Training in economics should teach anyone that there are at least two dynamics to watch for in the solution to any problem.

Image Credit: Ellen Nugent

At least two sides

Training in economics should teach anyone that there are at least two dynamics to watch for in the solution to any problem - what are my costs and by how much do I benefit? I have far too much training in economics. I studied it in school, in my first attempt at college and I have now digested another 7 years of it as a mature student, so I think about costs and benefits a lot.

Of course, my own costs and benefits are only a part of any decision. Good decision making is informed by thinking about other people’s benefits too, and also trying to understand other people’s potential costs. That is the kind of thing that I am going to be looking at in this column this year. I will pick an issue, outline the simple view, and then try and think about it a little deeper, speculating on some of the other costs and benefits, some obvious and others not so obvious that might be in play. Maybe this will help us understand the opposing position or even our own a little better.

Let us look at something very local, UCD Residence costs. There have been multiple protests organised in recent years trying to get UCD to lower the costs of on-campus accommodation. It is very likely true that high accommodation costs deter students from lower income backgrounds from attending college. It is also true that many students who do decide to attend anyway, struggle mightily under the strain that accommodation costs impose on them, so this is a natural source of anger and frustration.

Trying to look at this a little deeper, UCD Residences aren’t the only available student accommodation and yet they have a waitlist for places every year. This implies that there isn’t enough similar accommodation available more cheaply (or at least that people aren’t aware of it if there is). So fundamentally there is a supply problem. This shouldn’t be that surprising because there are accommodation shortages in general in the Dublin area which has pushed up rents. The straightforward solution to this is to build more student accommodation.

But given that more student accommodation can’t just be magicked into existence in the short term, is it still right that UCD charge so much for on campus accommodation? Well, yes and no. Let’s deal with the no first. UCD Residences is a profit-making part of UCD, it is not run to be revenue neutral and thus as an accommodation provider UCD is behaving like a normal business. UCD could run their residences for break even. Even including wear and tear, this may significantly decrease what they would need to charge. Yes, the money would then have to be made up elsewhere through higher fees or cutting back other expenditures, but it could be seen as UCD leading the way and addressing the student accommodation crisis in a tangible form.

On the other hand, lies the central argument of who would get to live there? If UCD Residences were priced below market rates lots of students would want to live there who didn’t before. What’s a fair way to distribute that bounty? You create a set of winners, those who get to avail of reduced rents and a set of losers, those who would otherwise have benefitted from the revenue that UCD would have raised. If you were to distribute the subsidised accommodation to the poorest UCD students it is likely that few who currently live there would get access, thus creating another set of losers. The demands on UCD’s coffers are endless and there are countless causes across UCD that could use more money. As it stands, those that get to avail of UCD Residences have to be able to afford them. That is potentially a transfer from those who are relatively well-off to a cause in UCD that you care about.

So, instead of protesting accommodation costs on campus, what should we be looking for? Well for one, we should look to make sure that that surplus from UCD Residences is invested in on campus services. Now, more than ever, we should be looking to see expansions of UCD Health Care facilities for both residents of UCD and for the student population as a whole. We may want to consider pushing UCD to increase on campus accommodation so that future students have at least the chance of facing lower rents. This is a definite way that UCD can contribute to the real solution needed. An expansion of on campus accommodation might allow for a more vibrant campus in general, with more local facilities supported by a greater available population (though none of this would be without other costs of course). 

Most importantly of all, we can lobby the government to expand eligibility for grants, increase the amounts available for students from the lowest income households and increase funding for the University Sector in general.