University of Kentucky Smart to Explore Private Sector for New Campus Housing

As my colleague Leonard Gilroy and I explain today in our commentary, University of Kentucky Smart to Explore Private Sector for New Campus Housing, ongoing state budget deficits and challenges are putting pressure on state university systems and prompting them to explore ways to cut costs. Higher education officials are desperately seeking ways to keep services, maintain facilities and find less costly and more efficient ways to build and modernize the dorms, academic buildings and other capital intensive facilities needed.

To do this, some are turning to public-private partnerships (PPPs), arrangements in which public entities contract with private sector firms for the financing, design, construction, operation and/or maintenance of public assets. The University of Kentucky (UK) may become the latest university to embrace public-private partnerships. Yesterday, the university announced that UK President Eli Capilouto told its board of trustees the school would begin negotiations with a Memphis-based company to potentially upgrade and expand over 9,000 residence hall beds over the next decade.

Other noteworthy universities that have explored this approach to student housing include:

  • Florida Atlantic University;
  • University of California Davis;
  • University of Arizona; and
  • Montclair State University.

As we explain in the piece, there is a growing body of research that demonstrates the public-private partnership model makes sense. A 2007 Reason Foundation study, Privatizing University Housing, outlines the long-term land lease approach that is commonly used. Meanwhile a June 2010 white paper Bay Area Council Economic Institute found that PPPs can deliver 15-30 percent life-cycle cost savings for operations and maintenance.

For more, read the full piece available online here.