? Do you believe only schools in Podunk towns with very little housing options should provide them?

Most new student housing is privately-developed on land that has either been sold or placed on a long-term lease with a developer or that is privately-owned and is close enough to a university that students can walk there or ride transit. Such student housing is typically garden-style, although it can go midrise in some urban environments, and provides suites intended to house one student per bedroom instead of the traditional SRO setup. American Campus Communities is an example of one of the more active developers of this asset type. Clearly there is benefit to having student housing near a campus. If there weren't, companies like American Campus Communities would not exist. However, the fact that such companies do exist begs the question as to whether there is a market failure that requires public intervention.

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Most new student housing is privately-developed on land that has either been sold or placed on a long-term lease with a developer or that is privately-owned and is close enough to a university that students can walk there or ride transit. Such student housing is typically garden-style, although it can go midrise in some urban environments, and provides suites intended to house one student per bedroom instead of the traditional SRO setup. American Campus Communities is an example of one of the more active developers of this asset type.

At UH? My understanding is they own the land and manage the student housing themselves.

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I still fail to understand how dormitories as a budgetary priority is fitting with any aspect of UH's mission as a university. It's not that they aren't nice to have, it's that there are 1) better programmatic uses of the funds, and 2) way to achieve better bang for the buck with respect to a program enhancing brand awareness.
I still want to see research linking dormitory use with alumni donations. Even if there is significant alumni giving as a consequence of dormitory use, which I am dubious of, it seems like the rate of alumni giving would peak 20 to 30 years after a person graduates. Consider that the discounted value of $100 at 5% interest 25 years from now is only $29.53.

Opportunity cost is a b.i.t.c.h.

LOL. Like I've said before, figure it out for yourself. Obviously, being a lurker for the past 5 years, I know you are the kind of person who needs things to be broken down in order to understand things you don't get or don't agree with. Furthermore, like I said I don't really care about researching anything for you in this thread because I could care less whether or not you agree. Even furthermore, who said it was a budget priority or that alumni donations was a driving force in building dorms? Lastly, it's intersting that a UH alumni like yourself seems to know less what's going on their campus than someone who never set foot on their campus.

Talk about a buzzkillington.

Edited by kdog08
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At UH? My understanding is they own the land and manage the student housing themselves.

They do. And that's the legacy of traditional student housing. But there's been a national paradigm shift over the last decade. Most new student housing is developed by private for-profit entities.

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LOL. Like I've said before, figure it out for yourself. Obviously, being a lurker for the past 5 years, I know you are the kind of person who needs things to be broken down in order to understand things you don't get or don't agree with. Furthermore, like I said I don't really care about researching anything for you in this thread because I could care less whether or not you agree.

I prefer things that I don't understand to be broken down primarily because making assumptions about a line of argument that I don't understand results in frequent errors and miscommunication. It's just good form.

Even furthermore, who said it was a budget priority or that alumni donations was a driving force in building dorms?

It is obviously a budgetary priority because they're allocating resources to dorms instead of to other programs. They had many options and they chose this one.

Alumni donations were suggested previously in this thread as the reason that a larger on-campus residential population would be justified.

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I prefer things that I don't understand to be broken down primarily because making assumptions about a line of argument that I don't understand results in frequent errors and miscommunication. It's just good form.

If this were a board room meeting I would agree but this is the internet yo. Not everyone who presents a response to you or makes a statement is obliged to indulge you by providing a cost-benefit analysis. I know you are smart guy and could look things up for yourself, but if you are lazy like me then say so.

It is obviously a budgetary priority because they're allocating resources to dorms instead of to other programs. They had many options and they chose this one.

I guess it depends on what a priorty is to you. Do we know how much of UH's budget is being spent on dorms? We could start having a meaningful discussion about priorities if that was known.

Alumni donations were suggested previously in this thread as the reason that a larger on-campus residential population would be justified.

So were a few other responses that aren't mentioned by you.

Do you feel that private for profit entities shouldn't be developing student housing? Or are you simply waiting for data to make a decision?

Edited by kdog08
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If this were a board room meeting I would agree but this is the internet yo. Not everyone who presents a response to you or makes a statement is obliged to indulge you by providing a cost-benefit analysis. I know you are smart guy and could look things up for yourself, but if you are lazy like me then say so.

