Rate Pricing Strategies

Why was a new pricing strategy necessary?

A new pricing strategy was necessary, based on five guiding principles:

• Affordability: To provide campus-operated housing for students at rates that are at 20% below market value
• Predictability: To limit annual increases for students to 3% during their entire housing agreement
• Access: To increase housing availability and try to reduce time on the waitlist
• Choice: To provide a range of options and price points reflecting the variety of needs and financial constraints of graduate students
• Sustainability: To make sure that HDH is financially sustainable

Graduate and Family Housing Rate Presentation 2021 (pdf)

Graduate and Family Housing GPSA Presentation, November 15, 2021 (pdf)

Who is exempt from the one-time rate adjustment?

Those students who were admitted in Fall 2020, or earlier, will pay the current resident rent, with a 3% annual increase for the duration of their housing eligibility.

Why is HDH experiencing losses?

Fixed costs are largely driven by mortgages on residential buildings and HDH front-line staff salaries. The historically low graduate monthly charges have not covered expenses.

Can HDH take advantage of other sources of funding?

Housing operations across the University of California operate as self-sustaining, auxiliary enterprises, meaning the sole source of revenue is from monthly charges, and not from external sources such as tuition, grants, endowments or subsidies. In short, monthly charges from students are used to cover any and all housing costs. Subsidizing students with access to campus housing at the expense of those living off-campus would not be equitable.  The university invests core funds to support graduate students irrespective of where they live.

What UC Policies speak to auxiliaries needing to cover their costs?

BFB A-59 is a UC policy that speaks directly to this.

Does HDH seek additional sources of revenue?

Yes, this is an ongoing effort.  For example, HDH has received CARES funding to cover the cost of the isolation beds made available to support students through the pandemic. The university also received some CARES funding for emergency student grants, including graduate students with demonstrated exceptional needs. In addition, the university has been reforming graduate funding to make it more robust, predictable and equitable – and to improve our ability to recruit the best students. The Chancellor is also working with the California State Assembly to seek access to very low-cost financing for capital projects. The university is always actively seeking donors to support our graduate students.

Why did the university build new graduate housing and incur additional mortgage payments?

Creating the opportunity for students to live on campus was a thoughtful decision. The build-out of Mesa Nueva, Nuevo East and Nuevo West was done to address the needs of many students who applied to live on campus but could not get access because of the housing shortfall. Prior to Mesa Nueva opening, we had approximately 2,900 students living on campus and 4,000 graduate students on waitlists for housing. New housing developments on campus have enabled 5,300 students to live on campus, reducing their commute time and offering rates that are more favorable than the local market.

UC San Diego’s graduate housing rates are below those of UC San Francisco, UCLA and UC Berkeley, despite having newer units and the largest graduate and family housing inventory in the University of California system. Since 2017,  3,534 new beds have been added to the campus’s graduate housing inventory.

Why were monthly charges not set high enough to cover the expenses?

Mesa Nueva monthly charges were set below mortgage costs with the anticipation that the rest of the graduate housing portfolio would subsidize the development and meet the waitlist demand. This strategy did not support the additional development necessary to reduce the waitlist. HDH’s initial strategy was to gradually increase graduates' monthly charges over time to match expenses, but as this proposal was presented each year to the graduate housing advisory committee, there was opposition to increasing charges above inflation. The resulting structural deficit has required HDH to pivot to a new pricing strategy that meets two objectives: 1) Continue to offer graduate housing priced below similar units in the market by 20% (or more); and 2) Progressively eliminate HDH deficits over the next 10-years.

If I am an existing housing agreement holder and I relocate, which rate will apply to me?

Students living in university-operated housing as of Fall 2021 can take advantage of the current rate structure plus an annual 3% increase in the new fiscal year.

What financial assistance is available through the campus?

UC San Diego has a Basic Needs Emergency Grant available to students who do not have sufficient funds for food or housing, lack employment or are experiencing any related issues. Students are asked to reach out to The Hub – Basic Needs and complete a Basic Needs Assistance Form.

Why are current students paying a different rental rate than students admitted later?

Implementation of the one-time rate adjustment began on October 1, 2021, to ensure that all of the Fall 2021 students are exempt from the one-time charge adjustment, and would pay the current monthly charges then with a 3% annual increase for the duration of their housing eligibility. This will allow for a more predictable housing rate for both current and incoming students as they plan their budget for graduate studies.