The Living Learning Center, slated to open in fall 2006, is hailed by University officials as an innovative and long-overdue addition to the University campus, especially with the residence halls ranked No. 1 on the Princeton Review’s 2004 list of “dorms like dungeons.”
But officials are aware that the addition does nothing to improve the 50-year-old residence halls already in existence, and they say financial problems continue to hinder University Housing. Many questions exist among past and present University officials about the state of housing finances over the years and the fairness of the administration’s policies toward the housing department.
Interviews regarding land repayment polices within the University and the housing department’s financial obligations reveal differing opinions about how student housing money has been used to quell the ongoing financial problems that threaten Oregon universities.
Financial factors
Former University Housing Director Marge Ramey said the University seems to view student housing as a “stationary cash cow.”
Ramey served as director from 1983-91 and said during that time the University used student housing money to fund land acquisitions that benefited the entire University as well as a variety of other projects unrelated to student housing.
University Housing is required to pay hundreds of thousands of dollars each year in indirect overhead assessment charges that go into a general fund for the University, something to which auxiliary enterprises like parking also contribute.
Ramey said one major difference in University Housing now that she’s retired is the presence of that indirect overhead assessment. Ramey said the University asked her to pay the assessment during her final years with housing but she “objected to that absolutely strenuously.”
“I felt very strongly that to try to attack the students simply because they lived in the University housing was very unfair,” Ramey said.
When the assessment was added in 1991, the first year University Housing Director Mike Eyster took over, Ramey said “the
money had to go on to (students’) increased board and room because there’s no other
income in (housing),” meaning fees in the residence halls had to increase if extra
financial obligations were tacked on like
the indirect overhead assessment.
University Vice President for Administration Dan Williams, who will retire July 1, said he bristles at the thought that housing has been somehow treated unfairly over the years and said the administration’s policies toward housing are no different than every other university across the country, specifically with the indirect overhead assessment.
“We put into practice a policy that’s very common at other institutions, and that is to recover your institutional overhead costs from your auxiliary enterprises,” Williams said.
Since its inception in 1991, the indirect overhead assessment has cost housing more than $250,000 annually, and the payment amount has increased every year.
University Housing is also required to make payments toward residence hall debt for every university within the Oregon University System. The debt fund is known as the consolidated debt pool.

The cost of construction and renovation of residence halls goes into an OUS fund that each university pays into based on its average residence hall occupancy rate.
Thus, debt payment is based on student population rather than the actual amount of debt a particular institution generates, making it possible for smaller universities within OUS to build residence halls.
The debt pool was capped in 1997, but University Housing will continue making payments through 2027, meaning housing is still paying debt on residence halls that are more than 50 years old. For the debt pool to be capped, each university had to agree to pay OUS an additional $20 per occupant that goes into an emergency reserve fund.
Structural changes
Former University Housing Director H.P. Barnhart, namesake of the H.P. Barnhart residence hall complex, worked in housing from 1949-79 and said his duties didn’t pose any problems to the residence halls’ financial state at the time.
“I know I had a boss who told me ‘hey, you have to please the students, you have to pay your expenses, and you have to be able to pay the bonds and if you do that, why, you’ll have a job,’” Barnhart said. “So that was the way it was operated.”
Barnhart said the consolidated debt pool was something he “squawked about” upon its inception, but because it served to provide residence halls for universities that couldn’t afford to independently finance them, housing officials eventually accepted it.
Neither Ramey nor Barnhart said they encountered financial difficulty from the consolidated debt pool, something Eyster and Williams attributed to the pool’s role as a revenue-generating device before renovation become a dire need for the University.
If the debt pool is used to build new residence halls rather than renovate them, the system is gaining more revenue, but University officials said if it’s used for renovation it only increases the amount of debt while occupancy remains the same.
“During (Barnhart’s) years the consolidated debt pool was used to add beds across the system, and when you’re adding beds you’re
generating revenue to pay off the debt,” Eyster said, “but in recent years, the debt pool was used more to renovate existing beds, which didn’t generate any revenue.”
Williams said it became clear to him and Eyster several years ago that “we were headed for disaster if you increased your body denseness without increasing your revenue, and that’s exactly what happened.” They worked with OUS to get the pool capped as soon as possible, Williams said.
“The consolidated debt pool principle is a very sensible thing to do, but once it started being used for modernization, then it began to place a burden on other institutions,” Williams said.
Eyster said he agrees with the consolidated debt pool’s founding principle, but said he questions the fairness of requiring University Housing to pay into the pool through 2027 at a rate based on occupancy rather than the amount of debt acquired, particularly when residence halls are in such poor condition.
If the $20 per occupant fee did not have to be paid into the emergency reserve fund, Eyster said, the money could be put to use immediately to help renovate the direly outdated halls.
“We’re at the point where if I want to build another building I can’t raise the rates sufficiently to do that, or I believe I start to affect enrollment at the University and occupancy in the residence halls,” Eyster said. “It won’t do us any good to have new residence halls if nobody can afford to live in them, the rates are so high.”
Eyster said while the Living Learning Center will be a cherished addition to the housing inventory, it doesn’t do anything to improve the condition of buildings already in existence. A reduction in payments to the consolidated debt pool or monetary compensation for the slew of land acquisitions student housing money ha
s financed over the years would, Eyster said.