I am lazy like you.

I guess it depends on what a priorty is to you. Do we know how much of UH's budget is being spent on dorms? We could start having a meaningful discussion about priorities if that was known.

It doesn't matter how much of their budget is being spent on dorms. In economics, there is a concept called marginalism. As it applies to the cost-benefit analysis of a portfolio of potential projects, it holds that feasible projects should be undertaken in descending order according to IRR until the capital budget is exhausted. As projects are sequentially green-lighted as one descends the ordered list, each of the remaining uncommitted projects becomes the top priority. If UH's capital budgeting program was carried out professionally, then at some juncture new dorms would've been the highest-priority (i.e. the highest-yielding IRR) uncommitted capital expenditure, surpassing the merit of any other potential uncommitted capital expenditures. There you have it. Priority.

At least, that's how they teach the analytical procedure for capital budgeting at UH.

Given my professional knowledge about student housing, and also a compelling theoretical framework to assess the attractiveness of a university to potential students and how that relates to its reputation and the fulfillment of its mission, I am dubious of the merit of university-owned student housing as a capital expenditure as compared to alternative projects.

Can you field a compelling rebuttal?

Do you feel that private for profit entities shouldn't be developing student housing? Or are you simply waiting for data to make a decision?

Many other universities that aren't nearly as large as UH have attracted private student housing developers. I know for fact that at least two such firms have evaluated UH for opportunities in years past, however they have not been able to justify projects (even when capital was freely flowing through the CMBS markets). If the private sector cannot justify student housing at UH, it seems extremely unlikely that a student housing development would hold its own as proposed by UH itself, especially under the antiquated SRO paradigm, which is what this project sounds like. Therefore it stands to reason that UH is propping up the project from elsewhere in its budget, depriving some alternative project of finite funds.

If student housing can be provided by private developers, more power to them. However, if that's something that they're able to provide, then there does not appear to be a market failure such as would justify intervention on the part of a public entity.

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I am lazy like you.

I appreciate your honesty.

It doesn't matter how much of their budget is being spent on dorms. In economics, there is a concept called marginalism. As it applies to the cost-benefit analysis of a portfolio of potential projects, it holds that feasible projects should be undertaken in descending order according to IRR until the capital budget is exhausted. As projects are sequentially green-lighted as one descends the ordered list, each of the remaining uncommitted projects becomes the top priority. If UH's capital budgeting program was carried out professionally, then at some juncture new dorms would've been the highest-priority (i.e. the highest-yielding IRR) uncommitted capital expenditure, surpassing the merit of any other potential uncommitted capital expenditures. There you have it. Priority.

At least, that's how they teach the analytical procedure for capital budgeting at UH.

Given my professional knowledge about student housing, and also a compelling theoretical framework to assess the attractiveness of a university to potential students and how that relates to its reputation and the fulfillment of its mission, I am dubious of the merit of university-owned student housing as a capital expenditure as compared to alternative projects.

Can you field a compelling rebuttal?

Many other universities that aren't nearly as large as UH have attracted private student housing developers. I know for fact that at least two such firms have evaluated UH for opportunities in years past, however they have not been able to justify projects (even when capital was freely flowing through the CMBS markets). If the private sector cannot justify student housing at UH, it seems extremely unlikely that a student housing development would hold its own as proposed by UH itself, especially under the antiquated SRO paradigm, which is what this project sounds like. Therefore it stands to reason that UH is propping up the project from elsewhere in its budget, depriving some alternative project of finite funds.

If student housing can be provided by private developers, more power to them. However, if that's something that they're able to provide, then there does not appear to be a market failure such as would justify intervention on the part of a public entity.

Well my expertise is in biochemistry and microbiology so all this information is new to me. I do enjoy learning new things which is why I like this site. However, after your lengthy response, why then is UH doing exactly what you just said shouldn't be a priority. Why are universities investing and building dorms that aren't worthwhile then?

Edited by kdog08
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I appreciate your honesty.

