Eastern Michigan University leases housing to private company in exchange for renovations
Eastern Michigan University will give up student housing fees to two private companies for the next 35 years.
The university is passing the revenue from student housing to EMU Campus Living LLC and Gilbane Development Company in exchange for two new residence halls, demolition of older units, and the renovation of all remaining residence halls except one that was recently renovated.
EMU’s Board of Regents approved the leasing of the campus housing system to EMU Campus Living, LLC. Under the agreement, the company will design, build, renovate, maintain, improve, and operate most aspects of the buildings in the University’s housing system. Gilbane Development Company was selected as EMU’s student housing system operations partner in December 2021.
“We're really excited about what these residence halls will bring to the campus community in terms of state of the art, Wi-Fi capabilities, air conditioning, and room design layouts that really meet the needs of the students,” said university spokesperson Melissa Thrasher.
The university will retain student-facing services such as residence life, information technology, residency assignments, billing and collections services, marketing, and managing compliance with housing agreements, according to a statement.
Housing rates will be approved by both the university and the two companies.
Any housing rate increases "greater of 3.4% or the Consumer Price Index (but not to exceed 6.8%) requires approval by the University," according to an EMU news release.
Construction is slated to begin this summer. Design work has been underway for several months.
The full agreement is not yet available, according to Thrasher.
The project, called “Welcome Home 2025,” will include the construction of an approximately 400-bed apartment-style residence hall next to the Student Center. Current apartments near the university’s athletics complex will be demolished to make room for a new residence hall with about 300 beds.
All other residence halls — aside from Wise Hall which was renovated in 2017 — will be renovated to include improved Wi-Fi, air conditioning, and new designs and layouts.
According to the news release, the university also engaged with the Student Government, University Budget Council, and Faculty Senate for feedback on the project.
The Faculty Senate was particularly critical. In December, the faculty voted no-confidence on EMU President James Smith. This was partly over what was perceived as a push to privatize residence halls.
“By privatizing what we think is one of the more key aspects of university life, we're concerned that having a for-profit motive in the relationship between the university and the students is problematic for the students in terms of costs and any types of charges, damage fees, things like that they may incur moving into the future,” said Robert Carpenter, Chair of the Faculty Senate Budget and Resource Committee and member of the University Budget Committee.
EMU has maintained that this is not a move to privatize housing.
“I want to make clear that the University has never considered privatizing student housing,” Smith said in a December statement. “Under this plan, Eastern is working with an experienced team of partners who would provide the financing, construction and operational expertise for new and renovated housing facilities.”
Carpenter also said the university needs to find revenue sources that are stable and are able to offset fluctuations in student enrollment.
“By privatizing one of those revenue streams, we have a real concern about the financial viability of the future of the university,” Carpenter said.
The university already has public-private partnerships for both parking and dining, and students, staff and faculty have debated the issue for years.
Carpenter referenced negative experiences with the parking contract and said he was concerned housing could hold similar pitfalls. Former Student Body President Luis Romero and the rest of the student government has been bringing concerns over public-private agreements to the administration since 2019.
“At the end of the day, I couldn't completely change their mind,” Romero said. “And with something this massive, they were still going to do what they wanted to, but I wanted to make sure the deal was as best as possible to help address student needs. … I do think we were able to get some headway with the administration.”
The main concerns Romero brought to the administration were housing rates, unfair monetary penalties and retaining control over the student-facing services such as appeals processes, room assignments and billing. The university said it will maintain control over those services.
Correction: The headline has been updated to reflect that the university’s campus housing system is being leased to EMU Campus Living, LLC. An earlier headline said it was leased to both private companies.