Housing Rate Increase Prompted by Utility Costs
Undergraduates saw a 7 percent increase in housing rates for the 2007–2008 school year, and graduate students experienced a 3.5 percent increase in rates.
The sharp rise is because of projected hikes in utility costs, said Peter D. Cummings, director of financial planning and management. “There was an expected 22–25 percent increase in utilities,” said Cummings. Actual utility costs turned out to be lower than projections this year.
The biggest impetus for rising utility rates is natural gas prices since they are influenced by the world market, said Director of Housing Dennis Collins.
The process of deciding Housing’s budget and the rates students pay begins in the fall of the previous year. Recommendations are submitted to Dean for Student Life Larry G. Benedict and combined with other departments’ budgets. The rates are finalized by Housing in February or March based on feedback from the administration.
As Housing was deciding this year’s rate, the projected utility rate hike was so large that it was considered to be too burdensome for students. As a result, Housing raised rates by 7 percent and planned to run a deficit budget, said Collins.
According to Cummings, Housing has been operating a deficit budget for the past two years. Cummings said that Housing always has a reserve of money to use in case of emergencies, and for the past two years, that money has been used to balance the budget.
This year Housing had a “pleasant surprise” when the actual utility costs turned out to be lower than the projections, Cummings said.
The surplus money was used to add on projects, such as improving kitchens and bathrooms throughout the dormitories. Housing always aims to “improve student bases,” Collins said.
Housing payments also go toward maintenance of the dormitories. “There is a significant backlog in maintenance across campus … There would be a 40 percent increase in housing rates if the entire backlog were to be addressed today,” said Cummings.
Collins added that the Institute has recognized the backlog and independently funded some projects, such as replacing the windows in Tang Residence Hall and the elevators in the Eastgate Apartments in order to “avoid burdening today’s students.”
Deciding housing rates for graduate students is a bit more complicated. Cummings said that the graduate students’ stipends need to cover the rent increases. If the rent is increased, stipends must also increase. Housing also faces the external pressure of off-campus rates. If off-campus housing is cheaper than MIT housing, graduate students move off-campus, Housing receives less revenue, and the vacant rooms become rather costly. According to Cummings, Housing has initiated policies that make it easier for graduate students to live here and to choose their rooms. Cummings said, “Keeping rooms occupied is not a simple task.”