Read on Twitter
One reason college towns often have constrained supply is the logical interest group which would advocate for more supply, the super-dominant employer i.e. the university, operates a for-profit housing cluster (dorms) and thus has incentives to lobby *against* housing supply. https://twitter.com/_mylesjames_/status/1292108811222888448
Universities generally charge FAR in excess of market rate for housing, and they bundle housing with other things like mealplans, student services, support for residence staff, etc.
But they also earn a bunch of money off of student housing.
But they also earn a bunch of money off of student housing.
But in almost every school, non-freshmen have exit options: they *can* live off campus. Schools try to mitigate the expression of the exit option by competing on bundled services i.e. "unless you live in the dorms you can't get a mealplan and university cafes require meal cards"
And by advertising and supporting dorm-based community life, ensuring a large convenience-wedge, etc.
But also, from personal experience, private unis especially often lobby against measures to increase student-style housing nearby.
But also, from personal experience, private unis especially often lobby against measures to increase student-style housing nearby.
PARTICULARLY landowning urban universities often see their land as an asset to develop into dorms in the future and so they often strongly oppose dorm-competitive housing built nearby.
Yeah. But this is kind of my point: we should destroy the norm of college being an especially party-ish time. Force college kids to live under normal, neighborhood-based noise ordinances. Grow up, you immature coddled manchildren! https://twitter.com/babarganesh/status/1292111987082776578
AND TURN THAT DARN MUSIC DOWN
Exactly! It's insanely costly! And that money largely goes to support a ballooning support staff who are also deeply embroiled in a toxic, liability-prone, and increasingly PR-disastrous culture war around the lifestyles and conduct of students! https://twitter.com/cameronmattis/status/1292113250600071168
Close the dorms. Fire all the people whose job is basically, "Provide students with life support that normal adults hire on an as-needed basis." Get out of your liability insurance.
One irritating thing is official higher ed data groups "tuition and fees" together, so it's hard to know "how much cost growth is room and board". You can look at changes in list price but that's not quite the same thing.
So, this is something I wonder about. The average private non-profit 4-year college is carrying $80 million in debt related to property, plant, and equipment. Are we *sure* that's gonna pencil out? https://twitter.com/CharlesFLehman/status/1292115313727807488
We know student enrollments are gonna take a huge hit over the next twenty years, and especially that a specific market which was deeply interested in residential environment quality and paying in cash (Chinese students) is gonna fall to EXTREMELY low levels.
I mean the best you can say about the shift towards more and more intensive management of student's lives and fancier and fancier dorms is it has been profit-neutral for universities on average.
The really wild thing to me is university profits basically were stable or even slightly declining during a period of MASSIVE growth in demand for their services and virtually ZERO new entrants for competition.
I get that they're nonprofits but it's just amazing to me the extent to which an epochal positive demand shock led to basically zero new entrants, relatively modest firm size increases, and also no major improvement in profitability.
It just all got dumped into expenses.
It just all got dumped into expenses.
Here's inflation-adjusted total expenses and total revenues per credit hour of instruction in these universities, just to be clear that there really has been a runup in costs and revenues.
Inflation-adjusted revenues per credit hour are up 24% since 2000-2002 average, while inflation-adjusted expenses are up 30%.
To be clear, this isn't driven by massively ballooning professorial salaries. "Instructional costs" make up only about a third of total costs, and they've actually fallen to historic lows in the latest data as a share, and fallen in real terms, while other costs are exploding.
The major growth in expenses is not that it got costlier to instruct people.
IT'S NOT BAUMOL'S COST DISEASE.
IT'S NOT BAUMOL'S COST DISEASE.
Baumol's cost disease is real and yes it is what is driving rising instructional costs per credit hour.
But other costs are rising even faster! And a big part of that cost is property, plant, and equipment, which may be Baumol-related but isn't what people mean by Baumol/edu.
But other costs are rising even faster! And a big part of that cost is property, plant, and equipment, which may be Baumol-related but isn't what people mean by Baumol/edu.
I have other work to do so ahve to cut this thread off here.
But folks. The reason college is expense is not that professors are overpaid or that we just can't find a way to teach affordably.
2/3 of their expenses are non-instructional and that category is rising WAY faster!
But folks. The reason college is expense is not that professors are overpaid or that we just can't find a way to teach affordably.
2/3 of their expenses are non-instructional and that category is rising WAY faster!
(My other hot take is doing a Mormon/Israel/Denmark style purposeful-gap-year between HS and uni would actually be a good norm to adopt)
(And yes I'm fusing together Mormon missionaries, Israeli conscription, and Danish have-fun-and travel as a unified phenomenon)
