In 1994, the university’s two graduate student housing complexes (Graduate Gardens and Graduate Hills) were in a sorry state: aging, dilapidated and barely inhabitable. Local news stations reported the slum-like conditions. The facilities needed a massive infusion of cash for renovations and safety improvements, or they needed to be shut down.
The problem the university faced was a lack of money to invest. In a fateful decision that would lay the groundwork for much of today’s student housing, administrators transformed the properties into a joint venture with Southern Management Company.
The university retained land ownership, but SMC gained control over the complexes, management and rent collection, done free of local property taxes. They invested millions to upgrade the buildings and agreed to pay the university a set amount (30 percent) of ground rent.
Thus, public-private housing was born at the university. Today this partnership is the go-to model for new student housing projects, due in part to a lack of state funding, as well as the University System of Maryland’s bond rating, making financial officials reluctant to float the necessary funding bonds. It’s a great idea in theory, but the reality can be grittier.
The 35-year, renewable lease signed with SMC allows the university little control over the company as a landlord, and while good faith efforts are made every year by the Division of Student Affairs, rarely is SMC held accountable. Graduate Gardens and Graduate Hills are again run-down, lacking basic safety features, such as fire escapes and sufficient smoke detectors. Mid-lease rent increases and poor response to tenant concerns aggravate the situation.
Even though the ground rent revenue stream was promised to enhance the lives of tenants, spending it this way has been a recent phenomenon. Prior to the Division of Student Affairs assuming control of the revenue, the money went into the same pot as everything else and was used mainly to fund other construction around the campus.
The main flaw of the university’s public-private partnerships has been twofold: the profit motive of partners is often at odds with the university’s goal to take care of student residents, and initial safeguards to protect tenants often either prove insufficient or are forgotten over time. No one is asking private corporations to stop caring about profits, but we must drive a hard bargain in negotiating these deals to ensure that student concerns are paramount.
With East Campus on the horizon, the university is negotiating the biggest public-private partnership in its history and one of the largest recent development deals in the county. Such a partnership would allow the university to assume minimal risk and offer land usage to developers in exchange for bearing the financial burden (and later receiving a return on that investment through rent).
It is absolutely imperative the student community remain involved and vigilant in every step of this process. New graduate student housing will be a small part of this development, and despite repeated assurances it will be affordable, the current proposed subsidized rents would be $1,900/month for a two-bedroom unit – stratospheric even by D.C.-area standards.
Despite a year and a half of conversations with administrators and developers, it is clear their concept of “affordable” is nowhere near that of the average graduate student. But East Campus is not only about housing and will literally reshape downtown College Park. Unless we stay committed to reviewing every aspect and every decision, we will quickly lose even the vestige of control over the project’s outcome.
So, student leaders, stay alert. Remember the lessons of 1994. The people involved at the genesis of the project moved on, and commitments not written down were quickly forgotten. As soon as the advocates are out of the picture, the hard bargains tend to disappear into bureaucracy. Every party to these deals has a different agenda, and if you want your issues to really matter, you have to be willing to put in the hard work to keep them on the table.
Laura Moore is the president of the Graduate Student Government and Devin Ellis is the chief of staff of the GSG. They can be reached at lauracat@umd.edu and ellis.devin@gmail.com.
