While Justin and I are both pretty big fans of living in residence, and had a great time living there not-so-long ago (ok… so it’s been a few years now), today’s students face a much different cost-benefit ratio than we did just a few years ago. When we started living in residence back in the Stone Age of 2005, the cost to rent a room in residence, plus a meal plan that fed a 200-pounder (the maximum) was about $6,500. That sounds pretty reasonable right? I mean when you look at what renting an apartment for 12 months costs, in addition to grocery shopping for, and then cooking your own food, plus increased transportation costs, I believe that at $6,500 residence and apartment living were actually coming out pretty close to even. The problem is that residence fees in many parts of the country have risen at incredible rates over the past decade. This disregard for general inflation rates seems to be part of the world of education these days, but I digress.
Building a Residence to the Sky…The new residence that recently open up on our old stomping grounds is the Pembina Hall residence at the U of M. For a single room, and a comparable meal plan to what I used to have seven years ago, University Housing now wants almost $11,000 of your money (in fairness to the U of M they have several other options on campus that are substantially cheaper, so I’m “cherry-picking” my argument a little here). I know that back in my day the milk man brought glass bottles to my door, and you could get a chocolate bar for a dime, but damn that’s pricey son. I think it’s hard to say whether residence is “worth it” at any price because different types of people will get more out of all the intangibles that living on campus offers than will others. At $11,000 a year however, I think dollars and cents start to enter into the equation quite heavily.
“The Price Is Wrong Bob” – Happy Gilmore
If we look at living off campus, and you budget in $250 a month for food, $400 a month for rent (I’ll assume that you aren’t living by yourself), and various other utility costs, initial hookup fees, etc (see our interactive student budget for a great comparison tool). I think $800-$850 per month is pretty realistic. Over an 8 month school year we’re looking at about $7,000 in costs. Another key factor to take into consideration however is that you are almost assuredly locked into that apartment contract for all twelve months of the year. If you were planning on staying at your current location for a summer job anyway that’s fine, but if you were planning on moving back home, or moving for work purposes, and you have to pay rent on an apartment – whereas you wouldn’t if you had lived on-campus (8 month contracts), then that must be taken into consideration as well. Even in that scenario though it’s tough to come up with a situation where you’re not paying a large (and growing) premium to live on campus. Like I said before, that premium might be worth it for you, but we’re now talking about several thousand dollars-worth of a premium!
Supply and Demand
The interesting thing to me is that residences on my old campus continue to have 0 vacancies and are turning away dozens (if not hundreds) of students every fall. **Note From Justin – – It was actually 4-500 people… ** From what I have read, the situation is similar across most Canadian campuses. This strong demand will likely allow residence to keep testing the boundaries with just what rates they can charge. So my question is, just how high can they go? A few years ago I would have thought that the $10,000 threshold would be a big deal (even with a meal plan), but apparently it’s not that much of a psychological barrier. I have to believe that anything over $12,000 – especially outside of Vancouver and Toronto – will have to hurt demand substantially. In Winnipeg you could get some pretty gorgeous living spaces fairly close to campus for that sort of money, so I have to think the market would sort of level off at that point. Then again, there is so much to be said for residence atmosphere, as well as the academic benefits to living right on campus, that maybe parents and students will keep paying no matter what. There is a part of me that’s sad when I think that the residence experience might soon be heavily limited based solely on monetary means, but it does appear to be heading in that direction, especially since our cash-strapped governments surely can’t afford to subsidize things.
Have you noticed residence rates going up for on-campus living at your school? When you consider that general inflation has been super low the last few years, why do you think this is?