Well my expertise is in biochemistry and microbiology so all this information is new to me. I do enjoy learning new things which is why I like this site. However, after your lengthy response, why then is UH doing exactly what you just said shouldn't be a priority. Why are universities investing and building dorms that aren't worthwhile then?

Well it seems most likely that either my professional experience has led me astray and this dormitory project holds its own water, the University has omitted a key point from their mission statement, or the the University isn't using an effective capital budgeting process.

Btw, this is OT but I've got a friend who is an LVN and that wants to get out of nursing and go back to school for a biochem degree. Seems like it's coming down to either UH or UTSA. How would you evaluate that program?

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They do. And that's the legacy of traditional student housing. But there's been a national paradigm shift over the last decade. Most new student housing is developed by private for-profit entities.

As far as I know, the Quadrangle dorms and Towers dorms were developed by UH.

Cambridge Oaks = partnership between UH/Century Property (1991)

Cullen Oaks = partnership between UH/American Campus Communities (2000)

Bayou Oaks = partnership between UH/American Campus Communities (2003)

Best I can tell from a quick internet search, UH is developing Calhoun Lofts and the new freshman dorms on Wheeler on their own.

So, it appears UH has tried both methods, and apparently has decided to go it alone. Maybe their experience has been that they're better off developing on their own? I don't know...

Btw, this is OT but I've got a friend who is an LVN and that wants to get out of nursing and go back to school for a biochem degree. Seems like it's coming down to either UH or UTSA. How would you evaluate that program?

I have a friend who graduated from UH's biochem program...he's now a successful television reporter in California! :P

Edited by Original Timmy Chan's
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So, it appears UH has tried both methods, and apparently has decided to go it alone. Maybe their experience has been that they're better off developing on their own? I don't know...

It would seem more likely that they weren't able to find a developer willing or able to take on the project on terms that were amenable to UH. Again, if the private sector can't do it...

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It would seem more likely that they weren't able to find a developer willing or able to take on the project on terms that were amenable to UH. Again, if the private sector can't do it...

Bing...

They are still seeking "private assistance" for the new Freshmen dorms that are under development... though I highly doubt it will be anything like the way Bayou or Cullen Oaks have been run. Many students have been displeased with their customer service.

For UH, public-private partnerships have proven to be almost perfectly pertinent.

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Many might find it surprising, but UH has had overcrowding in the dorms over the last few years. Demand is greater than the supply of beds. I know that they've had to turn common rooms into bedrooms in places like the Moody Towers.

The two main factors holding UH back are a pathetic alumni giving rate (less than 6%) and low 6 year graduation rates (less than 60%).

It is widely believed that if UH can draw more traditional students who also choose to live on campus, they can raise both the giving rates and the graduation rates. It doesn't take too much of a leap of faith to see how students who live on campus might find a stronger connection to the school.

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It is obviously a budgetary priority because they're allocating resources to dorms instead of to other programs. They had many options and they chose this one.

This is where I think you've gone astray, Niche. It is very possible (even likely) that the dormitories are funded with revenue bonds, backed by the revenue generated by the dormitories. (This is the way the graduate student housing was funded, I believe.) If so, then they are not allocating resources to dorms instead of to other programs. (Because the revenue bond resources would not in fact be available but for the dorms.)

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This is where I think you've gone astray, Niche. It is very possible (even likely) that the dormitories are funded with revenue bonds, backed by the revenue generated by the dormitories. (This is the way the graduate student housing was funded, I believe.) If so, then they are not allocating resources to dorms instead of to other programs. (Because the revenue bond resources would not in fact be available but for the dorms.)

The capital structure is not especially relevant. Private developers issue collateralized debt, too, and lots of it.

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The capital structure is not especially relevant. Private developers issue collateralized debt, too, and lots of it.

I was addressing your complaint about them prioritizing the dormitories over other investments, not the question of public or private developers. If they are using revenue bonds backed by the revenue from the dormitories, then they are NOT in fact allocating resources to dormitories instead of to other programs. The resources being allocated to the dormitories are being generated by the dormitories and are not available for other programs.

Edited by Houston19514
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It is widely believed that if UH can draw more traditional students who also choose to live on campus, they can raise both the giving rates and the graduation rates. It doesn't take too much of a leap of faith to see how students who live on campus might find a stronger connection to the school.

