What should SUs do about the lack of student housing?

Jim is an Associate Editor at Wonkhe

As we’ve noted before, across a number of student cities there’s a major student housing crisis building – where rising demand from university expansion collides with reduced supply to generate tales of student homelessness, soaring rents and advice to students to not enrol.

I was thinking about this at this year’s fantastic UKCISA Fest, which brings together international student leaders from around the UK to discuss their experiences and create solutions to the issues they face.

Student housing was high on the list for discussion – and what’s fascinating is that the delegates present weren’t so much demanding caps on immigration as they were demanding that the UK becomes more honest about the costs of living here and the availability of student housing.

The classic question for policy makers in crises like this is whether you intervene to increase supply or reduce demand. The former tends to take time, and is made more difficult if you’re also considering regulating price or quality. The latter is controversial because it has knock-on impacts – which for students involve restricting access to the university of their choice.

So it’s fascinating that the University of Glasgow SRC (the university still has two students’ unions, one for social events and activities and the other centred on student representation) has come out swinging for a demand-side intervention.

The cap that fits

Under the headline “Cap Student Numbers Now!”, the SRC calls on the university to “commit to a cap on student numbers until 2027”.

It’s a call that is catnip for those who shudder at the idea of caps on student numbers – who are already arguing that it represents students “pulling up the ladder” by calling for restrictions on opportunities for younger siblings – even if in reality the debate in Glasgow is mainly about international recruitment.

But beneath the headline, the call is a little more subtle, given that the SRC says it will accept a gradual increase of a maximum of 1,200 students over the 5-year period.

It’s not clear if that’s in new students per year, overall student numbers or overall plus graduate route – even if numbers of new students are frozen, the university’s overall student numbers will likely grow naturally anyway given compound impacts, especially if we view those on the graduate route for the purposes of assessing infrastructure demand.

But in any event, all universities place limits on themselves on the number of students they recruit. What’s really going on here is a difference of opinion between the university and the SRC on where to draw that limit line over the next few years – a discussion about the pace of expansion and the extent to which student housing infrastructure should influence decisions about the number of students to recruit.

Slowing the pace

The SRC’s case is compelling. Over the last 5 years, it says that student numbers have increased by almost 40 per cent – more than double the growth rate of other universities across the UK, who on average have grown by approximately 16 per cent in the same period:

In particular, the past two academic sessions have seen most of this growth including over 8,600 additional students. This is not sustainable or acceptable.

And as a result, it says there have been impacts – a lack of capacity for in-person teaching and student societies, but more importantly students commuting long distances and some trapped in a cycle of couch surfing or even sleeping rough.

It’s a clever bit of campaigning – it’s eye-catching, and to some extent backs the university into a corner over the pace of expansion because neither of the usually available arguments against would work.

The university can’t say “We don’t support a cap because we’ve fixed the housing supply issue” unless that’s true. And “It’s not our problem if students have nowhere to live” would sound irresponsible, and would ignore the available evidence on mental health and academic attainment.

Feeling full

Back at UKCISA Fest, one of the questions raised by delegates was about who “decides” how many students to accept, and on what basis. I spoke to the student at lunchtime, and her perspective was fascinating:

I always wanted to study in the UK, but it wasn’t the only country I could have chosen, and it wasn’t here at any cost. I partly wanted to come because of reputation but it was also about quality of experience, cost and security for my family. If the quality slips, it becomes too expensive and I can’t get my children into the local school, the opportunity isn’t worth it.”

The SRC in Glasgow has a balanced position too – it’s not concerned with restricting opportunity per se, but is effectively arguing that sharp increases in student numbers where infrastructure growth doesn’t keep pace create false hopes of opportunity that turn out to be offering different and usually worse versions of what it is that students wanted to sign up.

As such, the interesting thing for me is that there has been a limit of sorts on student numbers in most universities – guided by the speed at which you can build lecture theatres, the speed at which you can recruit academic staff, and the available supply of “first year” guarantee UG beds.

In general, the market took care of bedspace need beyond that. But now, at least in Glasgow, that the market can’t, the argument is that student numbers limits needs to have overall bedspace supply in an area as a key factor.

Supplying a solution

In both the short and medium term, those who wish to maintain the idea of students studying away from home in several cities will need address supply. Many argue that reform to improve renters rights does the opposite – but arguing against safety, insulation standards or repairs regimes fees wrong. Others argue that asking developers to keep chunks of projects aside for affordable renting harms new build – although they would say that.

