silhouette in between library shelves with books

Who Pays the Price? Tariff Hikes at ANU Halls

One hour before a student forum hosted by the IHC regarding rent increases for 2021, ANU’s proposed options for tariffs landed in our inboxes. Under option 1, a standardised 6.7% rent increase on 2020 prices. Under option 2, a supposed ‘alignment’ of price to room and residence amenities, which would see some rooms dramatically increasing in price. Amongst the halls mandating a higher price point are Ursula and Burton & Garran Hall, which are supposedly ‘affordable’ options for on-campus accommodation, and Wamburun and Bruce Hall, who are currently operating with few (if any) senior administrative staff positions filled. 

Neither of these options are defensible under the conditions they have arisen. It is regrettable and unacceptable that the ANU would lock itself into a concession agreement that prevents change and forces up the price of living on campus whilst simultaneously championing the importance of a diverse student population. The ANU PBSA agreement is one of the biggest blunders the University has made in its residential space and it will have lasting consequences for the student population.

Purpose Built Student Accommodation (PBSA) is a growing sector in the Australian economy, with investment agreements popping up at universities across the nation. At the ANU, a concession agreement (the ANU PBSA agreement) was put in place over 9 residences for a period of 30 years. The agreement is provided for investment by third party companies in the residences in exchange for a large upfront payment to the ANU. Our understanding is that a huge portion of this payment was used to fund the construction of Kambri and new residences, while allowing ANU to maintain ownership and management of the Halls. Initial statements about the PBSA Agreement outlined what a profitable and huge portfolio the ANU Halls were for the investors. Brian Schmidt also acknowledged in 2016 that increases in room rental charges must be “limited to CPI, maintained at or below 75% of market rates and subject to five yearly reviews where tariffs will be benchmarked to market rates”. 

While the agreement has allowed for the construction of new facilities and buildings for students, it has three primary flaws. Firstly, it relies upon consistent student occupancy and rental revenues. As such, it is incredibly inflexible when emergencies such as COVID-19 arise and prevent students from moving in or force them to move out. 

Secondly, it will involve consistent high rental increases. While at face value, the ANU’s PBSA agreement seems to have measures in place to prevent such increases, this is not the case. The ANU has refused to define the parameters by which the ‘75%’ of market rates’ limit is measured. The types of residences being referred to as the ‘market’ are yet to be defined. Furthermore, how ‘current’ the market rates being considered actually are remains questionable, with the  price evaluation only mandated to occur once every five years. In comparison to rates next year, 6.7% is wildly above the benchmark set by the PBSA. However, by widening the scope of consideration to be 2018-2021, as was done at the IHC’s student forum, the University is able to justify what is an unacceptable step out of line with market rates due to smaller increases in previous years. Using a four year period as a frame of reference, prices at ANU are similar to net market increase despite this sharp tariff hike. Hence, price spikes like this one are able to occur due to ineffective accountability measures built into the agreement which prevent such drastic tariff increases. 

Thirdly, it is inherently wrong for the ANU to have entered into such an agreement without student consultation, especially where that agreement creates external obligations which students must fulfil through ever-climbing rental rates. As exemplified by Brian Schmidt’s updates in 2016, the Uni was fully aware of student concern for a repeat of the 2014 rent spikes when the ANU PBSA agreement was signed. Despite this, the ANU proceeded to lock rent in a lease agreement spanning decades, and now use the agreement’s binding nature as a justification for huge spikes now being proposed. This lack of student-guided action and refusal to take responsibility for the havoc they have wreaked in residential communities is insulting.

The reasons given to explain the 6.7% calculation have also been manifestly insufficient to justify the stress and inconvenience the tariff rise will cause the student population. Especially in line with commitments to greater transparency the ANU made after the Do Better ANU movement in 2019. Justifying rent increases with claims of ‘renewals’ to be conducted at colleges and an insistence that the funds are contributing to optimising the student experience are nothing more than an attempt to save face. 

Firstly, it is difficult to believe arguments that rent hikes are primarily to recover the costs of running residential halls and to cover renewal of their infrastructure. A more comprehensive breakdown of what portion of our tariffs actually contribute to maintenance and facility upgrades is needed. We have no material proof at present that these excessive spikes are actually in response to scheduled maintenance plans rather than to generate profit for third-party stakeholders. 

