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It has been no secret that UCSD has a shortage of space, both for housing and parking. The La Jolla Campus currently hosts 13678 parking spaces and 22060 beds (after the completion of Pepper Canyon West). Which combined are still less than the currently 41065 students enrolled in UCSD (according to 3rd Week Enrolment by UCSD IR department). To make this equation work, there must be students that are forced to take public transit or somehow get to school without occupying a parking space.
This should not be a challenge, as students can live around the campus and have a (somewhat) good transit network surrounding the campus to commute. However, when the housing cost kept rising, off-campus housing became more and more unobtainable, and most stakeholders in UCSD agreed on the necessity for facilitating such a concern by building more on-campus housing. As a result, UCSD currently boosted one of the nation’s most extensive university housing inventories.
Though many see the building spree as a triumph for students’ housing solution, not many people recognize that there are many drawbacks to it. For one, limited land resource creates a conflict between land uses to house academic activities and the student population. When a student dorm was built, it is likely that an academic facility could not be built because of it.
Credit: Faculty Workgroup on Budget Priorities research
Even more important than the space problem is the capital cost involved in building these facilities. The alarming rate of increase in debt means that the way and the pace that these capital projects may not be sustainable and should rethink upon. The [Faculty Workgroup on Budget Priorities] (https://sites.google.com/ucsd.edu/budgetcuts/debt?authuser=0) research shows from 2012–2019, there was a staggering 183% of long-term debt growth during that period which transformed UCSD from one of the smallest debt-load campuses with the most outstanding long-term debt among all UC campuses.
Furthermore, since 2019, the debt has further risen by 15% to over 4.3 billion in 2022. For reference, in 2022, UCSD only generated 7.5 billion dollars of revenue and has 11 billion dollars of assets. This means the university’s long-term debt is at over half its annual revenue and over 35% of its assets. Not to mention that the university has been recording continuous deficits since 2016 (even when factoring in non-operating revenue sources). Only in 2022, when there was a massive influx of direct government grants, helped change the tide.
The New Pepper Canyon West Residential Halls, one of the many new capital projects that UCSD has taken on in recent years
The scale of the debt could also be felt in the campus interest payments. Chancellor Khosla himself, when finding State support zero interest rate capital funding, pointed out that every $100 million borrow equals to a cost of 2.1 million dollars of interest. This means that the 4 billion long-term debt would result in 81 million dollars of interest payments annually. With the increasing interest rates today, albeit a mere 2% of the entire budget, the current financial schedule showed UCSD was paying 169 million in interest alone in 2022, double his estimate a year ago. As a reference, according to the Capital Budget Plan in UCOP, we only need 365 million dollars to build the two towers of the Pepper Canyon West Residential Halls. This means that interest paid every year equals one 23-story residential hall tower.
This capital cost not only results in high-interest costs that would need to repay in the yearly budget. It will also result in what Cummins, the former UCB vice chancellor, predicted for the financial outlook for the Berkeley campus during the funding for the new stadium –
Nuevo East — one of the new shiny graduate housing that has been affected by a large rent increase in the past year
In fact, we already see such an effect happening. Since UCSD uses its auxiliary enterprise revenue to issue bonds for capital projects, due to the downturn during the pandemic, HDH has already been forced to raise a rate of over 80% to graduate housing.
UCLA’s Laurel, Palo Verde, and Tipuana apartments
I agree that there is certainly a challenging housing need to accommodate. However, there are more ways that the school could address such, rather than focusing on a building plan, especially when it averages roughly $280769/bed (assuming the New Pepper Canyon rooms are single occupancy as advertised). This cost double per bed of UCLA’s Laurel, Palo Verde, and Tipuana apartments.
When a satellite campus appears on transit corridors, it becomes an anchor of ridership, boosting regional connectivity.
With the extension of the Blue Line trolley, there was high expectation that it would allow students to live in places that they weren’t able to live before due to constraining on travel mode. The stark reality is that the surroundings of the extension do not have enough housing resources, to allow further support for students, as it is aligned in between a freeway and single-family homes.
Drastic changes and decisions must be made to solve this issue, and not a single solution alone would be Panacea for the housing crisis. One of the solutions could be an increase in parking availability, which would allow students to afford the commute to lower rent better. Another solution that would be possible is for the university should try to build from satellite campuses, which would allow a generally less density required as the land is cheaper. A satellite campus would also be able to improve regional connectivity and climate goals further, as it opens transportation options in car-dependent regions.
Rendering of the new Triton Center
The University announced that it would spend 1.1 billion of capital investment to build more dorms and a brand new Triton Center. If the tide changes, does our campus have enough reserve for the cold, brutal winter? I believe this is a question that all stakeholders should think deeply about.