But if we argue that in the residential model, students need somewhere near, safe, warm and affordable to stay, price matters too. The big argument is always that rent controls harm supply – but that means that to protect opportunity for students, governments have to commit to underwrite the cost of increased rent in maintenance for home domiciled students and we have to be convinced that international students can afford the rent and are being given accurate information about it.

In a crisis, that kind of open-ended spending commitment for home domiciled students is unrealistic. In a competitive international market, clarity about rising rents would harm recruitment. And in an era of increasing inequality, we do have to have an eye on the way in which rent represents a wealth transfer from the lifetime earnings of graduates to the balance sheets and pension funds now – especially if it’s being directed facilitated by the loan scheme.

That causes reasonable people to consider rent controls. That call is also cat nip for a certain sort of free-marketeer, who almost always argue that the available evidence on rent controls suggest they don’t work because they do nothing to address supply.

The typology of rent controls in this paper from academics at the LSE finesses what is usually a simplistic and polarised debate.

  • First generation rent controls literally control rent levels. These restrict the level of rents across either the whole of the private rented sector, or a separable and defined element of it (like social housing). They find that they can lead to a significant fall in real rents if rents cannot be adjusted upward to offset inflation and increasing housing costs – but also generate incentives for landlords to leave the sector, especially if there are related but uncontrolled sectors such as owner-occupation, lodging or holiday lets. It’s where we are temporarily in Scotland right now.
  • Second generation rent controls involve the control of rent increases within and between tenancies, allowing some mitigation of cost increases for landlords and reducing the incentives for them to under-maintain their properties – while retaining limits on the size of rent increases to help tenants in markets typically characterised by shortage. This is broadly where the social housing sector is at in England and resembles the “off balance sheet” PBSA deals that universities have with partners – but are a problem when (for example) rent can rise by inflation but inflation suddenly rockets, as we have now.
  • Third generation rent controls see rent increases regulated within an individual tenancy but unregulated between tenancies – or at least regulated under a more generous regime. They protect long-term tenants from unexpectedly large increases and give landlords some security that cost increases are offset over the medium to long term, and so you can deliver lower rents by giving tenants better rights against unfair eviction. But they don’t work if you allow periodic, fixed-term student tenancies – because in a supply crisis where costs to landlords increase, those landlords simply increase their rent between tenancies. That’s happening now, and explains why landlords are so against the abolition of fixed term tenancies in the student bit of the private rented sector.

We do have to be slightly wary about the idea that price controls inhibit expansion. In England and Wales we have price controls on the fees that can be charged to home domiciled students in order to limit the financial exposure to both individuals and the taxpayer – but yet higher education has expanded for the whole of the decade that circa £9k max fees have been in place. You can, in other words, do price controls if you do enough to enable supply. But that’s a big if.

Taking a position

So if rent controls don’t work, and government shows no sign of making it easier to stimulate supply in a way that doesn’t involve poor safety, the mismatch between supply and demand remains. And that means you have to weigh tough policy choices:

  • You can maintain a focus on expanding opportunity, accepting that there will be compromises on the safety, quality and price of the opportunity while you work to increase housing supply. Some say this stops governments from using number caps to control spending. Others argue that doing this will never focus the minds of policy makers on housing supply and tends to normalise living in poor quality, far away and expensive housing.
  • You maintain a focus on the safety, quality and price of opportunity, accepting that there will be compromises on the expansion of opportunity while you work to increase housing supply. Some argue that doing so would give a green light to governments to damage access by using number caps. Others argue that access gains are pyrrhic if students don’t have anywhere to live.

Students’ unions have not, thus far, tended to get involved much in that debate. That’s a shame – it’s an important one, and getting students involved in it would be a great example of the way in which policy debate on campus can be profoundly educational. And it reminds us that for all the growth in SU strategic plans in the last decade, they’ve not so far really addressed the student interest – being more concerned with the long term development of the charity than issues facing students.

But this is not just about motions to union council or strategic plans. The fact that Glasgow SRC has taken a position on supply and demand in quite a dramatic way is an understandable response to a significant crisis that is having real impacts on their members. The strategic question is whether it’s too late for other SUs to intervene before student sofa surfing and homelessness becomes endemic right across the UK.

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