Secondly, several halls— despite their rent supposedly contributing to this pool of money— have not seen any such improvements in their facilities. This is certainly not due to a lack of amenities that need upgrading; older halls such as Ursula and Burton & Garran have remained stagnant despite claims of campus modernisation, with key utilities like water and heating in dire need of renovation. To charge more for facilities that are far from optimal under claims of bettering the student experience is counterintuitive. 

We argue the tariff increases and the PBSA Agreement will have disastrous consequences for what our Halls look like in years to come. Both B&G and Ursula Hall pride ourselves on our diversity. While Ursies attracts students from regional and rural backgrounds as the cheapest catered option, B&G’s affordability has brought in students from across the globe. B&G is also one of few accommodation options on campus which cater to those from low SES backgrounds. A rise of 6.7% or higher is simply out of the question for many students residing on campus. In our communities, this has been starkly felt. The announcement of 2021 tariffs was followed immediately by outrage and unease. We  hate to imagine a future in which the ANU runs 9 homogenous communities home only to wealthy young people from Sydney’s North Shore. This future is also entirely inconsistent with the one ANU promotes itself as wanting. It claims that it values a diverse and inclusive student community— yet the PBSA agreement and its associated tariff increases say otherwise. 

Tariff increases will also mean that residents stay for shorter periods in their Halls. Already, the conversation around return in 2021 has shifted; whereas the choice to return is usually, for many, a consideration of potentially filling a leadership role in 2021 or feeling fulfilled in their collegiate experience. There now arises anxiety as to whether their decision is actually determined by themselves, or by their wallets. For rent to increase at such a rate that the disparity between two consecutive years necessitates many students being unable to stay without financial assistance is alarming. In a year when encouraging a high returner rate is necessary for ensuring the preservation of hall culture, these tariffs represent the antithesis of student desires.

Similarly disgraceful is the timing of this spike in tariffs. Coming out of a global pandemic and entering into a recession—both of which will have impacted a significant portion of students living on campus, financially and otherwise—this increase is immoral and indicative of the ANU’s priorities in their management of corporate interests and commitment to students. 

When these concerns have been raised by members of residential communities, the only meaningful response received has been a proposal to offer more scholarships. The IHC is yet to receive further information about what these scholarships might look like, who they would go to and whether they are in fact financially viable in the climate the University currently finds itself in. Until we have such information, it is hard to feel at ease with the PBSA Agreement and its resulting spikes in rent. 

We acknowledge that the PBSA agreement is a binding legal agreement. However, we are confident that there are ways we can work within its bounds to maintain and improve the value of our residential communities. As such, IHC has formulated the following series of demands in relation to the PBSA agreement and the tariff increases: 

  • Provision of the research and consultation done in 2016 for the PBSA’s implementation
  • A commitment from the ANU to include the IHC and other student leaders in conversations surrounding future rent agreements for our halls
  • Release of the data and calculations used to reach a 6.7% increase for 2021
  • Release of all planned tariff increases for the remainder of the PBSA, along with detailed calculations of those increases
  • Consultation on the raffle of a Bruce Hall room with the Bruce Hall community
  • A model of a plan to maintain meaningful diversity in every hall
  • A commitment to making on-campus accommodation more accessible to students from low-SES backgrounds. Putting in place more measures to allow these students to live on campus beyond the standard bursaries already offered
  • The creation of specific objectives in regards to encouraging and assisting low-SES prospective residents
  • A commitment that returning residents should have the option to be able to return to their residential hall if their returners application were to be accepted, without having to be priced out of their accommodation in later years
  • A calculation as to what the ANU considers to be 75% of the Canberra rental market

We hope the ANU can see the worth in having a broad range of voices echo through the B&G kitchen. We hope they can see the worth in having students from a spectrum of backgrounds wandering our campus in green Ursies rugby jumpers. We hope that they understand that you can’t put a dollar figure on what these losses will mean for our communities and we hope that they will buy into action which seeks to protect what is sacred to so many students from across the globe. We hope they are listening when we pose the question: who pays the price? 

 

Sanjana Ramesh Kumar is the president of Ursula Hall and Meghan Malone is the president of  Burton and Garran Hall. Malone is also running for General Secretary in the 2020 ANUSA elections.

The authors would like to credit their communities for their thoughts and passions on this topic, particularly Joshua Yeend from B&G. Similarly, they would like to acknowledge the hard work of the other IHC members in this space and thank them for highlighting the experience of their communities.

 

 

 

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