The Board of Trustees was presented with a number of scenarios for the expansion of student housing at its Oct. 4 meeting.

The report, delivered by Chicago-based company Public Financial Management, outlined options for different approaches to building residential space for students.

 

The traditional approach

There is the traditional approach of a university-financed and operated on-campus housing facility.

This would integrate within the current housing system and residence life plans.

The approach was favored by students at the meeting, including Student Liaison to the Board, Benjamin Eveslage.

“The students want to feel part of campus when they come here,” he said. “It’s already difficult enough to make friends, but once on campus it’s much easier to have that community feeling through the housing department.”

 

Privatized housing

Under this option, a private investor would agree to fund the construction of the building in exchange for the right to manage and operate it for a period of time. When time is up, ownership would revert to the university.

Privatized housing built off-campus would have the least impact on credit, according to Roberts.

Mary Beth Snyder, vice president of student affairs and enrollment management, said this option wouldn’t necessarily work for OU.

“We want to expand and the demand for expansion is from freshmen and the lower division students at Oakland,” she said. “We are situated in an area which has never really developed a peripheral campus community like you see in so many other areas.”

 

The nonprofit option

The third option involves having the new housing facility be university owned and privately operated. This would help keep costs down because interest for nonprofits isn’t taxed at the federal level.

Snyder said this option would help keep debt costs down.

“The advantage there is that you get the interest rates and bonds at a lower rate,” she said. “Your debt service is lower under that condition.”

 

Lasting effects

Credit impact was a big concern among present board members.

Stephen Roberts, assistant vice president of finance, said he expected minimal credit impact for on-campus housing.

“If the housing is on campus, it would have some impact on our credit rating, but I think it would be minimal,” Roberts said. “If it’s on campus, people like Moody’s Credit Rating Services would consider us to be responsible for that regardless of who finances it.”

Credit rating affects the interest rate at which OU can borrow money.

Whichever choice the Board decides to go with, credit impact on the university isn’t expected to be a concern.

Roberts said OU is able to show financial institutions  housing is a self-sustaining project.

“If we show them a project like housing that is self-sustaining financially, then it doesn’t have nearly as much impact on our credit rating as it would if we were building a building that wasn’t paying for itself,” he said.

 

Holding on to students

One of Oakland’s goals is to improve retention and graduation rates. The report presented to the Board shows  both of these metrics will be boosted by the ready availability of student housing.

Students who live on campus have a more rounded college experience, according to Snyder.

“Students get more engaged in the university,” Snyder said. “They feel more a part of the community.”

Snyder reiterated the importance of OU’s goal to have 4,000 students living on campus by 2030.

“I want to see us realize a growth to the point of 4,000 students because I believe that that is the size of an on-campus community that will allow enough beds for freshmen to live on campus, will create much for student life on campus, (and) will lead to students being a part of a community that they want to be a member of and go on to be alumni of,” she said.