Housing boom puts universities in a contradictory position

Alistair Sisson, University of Wollongong

While university workers have been asked to go above and beyond many times over the course of the COVID-19 pandemic, staff at the University of Wollongong received an email last month that contained a surprising request. UOW’s Housing Services team was asking staff to get in touch if they had a spare room or granny flat that they might be willing to let to a student during the upcoming semester.

As in many regions in NSW, house prices and rents in the Illawarra have skyrocketed since early 2020. The median rent in Wollongong has risen by $50 per week since the beginning of the pandemic and rental vacancies have plummeted from 2.2% to 0.6%. The combination of Sydney-siders who took the opportunity afforded by working from home to move away from busy urban areas to locations offering larger homes and a different lifestyle, and others moving to find cheaper housing, has led to sharp increase in cost and a desperate shortage of rental housing that is now being felt by returning or commencing students.

In August 2021, UOW management took this regional property boom as an opportune time to sell three off-campus student housing facilities: Marketview, Weerona College and International House. Apparently, the move would 'release surplus assets onto the region’s buoyant property market in a move certain to benefit the local economy while strengthening the University’s

capacity to continue to respond to the financial challenges posed by the COVID-19 pandemic'. Management reversed their decision to sell International House in February, but appears set to proceed with the sale of Marketview and Weerona College.

This short episode reveals the contradictory position in which universities find themselves when it comes to housing and real estate: they stand to make large returns from rising property values but their students and staff – casualised workers in particular, who are much more likely to be renters – are finding it increasingly difficult, if not impossible, to find a home.

This is not a recent phenomenon, nor one limited to regional universities. Housing costs near universities in major cities have long been unaffordable for most students and many staff. High housing costs have forced students into sharehousing that is often overcrowded, precarious and highly exploitative. They have caused staff and students to live further from campus and thus spend more time commuting, with obvious impacts on wellbeing and, for students, attendance and participation.

Nor is UOW alone in selling properties in this moment of highly inflated asset values. In Sydney, the University of Sydney was reportedly selling at least 13 properties in late 2021, while UTS completed a three-building, $95m sale to student housing company Scape, and a $10m sale of student housing was part of UNSW’s recent sales.

University managers will argue that the proceeds of these sales help fund university operations, plugging the budget holes created by COVID-19. It is Commonwealth and State governments, of course, who are the main culprits to blame for the crisis of housing affordability in Australian cities and regions. Their woeful lack of investment in public housing, too-narrowly targeted rent assistance, total aversion to rent regulation, and broader encouragement of real estate investment through tax breaks like negative gearing, are the main issues.

Nevertheless, universities are wealthy institutions with large land holdings that could play an active role in improving housing affordability and quality. As it stands, they are simply devolving their budget deficits onto their students, staff and surrounding communities – raising revenue from rising property prices and gentrifying nearby neighbourhoods while their students and workers are forced to sacrifice more and more of their incomes to housing costs.

Universities could start by retaining existing student housing and renting it out at rates that are affordable for the average student, rather than rates that far exceed median rents – let alone affordable rates – for the neighbourhoods around their campuses. Universities could also convert their unused non-residential or vacant properties to affordable rental housing, manage it themselves or, better yet, hand the keys to student, staff or community co-operatives.

The co-operative model is also one that universities could help finance, as the University of Sydney did with the student housing co-operative Stucco in 1988. The University helped the student co-operative purchase this former glass factory where rooms now rent for $105 per week – less than half what a student might expect to pay in a privately-rented sharehouse, and less than a fifth of what they would pay to a student housing company a few blocks away.

University managers are unlikely to take such actions of their own volition; it’s up to university students and workers to demand it from them. And with high rates of casualisation and precarity bringing the interests of staff and students further into alignment, there’s no better time than now. •

Alistair Sisson is a Postdoctoral Research Fellow in the School of Geography and Sustainable Communities, UOW, and an NTEU member