Also I would not be surprised if some of it had to do with the Honors College. If I were a potential honors student I would be really turned off by the dorms.

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I was addressing your complaint about them prioritizing the dormitories over other investments, not the question of public or private developers. If they are using revenue bonds backed by the revenue from the dormitories, then they are NOT in fact allocating resources to dormitories instead of to other programs. The resources being allocated to the dormitories are being generated by the dormitories and are not available for other programs.

Considering the considerably higher cost per square foot of developing midrise and highrise residential structures and that they appear to be going with an antiquated SRO layout, I think that they can probably fill up the place at such a rent as is insufficient to achieve a cash-flow-neutral project with 100% debt or that they'll end up with vacancy that is insufficient to achieve a cash-flow-neutral project with 100% debt. It strikes me as extremely unlikely that UH can develop and operate this facility without making fairly significant cash outlays or without making commitments to debt holders that may tie their hands on future projects for which they would want to issue debt. Even among public entities, there's no such thing as a free lunch.

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Considering the considerably higher cost per square foot of developing midrise and highrise residential structures and that they appear to be going with an antiquated SRO layout, I think that they can probably fill up the place at such a rent as is insufficient to achieve a cash-flow-neutral project with 100% debt or that they'll end up with vacancy that is insufficient to achieve a cash-flow-neutral project with 100% debt. It strikes me as extremely unlikely that UH can develop and operate this facility without making fairly significant cash outlays or without making commitments to debt holders that may tie their hands on future projects for which they would want to issue debt. Even among public entities, there's no such thing as a free lunch.

Apparently, UH disagrees with your analysis:

February 19, 2009

REGENTS APPROVE NEW RESIDENCE HALL, RENOVATIONS TO DINING FACILITIES

The University of Houston System Board of Regents recently approved two major construction projects that will play key roles in building a stronger "Cougar Nation."

The regents approved a new undergraduate residence hall and a major renovation to Moody Towers

Edited by Houston19514
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Apparently, UH disagrees with your analysis:

February 19, 2009

REGENTS APPROVE NEW RESIDENCE HALL, RENOVATIONS TO DINING FACILITIES

The University of Houston System Board of Regents recently approved two major construction projects that will play key roles in building a stronger "Cougar Nation."

The regents approved a new undergraduate residence hall and a major renovation to Moody Towers’ dining hall. Both projects soon will break ground and will have long-term impact on the campus community.

"These are significant projects that will contribute greatly to student success" said David Irvin, associate vice president of plant operations. "They also are among the many planned projects that will help the university continue to look and feel like a top-tier institution."

The new co-ed residence hall will be located along Wheeler Avenue between Moody Towers and the Quadrangle. The 284,964-square-foot facility will house 1,085 students and contain tutoring rooms, classrooms, social spaces and a small grocery store. It is budgeted at $50 million and will be paid for through student rental fees.

They're trying to pack in one student per every 263 square feet, inclusive of the common areas and the classroom/tutoring/grocery spaces not related to the housing, and this project is probably going to cost about twice per net rentable square foot of space what other recent housing projects have cost. There is a reason that there isn't a private partner involved in this deal.

They can disagree all they like. I stand by my analysis and I most definitely stand by my earlier conclusion that there is no such thing as a free lunch.

EDIT: To put things in perspective, they're talking about a 20% increase in the number of beds by way of this one project. Counting the Calhoun Lofts, which is nearing completion, these two projects will have increased the number of beds at UH by 38% within only a couple of years. Once again, there is a reason that there isn't a private partner involved in this deal.

Edited by TheNiche
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Oh and yes...those new Calhoun lofts start at around 800 dollars a month. At that price, I could probably get a decent efficiency somewhere in Midtown or something.

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As far as I know, the Quadrangle dorms and Towers dorms were developed by UH.

Cambridge Oaks = partnership between UH/Century Property (1991)

Cullen Oaks = partnership between UH/American Campus Communities (2000)

Bayou Oaks = partnership between UH/American Campus Communities (2003)

Best I can tell from a quick internet search, UH is developing Calhoun Lofts and the new freshman dorms on Wheeler on their own.

