Student housing is tight. A California plan wants $5 billion for affordable beds

Student housing in California is already tight and the state has big plans to expand enrollment at the University of California and the Cal States. A $5 billion proposal would give campuses loans at no interest to expand their housing stock.

The University of California housed more students than the system officially had room for last fall. Yet UC leaders, lawmakers and the governor all want to dramatically expand student enrollment.

Students will need somewhere to live and a new legislative plan would throw in $5 billion to help the state’s campuses ramp up their housing stock.

Assembly Bill 1602 by Assemblymember Kevin McCarty, a Democrat from Sacramento, would create a $5 billion fund that would lend money, interest-free, to public colleges and universities seeking to expand their supply of affordable housing.

That much money could house around 21,000 more students, based on recent analyses that show campuses spend an average of roughly $240,000 per student bed when constructing housing. But even that may not meet the total need given how many students struggle with housing insecurity and homelessness.

The plan builds on a $2 billion grant for affordable student housing lawmakers approved last year, and signals the state’s increasing commitment to tackle all the costs students encounter in earning a degree. McCarty sees the loan program as a way to capitalize on another expected massive state budget surplus. Also, unlike financial aid programs that require annual funding, the state can help build housing once and allow a generation of students to reap the benefits, the thinking goes.

Campuses struggle to finance their housing projects so they can cover operating and debt repayment expenses while still being affordable to students, an analyst with the Legislative Analyst’s Office told lawmakers in November. Removing interest from the equation would allow campuses to pass more of the savings onto students, McCarty told CalMatters.

But the proposal faces a long road through the Legislature and currently doesn’t define what affordable units are, other than they should cost less than local market rates.

Under McCarty’s plan, the University of California, California State University, and to a smaller extent, the California Community Colleges, would tap into these funds swiftly, build more student homes, and then over a period of no more than 30 years use student rental income to repay what they borrowed – a revolving zero-interest loan. Then the state could lend another round of money for student housing as the coffers for this program replenish.

The loan would be managed by the State Treasurer. Campuses would be able to use funds to build new structures, demolish old ones and renovate existing dorms. McCarty wants the bill to pass in the next few months and go into effect immediately. The money would reach campuses mid-2023 at the earliest.

We have a college affordability crisis and we have a housing supply crisis, said McCarty. These two things are really acute right now in California.

  • California’s pledge to cover the tuition costs of low-income students at the UC, CSU and community colleges;
  • and another big program on the way to give UC and CSU added dollars to afford out-of-pocket expenses like housing, food and transportation.

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Student housing in California is already tight and the state has big plans to expand enrollment at the University of California and the Cal States. A $5 billion proposal would give campuses loans at no interest to expand their housing stock.

The University of California housed more students than the system officially had room for last fall. Yet UC leaders, lawmakers and the governor all want to dramatically expand student enrollment.

Students will need somewhere to live and a new legislative plan would throw in $5 billion to help the state’s campuses ramp up their housing stock.

Assembly Bill 1602 by Assemblymember Kevin McCarty, a Democrat from Sacramento, would create a $5 billion fund that would lend money, interest-free, to public colleges and universities seeking to expand their supply of affordable housing.

That much money could house around 21,000 more students, based on recent analyses that show campuses spend an average of roughly $240,000 per student bed when constructing housing. But even that may not meet the total need given how many students struggle with housing insecurity and homelessness.

The plan builds on a $2 billion grant for affordable student housing lawmakers approved last year, and signals the state’s increasing commitment to tackle all the costs students encounter in earning a degree. McCarty sees the loan program as a way to capitalize on another expected massive state budget surplus. Also, unlike financial aid programs that require annual funding, the state can help build housing once and allow a generation of students to reap the benefits, the thinking goes.

Campuses struggle to finance their housing projects so they can cover operating and debt repayment expenses while still being affordable to students, an analyst with the Legislative Analyst’s Office told lawmakers in November. Removing interest from the equation would payday loan and cash advance Idaho allow campuses to pass more of the savings onto students, McCarty told CalMatters.

But the proposal faces a long road through the Legislature and currently doesn’t define what affordable units are, other than they should cost less than local market rates.

Program details

Under McCarty’s plan, the University of California, California State University, and to a smaller extent, the California Community Colleges, would tap into these funds swiftly, build more student homes, and then over a period of no more than 30 years use student rental income to repay what they borrowed – a revolving zero-interest loan. Then the state could lend another round of money for student housing as the coffers for this program replenish.

The loan would be managed by the State Treasurer. Campuses would be able to use funds to build new structures, demolish old ones and renovate existing dorms. McCarty wants the bill to pass in the next few months and go into effect immediately. The money would reach campuses mid-2023 at the earliest.

We have a college affordability crisis and we have a housing supply crisis, said McCarty. These two things are really acute right now in California.

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  • California’s pledge to cover the tuition costs of low-income students at the UC, CSU and community colleges;
  • and another big program on the way to give UC and CSU added dollars to afford out-of-pocket expenses like housing, food and transportation.

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