Williams served as director of housing from 1981-83 and said he understands auxiliary enterprises and the financial hardships they often face.
“Having worked on both sides of the issue, I’m very sympathetic for the responsibilities and challenges our auxiliary directors have, yet there are times, because they are part of the University, they have to make som
e compromises,” Williams said.
Land acquisition arm
Past and present housing officials say housing’s role as the real estate acquisition arm of the University has put it in a financial situation that makes updating the residence halls very difficult and requires compensation.
University officials say they are not legally obligated to provide or even capable of giving such compensation.
Barnhart said the University’s use of student housing fees never seemed unfair during his time with housing but said compensation for land bought with student money then converted to other purposes is only fair.
“I suppose you can justify a lot of it. … The University needed the expansion room so maybe it really wasn’t completely unfair to attack some of the University auxiliaries,” Barnhart said. “That doesn’t mean they shouldn’t be compensated justly for any land.”
Ramey said Barnhart left housing in a solid financial state that made payment into the consolidated debt pool and upkeep of the east campus houses possible.
Ramey said she sees the presence of the indirect overhead assessment as the biggest problem with the University’s policies toward housing. She said another pressing problem is the administration’s tendency to see housing as a land acquisition arm that requires no monetary compensation when property purchased with student fees is used for other purposes.
Ramey said this issue is exemplified in the University’s refusal to compensate housing for money spent on the Riverfront Research Park property. Three parcels of land purchased with housing fees in the 1960s were converted to be used for the Riverfront Research Park in the 1980s (ODE March 30, “University Land Repayment Plans Questioned”). A compensation plan was worked out but has been revised after the University’s legal counsel ruled no financial compensation was legally mandated. Eyster has written about the ruling in the University Housing annual reports for several years.
“Although the east campus property was purchased with funds generated by students living in University Housing, it is unclear whether or not University Housing funds will be reimbursed any of the purchase price for this property as it is developed for other university uses,” Eyster wrote in the 2003-04 annual report, published April 11.
Eyster said the fact that the value of the Riverfront Research Park property will not be repaid to housing is an example of what’s happening with the east campus properties acquired through housing funds that may be used for other University purposes.
The group of administrators charged with handling the transition of management in the east campus neighborhood has not decided whether monetary compensation will be given to housing. Eyster said the legal ruling is a sign that continuing to pay for upkeep of non-student housing properties may not be the best use of student housing money.
Most of the homes in the neighborhood are vintage homes; one has been empty for about two years because of the presence of peeling lead paint. Eyster said it is too costly to fix the house using student money if there’s no assurance it will be repaid when the property is converted to a different use.
“It changes the way in which we manage the property,” Eyster said. “If I abate the lead paint for $20,000 there’s no way that I can assure to my clientele, students, that their money has been well spent because within a month of abating that lead paint this building might be converted to use for some other purpose, and the students in housing who paid for that would get no reimbursement for that 10-year
investment or 20-year investment.”
Williams said he doesn’t feel housing has been victimized by being charged with the management of houses and said important issues, such as how the property will be managed in the future, are being worked out administratively.
Williams said just because property was purchased with housing funds for housing purposes does not mean the University can’t use it for something else if necessary.
“I don’t think that’s an intention put into concrete, I mean, clearly, at least in my 20 years here, we always knew that was the University’s inventory of land to grow, not necessarily solely for residencies,” Williams said.
Eyster said monetary compensation for the east campus properties and the Riverfront Research Park land would not be such a pressing issue if housing’s financial state was better and the residence halls weren’t gracing the top ranks of the Princeton Review’s “dorms like dungeons.”
Williams said housing has benefited immensely from the east campus properties and questioned the need to repay housing for land from which it has possibly drawn revenue over the years.
“I suspect over time the department collected more revenue than the houses initially cost,” Williams said. “They set their rental rates at a level that covered their costs. Those houses have been paid for years ago.”
Eyster said the cost of maintaining vintage homes is high enough that some residence halls fees were used in the east campus neighborhood, making it all the more necessary that housing be compensated if the properties are converted to other uses.
“Benefits that are for the purpose of the entire University ought to be paid for by the entire University, not a select group of students in the residence halls,” Eyster said. “I would view the goal of expanding the University’s boundaries to be a valid goal for the University to have. The question I would have is: Is it appropriate for that goal to be financed by 20 percent of the student body?”
Barnhart said power politics is a huge part of issues such as rededication and land repayment.
“You’ve got to look at it from the University standpoint — who’s calling the shots at the University,” Barnhart said.
Eyster said Barnhart will always be hailed as an outstanding steward for the students in housing but that times were different back then and he did not have the ability to speak out against policies and decisions in the name of protecting student money.
“I don’t think (Barnhart) had the ability to say ‘well, should residence hall students be buying land for future University expansion, is that an appropriate use of housing money?’” Eyster said.
Eyster said the administration has been working well and is obviously attuned to the spirit of collaboration and fairness. He said his main concern lies in financial compensation for the properties that were paid for with student housing money but have been or will soon be used for purposes unrelated to student housing.
“I’m saying to the University, the larger campus, I can no longer have students pay for your land bank,” Eyster said. “If you want this property, the University really needs to take it over and manage it.”

[email protected]