So, it appears UH has tried both methods, and apparently has decided to go it alone. Maybe their experience has been that they're better off developing on their own? I don't know...

Right. The last university-owned and run housing was Cougar Place, which was built in 1981. All the later housing complexes listed above have been built on university-owned land, but are not the property of the university. I have lived at Cullen Oaks, and currently live at Cambridge Oaks. While I was a student at UTSA, I also lived at another Century Campus Housing (now it's actually known as Campus Living Villages) property, so I'm familiar with this business model.

At UH even though the aforementioned properties are privately managed, they do this in conjunction with the university's Residential Life and Housing department. They use some of the university's utility services as well. For example, while I was at Cullen Oaks, the complex was forced into using the residential network for internet access (the same one in use at the Quadrangle/Moody Towers), and it was horrible. I was told by the management that it was Residential Life and Housing's call. If a resident owes money to one of the private complexes, the management can also request that a hold be placed on the student's university records. This can actually stop a student from registering for classes and graduating. Even if a student is paid off, the change won't be immediate, and the management can only get the hold removed by calling/emailing Residential Life and Housing.

Calhoun Lofts and the new Wheeler dorms will both be done using the traditional campus-housing model, and I think it's a good thing. It gets messy when things are mixed with private owners/management. It is important that UH competes with off-campus housing though. I think they're especially attempting to do that with Calhoun Lofts. It will be coming with AT&T U-Verse. I think they also need to upgrade the networks for the rest of campus-housing.

As far as the reasoning for the model UH is using, it may actually just have to do with the fact that the administration has changed. I'm really loving what our President is doing.

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Oh and yes...those new Calhoun lofts start at around 800 dollars a month. At that price, I could probably get a decent efficiency somewhere in Midtown or something.

So, you're predicting they won't be able to fill the Calhoun lofts at these prices, and therefore, they won't be able to self-fund? Time will tell...

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They're trying to pack in one student per every 263 square feet, inclusive of the common areas and the classroom/tutoring/grocery spaces not related to the housing, and this project is probably going to cost about twice per net rentable square foot of space what other recent housing projects have cost. There is a reason that there isn't a private partner involved in this deal.

They can disagree all they like. I stand by my analysis and I most definitely stand by my earlier conclusion that there is no such thing as a free lunch.

EDIT: To put things in perspective, they're talking about a 20% increase in the number of beds by way of this one project. Counting the Calhoun Lofts, which is nearing completion, these two projects will have increased the number of beds at UH by 38% within only a couple of years. Once again, there is a reason that there isn't a private partner involved in this deal.

So, I guess you are predicting they won't be able to rent these dorm rooms at their forecast rates?

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So, I guess you are predicting they won't be able to rent these dorm rooms at their forecast rates?

The sheer increase in the amount of on-campus student housing in such a short period of time is enough to raise a red flag. How deep is the pool of demand right now, how much will demand be cannibalized after Calhoun is marketed, and what is their forecasted absorption rate? If financed entirely by debt, I forsee that there will be negative cash flow issues that plague them for at least the first several years.

If I were them, I'd wait for about two years and see how well Calhoun is received by the marketplace, then proceed (or not) based on an analysis using stabilized market data.

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The sheer increase in the amount of on-campus student housing in such a short period of time is enough to raise a red flag. How deep is the pool of demand right now, how much will demand be cannibalized after Calhoun is marketed, and what is their forecasted absorption rate? If financed entirely by debt, I forsee that there will be negative cash flow issues that plague them for at least the first several years.

If I were them, I'd wait for about two years and see how well Calhoun is received by the marketplace, then proceed (or not) based on an analysis using stabilized market data.

We shall see. These are planned to be ready for the 2010 school year. I would presume/hope that someone at UH has run the numbers on demand for dorm space. And, since I believe they are probably using revenue bonds to fund this, apparently the bond purchasers have been satisfied with the numbers as well.

But more to the point, whether or not their projections are accurate, UH does not believe that it is necessary to prioritize dorms over other projects, and they have in fact not done so. They are of the belief that the dorms can be self-funding, something that many other schools have done and they have done before as well.

Edited by Houston19514
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In addition, dorms can be privately funded. There is also already an example of this on the UH campus.

