University of Iowa representatives voted for graduate housing rent increases

UI Officials expected minimal transfer from old apartments to new

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IOWA CITY — When the company charged with constructing and managing the University of Iowa’s new graduate student housing recently proposed increasing rent, UI officials said they expressed concern.

But no record of that concern was made in minutes from a September meeting of the committee charged with governing the Aspire at West Campus apartments. And the university’s two voting members on the committee backed the increase, according to UI officials.

Balfour Beatty Investments, which partnered with UI to build and oversee the property through a 41-year lease, has the controlling vote when it comes to rental rates and financial aspects of the project, limiting the UI’s power to affect prices. But UI officials said they expected rent would increase to market rates and the transfer of students from the old Hawkeye Court apartments to the new Aspire complex would be minimal.

“We knew there was not going to be a great transference,” said Von Stange, assistant vice president for student life and senior director for UI housing and dining. “For most people in Hawkeye Court, price was No. 1 consideration. If the rates went up too high, they would go to the next least expensive place to live.”

Stange said he voted for the rate hike after representatives from Balfour Beatty explained their reasoning for the above-average increases. Those reasons, according to UI officials, included additional construction costs for the project’s second phase and increased utilities.

But the only explanation cited in the meeting minutes was a desire to keep rates for the first and second phases of the housing project close.

“The goal is to control the gap between rates for phase I and phase II,” according to the meeting minutes. “This resulted in a larger increase of 4 to 7 percent for phase I.”

The company has told graduate students and The Gazette the increase in rental rates for the next leasing term was driven “by above average increases in both utility rates and real estate taxes.”

“These costs are outside of our control and unfortunately were higher than anticipated,” Maureen Omrod, a spokeswoman with Balfour Beatty Investments, told The Gazette last week.

Stange said he also was satisfied with the rent increases, knowing that current tenants would be allowed to renew at a lower rate. Minutes show the committee approved renewal rate increases of 7 percent for a two-bedroom, two-bathroom apartment and market rate increases of 11 percent.

But fliers left on tenants’ doors over the Thanksgiving break said “only the first 100 residents who renew their lease will benefit” from the lower renewal rate. Stange said he doesn’t recall talking about limitations on the number of renewal rate recipients during the September meeting.

But, Stange said, he does have concerns about giving the lower rates to only a certain number of people.

“It’s easier and less expensive to keep renewing a tenant than to find a new one,” Stange said.

The university in 2013 partnered with Balfour Beatty to replace the Hawkeye Court apartments, which were built in the 1960s. Balfour Beatty financed construction of the project’s $31 million first phase to build a 270-unit complex, which opened in 2014, and then entered into the second phase of the project — construction of a $34.5 million complex that will include 252 units.

The second phase is expected to be complete in August.

UI graduate students have called the Aspire leasing practices “predatory” and a “misappropriation of public lands for private gain.” In a petition now signed by more than 560 supporters, students said rates for a 1-bedroom apartment in the new Aspire complex are 130 percent higher than those in the old Hawkeye Court they replaced. And the students are advocating for plans to help prevent gentrification of graduate student housing and ensure they have an affordable place to live on campus.

“Fundamentally, Aspire at West Campus is redefining graduate student housing into a wealthy elite apartment complex intended for those who make more than a fixed, annual, half-time stipend,” according to the petition.

Sam Lustgarten, a 26-year-old fourth-year graduate student, said he met with UI President Bruce Harreld on the topic last week, and Harreld was receptive to the students’ plight — although he didn’t lay out specific plans or a timeline for action. Graduate students also met with UI administrators Wednesday and learned of productive discussions with Balfour Beatty addressing some of the concerns.

But, Lustgarten said, details of those talks have not been made public.

And, he stressed, “We are eager for the university to do more.”

“We are still concerned about the long-term consequences,” he said.

Vice President for Student Life Tom Rocklin confirmed for The Gazette the university’s interest in launching a task force or committee focused on the issue of affordable graduate student housing.

“We are hoping the establishment of this task force sets a precedent and makes a bolder statement to the university that action will be taken,” Lustgarten said.

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