The University of British Columbia Board of Governors is considering a proposal from UBC for the creation of a new government business enterprise (GBE) to address unprecedented demand for on-campus student housing in Vancouver and Kelowna.
UBC students on both campuses are increasingly challenged by the high cost of off-campus housing and long commute times. Demand for on-campus student housing continues to outstrip supply by a wide margin. Despite growth of over 3,500 beds since 2011, each summer there are about 6,200 students waitlisted for on-campus housing. UBC faces an urgent need to fund additional supply to meet growing demand. It aims to add at least 6,300 new beds in the next ten years, for a total of 20,000 by 2028.
As a public-sector organization, UBC’s ability to borrow is restricted due to constrained government debt capacity. The B.C. government and UBC have explored alternate student housing borrowing options for more than 10 years to facilitate growth. The UBC Board of Governors is considering a proposal from UBC for the creation of a new Government Business Enterprise (GBE), named UBC Hospitality Trust (HOST), to enable borrowing at more favourable rates and accelerate student residence construction. To be clear, UBC would not be outsourcing or privatizing its student housing operations. HOST would be owned by UBC, deliver service solely to UBC, and would act on behalf of UBC. It would take on responsibility for the management of operations, assets and existing/future debts in Student Housing, Food Services, and Conferences & Accommodation at both UBC Vancouver and Okanagan campuses. These entities qualify collectively as a GBE because they are university-owned enterprises that are financially self-sustaining from non-government sources.
In addition to greater borrowing flexibility, key benefits would include freeing up borrowing capacity for other UBC priorities on both campuses, and enhancing governance through the expertise of a HOST Board of Directors. Pricing principles for on-campus student housing would continue to include providing rents at or below rental housing market prices.
HOST would aim to continuously improve student academic and social success by promoting safe and secure communities where diversity and wellbeing are explicitly valued. It would practice prudent fiscal and asset management while also maintaining high standards and attaining future growth. It is hoped that the proposal can return to the Board of Governors in the fall of 2018 for final approval, with potential establishment of the GBE in April of 2019.
“We know the off-campus housing market is challenging in Vancouver and in Kelowna. High costs and long commutes are an unfortunate reality. On-campus housing improves the student experience so we’re excited to be exploring this unique method of providing more student housing.” —Louise Cowin, Vice President of Students, UBC
“We anticipate that the growth in residence spaces under HOST will lead to the creation of hundreds of new jobs, including Residence Life positions for students. We also anticipate that additional on-campus housing will help to ease some of the pressure on the off-campus rental market.” —Andrew Parr, Managing Director, Student Housing and Hospitality Services
“There is an overwhelming need for additional student housing. This proposal not only allows UBC to build additional student housing, but to also provide greater value to residents by reinvesting more directly back into the student experience.” —Kevin Doering, UBC Board of Governors, AMS Board of Directors, fourth-year UBC honours Economics student
A HOST of Potential Benefits
- Enhanced student experience:
- More beds
- Shorter commute times
- More access to all benefits of living in residence.
- Improved financing for future student residences.
- Enhanced governance appropriate to the size and importance of the business.
- Separation of core academic and non-academic operations.
- Improved clarity of financial reporting.
- Improved UBC financial borrowing capacity.
- Less pressure on off-campus market housing.
- Job growth and opportunities.
Presentation to UBC’s Board of Governors
On Friday, April 13, 2018, UBC presented the HOST GBE proposal to UBC’s Board of Governors.