Where did $800 come from? Their site says $545/person.

That's the base price...there is also a "utilities package" that costs another $300+.

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That's the thing; 545 is per person, if you get a basic one bedroom unit, which is split between two people. An efficiency is around 800+. I spoke to someone a bit back about it since I was interested in housing next semester, but it's too pricey for me, esp since I will have to rely on loans.

I'm not exactly sure how much the regular dorms are; anyone care to fill me in on that?

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That's the thing; 545 is per person, if you get a basic one bedroom unit, which is split between two people. An efficiency is around 800+. I spoke to someone a bit back about it since I was interested in housing next semester, but it's too pricey for me, esp since I will have to rely on loans.

I'm not exactly sure how much the regular dorms are; anyone care to fill me in on that?

Ok, I have toured these lofts and they are absolutely phenomenal. I would absolutely love to live there. HOWEVER whoever is running the numbers on this thing needs to get fired! At first they had opened it to graduate students only, shortly after they added the "Professional Students" students in PPA, PES, etc. Then they opened it up to upperclass men (Juniors and Seniors) and NOW they just opened it up to sophmores! This is why:

$810 for an efficency. (The living room doubles as your bedroom)

$1090 for a ONE bedroom. (It's $545 if you share with a roomate, the rooms are really small)

$1620 for a TWO bedroom.

*All rooms requre a one year agreement*

At these prices they are never going to get this thing filled :doh: You can tell that they are not filling these up as fast (if any) as they would like because they keep opening it up to more and more students, I would not be surprised if freshmans would be allwoed to live there next. I know of a lot of students who want to live on camus and we finally found something that was right next to out classes and "safe" HOWEVER they are pricing out students left and right. We minus well go get a house and rent out all the rooms.

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The sheer increase in the amount of on-campus student housing in such a short period of time is enough to raise a red flag. How deep is the pool of demand right now, how much will demand be cannibalized after Calhoun is marketed, and what is their forecasted absorption rate? If financed entirely by debt, I forsee that there will be negative cash flow issues that plague them for at least the first several years.

If I were them, I'd wait for about two years and see how well Calhoun is received by the marketplace, then proceed (or not) based on an analysis using stabilized market data.

Pretty big actually...

1) Cougar Place is on the chopping block... as it should be. That facility is in shambles and needs to be raised.

2) UofH hit record enrollment last year at above 36,000 students for the main campus. That's last year as in Fall 2007. We'll get the data for 08-09 next semester, but from my workload as an Academic Advisor and the onslaught of the recession to Houston, there's no way enrollment decreased.

3) Moody Towers was overbooked by almost 100 people in Fall 08. They were reported for being in violation of the fire code... some of the students had to sleep on cots in the basement and in the lounge of the dorms. It was a real mess at the beginning of the semester.

I guess I don't understand the difference between having a private-owned facility and a university-owned facility. The actual dorms are going to be run by the university (as opposed to an outside company like Cullen Oaks), but the retail portions will be private entities in Calhoun Lofts. Just FYI, they're having trouble filling Calhoun Lofts with graduate students, but have received a flood of requests from undrgrads, and they decided to open the facility to seniors and juniors just so they could meet the expected quota (I'm not sure if it's been met yet though).

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Oh and yes...those new Calhoun lofts start at around 800 dollars a month. At that price, I could probably get a decent efficiency somewhere in Midtown or something.

Yes... if you're already familiar with the Houston area, and/or can find a roommate to share with you. Otherwise $800 is getting harder to find in Midtown or Montrose.

I know for my graduate program, all but one of the people in my class were from outside of the Houston area. We tend to associate UH with "local education" but many people (at an increasing rate) come from out of town and all over the country to attend here. Calhoun Lofts will (hopefully) be a great deal for these students.

Edited by totheskies
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But hey, I'm an architecture student. It's not like I'll be sleeping much in those dorms anyway!

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We shall see. These are planned to be ready for the 2010 school year. I would presume/hope that someone at UH has run the numbers on demand for dorm space.

So do I. I hope I'm wrong.

But more to the point, whether or not their projections are accurate, UH does not believe that it is necessary to prioritize dorms over other projects, and they have in fact not done so. They are of the belief that the dorms can be self-funding, something that many other schools have done and they have done before as well.

The actions undertaken by UH run counter to the student housing paradigm. To be clear, I'm not saying that there aren't other examples of student housing undertaken solely by universities in the last decade, just that they're uncommon...and on the whole, for good reason.

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The actions undertaken by UH run counter to the student housing paradigm. To be clear, I'm not saying that there aren't other examples of student housing undertaken solely by universities in the last decade, just that they're uncommon...and on the whole, for good reason.

Whether or not any of that is true, it doesn't change the fact that UH has undertaken to build dormitorieswithout having to prioritize them over other programs.

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Whether or not any of that is true, it doesn't change the fact that UH has undertaken to build dormitorieswithout having to prioritize them over other programs.

Unless the full capital cost of the dormitories are financed in their entirety by non-recourse revenue bonds and net operating income is consistently sufficient to pay down the debt service, then UH is in fact making a capital budgeting decision that will impact their cash positions or that exposes them to all variety of financial risks or that increases their aggregate leverage ratio and has a marginal increase of their cost of capital for future projects.

Putting things in italics appears to be important to you, so I'm going to say this one more time: there is no such thing as a free lunch.

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Unless the full capital cost of the dormitories are financed in their entirety by non-recourse revenue bonds and net operating income is consistently sufficient to pay down the debt service, then UH is in fact making a capital budgeting decision that will impact their cash positions or that exposes them to all variety of financial risks or that increases their aggregate leverage ratio and has a marginal increase of their cost of capital for future projects.

Putting things in italics appears to be important to you, so I'm going to say this one more time: there is no such thing as a free lunch.

:rolleyes: Yes, Niche, we all know there is no such thing as a free lunch. Nobody claimed anything to the contrary. I don't really need a lesson in capital costs or operating costs, least of all from you. I am quite aware that everything in your first paragraph is true. You are using your google skills to their max again, aren't you? ;-)

From the beginning, I have said IF they are funded with revenue bonds supported by the revenue stream of the dormitories (and that appears to be the case), then there is no prioritization necessary vis a vis other projects. Very simple. Nothing you have said above is in any way contrary to or corrective of that.

Edited by Houston19514
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Unless the full capital cost of the dormitories are financed in their entirety by non-recourse revenue bonds and net operating income is consistently sufficient to pay down the debt service, then UH is in fact making a capital budgeting decision that will impact their cash positions or that exposes them to all variety of financial risks or that increases their aggregate leverage ratio and has a marginal increase of their cost of capital for future projects.

Putting things in italics appears to be important to you, so I'm going to say this one more time: there is no such thing as a free lunch.

UH obviously looks at the new dorms as a big bold investment, but to be clear, an increased residential population is presumed to be an essential for Tier 1 status. These dorms are much more than extra sleeping quarters... they are helping to esablish a new UH community. Just like downtown... we could argue forever over whether or not One Park Place was needed there, but to a certain extent, the developers had to take the leap and hope that the project works out for the best. UH continues to grow during the recession, and the student base is now more diverse than ever. It is no longer acceptable for UH to be labled as simply a "commuter campus". If we're going to grow and have any hope of achieving Tier 1 status, these dorms are a critical stone for our future foundation.

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:rolleyes: Yes, Niche, we all know there is no such thing as a free lunch. Nobody claimed anything to the contrary. I don't really need a lesson in capital costs or operating costs, least of all from you. I am quite aware that everything in your first paragraph is true. You are using your google skills to their max again, aren't you? ;-)

From the beginning, I have said IF they are funded with revenue bonds supported by the revenue stream of the dormitories (and that appears to be the case), then there is no prioritization necessary vis a vis other projects. Very simple. Nothing you have said above is in any way contrary to or corrective of that.

You must need a lesson in finance, otherwise you would not have made the absurd statements that you have. If you are so incapable of reading comprehension as that you continue to press points that I've already addressed, then I'm sorry but I can't help you any further.

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By whom and for what reason? Platitudes are not sufficient.

Precedent. Most Tier 1 (AAU) schools have tight residential communities, notable faculty, a healthy endowment and state-of-the-art research facilities. It only makes sense that UH would want to model itself off of the Tier 1 schools that are already in existence. UT and A&M are known for having strong residential ties (and probably by no surprise, very strong alumni connections).

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Precedent. Most Tier 1 (AAU) schools have tight residential communities, notable faculty, a healthy endowment and state-of-the-art research facilities. It only makes sense that UH would want to model itself off of the Tier 1 schools that are already in existence. UT and A&M are known for having strong residential ties (and probably by no surprise, very strong alumni connections).

There are many Tier-One-correlated variables already listed in your statement; furthermore, I do not believe your list of variables to be exhaustive. You didn't mention football at all, for instance.

Of these many variables, some are more important (i.e. take priority) and likely correlate weakly. In a circumstance where an institution has a finite budget (which is to say, every circumstance), capital and operating budgets should reflect these priorities.

Furthermore, In the case of on-campus university-operated student housing, much of the existing stock was constructed in a different era and is a legacy of the past, not necessarily reflecting a practical future.

The core of your argument seems to be that they have a physical plant of known characteristics, they are better (for reasons not very well articulated), UH should aspire to be like them, and so UH should have a physical plant of similar characteristics. This is poor reasoning. My own analytical paradigm is as follows: first identify the function of UH, second identify what factors allow that function to be optimally fulfilled provided a finite budget. If the function of UH is to be like UT-Austin or TAMU, then UH needs university-operated student housing. If the function of UH is as described in its mission statements, then university-operated student housing is a dubious proposition at best.

Edited by TheNiche
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There are many Tier-One-correlated variables already listed in your statement; furthermore, I do not believe your list of variables to be exhaustive. You didn't mention football at all, for instance.

All I did was make a list, forgive me if I didnt's specify in the aforementioned post that I was only discussing the first of the listed criteria, and took it to reason that (along with the current trends within this thread) that I didn't need to go into detail about the remaining criteria.

Of these many variables, some are more important (i.e. take priority) and likely correlate weakly. In a circumstance where an institution has a finite budget (which is to say, every circumstance), capital and operating budgets should reflect these priorities.

Furthermore, In the case of on-campus university-operated student housing, much of the existing stock was constructed in a different era and is a legacy of the past, not necessarily reflecting a practical future.

Whether or not they were practical in the past doesn't matter in the present. If all developers thought this way, then Houston in its current form would most certainly NOT EXIST. If Moody Towers, the Quadrangle and Cougar Place were sitting unused during the regular school year, then you may have a point in this statement, but the fact that the dorms have been filled to capacity for several years now, and that the university cannot meet housing demand for all students that wish to live on campus shows that whoever in the past decided to take a gamble on those projects was correct... that gamble paid off. In the case of Cougar Place, it's a shame that they decided to build the facility with cheap construction materials, but still it remains in use because University Housing has run out of room. Business practicality is very important to an institution and is LIFE or DEATH to a private company, but UH has the dubious distinction of being a public entity for the Houston community. Sometimes, they have to stick their necks out and make impractical business decisions because they see need down the road.

The core of your argument seems to be that they have a physical plant of known characteristics, they are better (for reasons not very well articulated), UH should aspire to be like them, and so UH should have a physical plant of similar characteristics. This is poor reasoning. My own analytical paradigm is as follows: first identify the function of UH, second identify what factors allow that function to be optimally fulfilled provided a finite budget. If the function of UH is to be like UT-Austin or TAMU, then UH needs university-operated student housing. If the function of UH is as described in its mission statements, then university-operated student housing is a dubious proposition at best.

Your statement here is somewhat confusing, but I'll try to respond...

UH does not want to "be like" Rice, UT or A&M, but they do see some areas in which those schools have solid operating systems, whil UH may need some improvement in those areas. UH can never replicate the campuses of other Tier 1 schools. And I agree with you... nowhere in UH's mission statement does it say "be like UT, Rice or A&M". However it does seek to discover and disseminate knowledge through the education of a diverse population of traditional and non-tradtitional students. Anyone who has attended college as a traditional student knows that dorm life was an essential part of their education. And with the Fall of 2009 shaping up to be another record year of FTIC attendance for UH, this part of the mission statement is a top priority.

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