Up in Flames

By Sara Ganim

October 11, 2020

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Runtime: 00:40:29

Below is a transcript of episode 8. We encourage you to listen to the episode. It was written to be heard, not to be read. 

Sara Ganim Narration: What comes to mind when you think of a college town? Old brick buildings covered in ivy, some narrow, tree-lined streets, with little bookstores and coffee shops. That’s because the biggest public universities are generally in small towns. Towns that share few common demographic and geographic features. A lot of them are more than 150 years old,many in areas that are rural. Often, the towns around them are very dependent on the university economy and often, even with the financial prop of being a university town and they are still economically depressed. This situation accentuates a kind of class-system when it comes to campus housing. Students who can afford, or whose parents can afford the bright, shiny new multi-story off campus apartments and those who turn to the cheaper option — old converted homes, some better kept than others. That have been divided up into as many living spaces as possible so they can be rented to students. Some of these houses are owned by upstanding landlords but some are not. and many are in towns where there is no vigilant code enforcement. 

Let me paint a picture for you.

The house is more than 100 years old, the wiring is too. It’s the old knob and tube wiring from the late 1800s and early 1900s. It’s definitely not equipped to handle six or seven students, each with three or four electronic devices they plug in each night, plus a tv, plus a microwave, plus a fridge — a washer-dryer. There’s someone living in the basement, someone living in the attic, even the living room has been made into a bedroom. There is just one door in the front and one in the back. and you have to go through the kitchen to get out.

Janet Maupin: I know exactly what you’re talking about, and actually lived in one myself too. An old house that was converted into three apartments and someone was up in the attic. And they did have an exterior stair, but I can tell you it was not up to code, no way, no how. And, that was obviously the cheapest apartment, but it was a scary situation.

Sara Ganim Narration: Scary,but very common situation.

Janet Maupin: I’ve seen both really, really good landlords, and really terrible landlords that you wonder how they can sleep at night. The worst inspection experience I ever had was a young student who happened to be an international student, who had rented a crawl space in a house. So, he would go in the house, go down a little hatch in one of the closets into his crawl space.

Sara Ganim: Wow.

Janet Maupin: Yeah. And here, they’d given him an extension cord, a space heater, believe that. And he was happy. He lived there for like six months and was happy as a clam until we got our spring rains and it flooded out his apartment. And, the landlord, I just remember sitting there thinking, at a meeting with the two of them, and I’m like, “How could you do that?” 

Sara Ganim Narration: From the University of Florida’s Brechner Center for Freedom of Information, I’m Sara Ganim, and you’re listening to an episode of ‘Why Don’t We Know’ the podcast that dives deep into data and comes out with real stories. 

Janet Maupin: Well, actually I started in the building safety division

Sara Ganim Narration: Janet Maupin is a director of the Center for Campus Fire Safety and she’s also a fire marshall in a college town, Champaign, Illinois, home to the University of Illinois. 

Janet Maupin: And had an interest in fire safety. I think stemming back to when I was a freshman in high school, our neighbor’s house burnt to the ground on Thanksgiving Eve.

Sara Ganim: And then, campus fire safety, how did that become something that you began to focus on?

Janet Maupin: Well, just by the nature of the makeup of this community. We have so many rental units in the City of Champaign, and the way the students come to the university anymore is pretty much that freshman year they’re in the university housing. So, they’re in the professionally run, state owned dormitories. But then, that sophomore, junior year they’re going out into fraternities, sororities, and in that senior year it seems like everybody wants to have their own apartment for more privacy and independence. So, as they transition through their college careers here we kind of follow them through all their different housing options.

Sara Ganim: I also attended a Big 10 school. I know a little bit about the campuses, I’m sure there is not enough student housing for students to all stay in the dorms all four years. So, they’re kind of choice or no choice, like they have to go find an alternative.

Janet Maupin: Exactly, People don’t know how to shop for the right housing situation and get those safety features built into the building. So, typically you can, with the same amount of rent, you can find a nice quality apartment in a building that is fully sprinklered, has full fire alarm systems, and all the bells and whistles and good exiting and things like that. But people tend to still rent the old, third story, converted attic because it’s private.

Sara Ganim: Because you can get more, or seemingly more, for your money?

Janet Maupin: Exactly. But if they really comparison shop, you’re really not getting more for your money

Sara Ganin: at least when I was a student, which was I guess now almost 15 years ago, but it was a significant difference. And you knew you were getting a lesser quality, but you put up with it because you were 20 and whatever. But I also felt like the landlords were just like, I mean some of them, I’m sure, were great. And some of them were just like, “Whatever, you’re a student. Deal with it.” And there wasn’t that same, I mean, I’m sure to their own credit, students probably didn’t take care of their houses very well either, right? But it wasn’t the same as if you were 30 and renting an apartment.

Sara Ganim Narration: When you’re 30 and renting an apartment, you notice things like smoke detectors and points of egress. But common sense would tell you that someone should be looking for those things,even if it’s not the student renter. Someone like a code inspector and code inspections reports, deficiencies, violations — those are a matter of public record. But as you know, from listening to this podcast,  public records requests are not always answered in a timely manner. even the faster ones can take weeks to come back, certainly not the kind of turnaround time you might need if you are applying for an apartment.  So, for this episode, we thought we’d put ourselves in the shoes of a student or parent who has just a few hours, not a few weeks, to search for code inspection reports.

Code enforcement office: Code enforcement Shaniqua

Sara Ganim Narration: We searched the websites for local municipalities in more than a dozen major college towns first trying to find out if the safety records are easily available online, and then if not 

Brittney Miller: Hi my name is Brittney Miller

Tori Whidden: Hi my name is Tori Whidden

Sara Ganim Narration: With a phone call follow up to the code inspection office 

Brittney Miller: Hi I’m doing some research for a podcast.

Sara Ganim Narration: To see how we could get the information. 

Brittney Miller:  It definitely varied from place to place. 

Sara Ganim Narration: Brittney miller and Tori Whidden did the research and reporting on this. 

Brittney Miller:  What I was looking for, ideally, was to find that not only were inspections happening regularly, but that those inspection results were publicly available in a database, where as a student, I could put in an address of a house I’m considering and find out instantly if it’s had any code violations. In reality, that was not the norm. 

Sara Ganim:  Tori, was that your experience too?

Tori Whidden: It was. Of the five towns I researched, only one had a database. It was here in gainesville. but the other places failed to provide any kind of straightforward documentation of code violations. there was no single database where a student or parent could look up an address and see if a specific place is safe or not.

Brittney Miller: For example, in Athens, Georgia, I couldn’t find any straight-forward answer to their inspection processes. I actually went through their county ordinance, typing CTRL-F, looking for words like ‘inspection,” and ‘ordinance,” because they didn’t have the information readily available. 

Sara Ganim: You were using the find-function to try to locate key words because it was so hard to track down this information?

Brittney Miller: Yes. It could be in there, buried somewhere, but it’s definitely not easy to find.

Tori Whidden: And we both called these towns where we couldn’t find this information easily online, to make sure we weren’t just missing something, but most of the time, we couldn’t even get a call back. 

Brittney Miller: There were a few places I was impressed with. College Park Maryland, for example, had a website that looked like it was built to cater to students. 

Sara Ganim: What do you mean by that?

Brittney Miller: Well, I was partly judging the ease of this process. As a student myself, I am not familiar with some of the language of code inspection. In some places, the language was very hard to decipher, especially when I had to go into the town ordinances, because there was no dedicated website for this.I don’t think that would be easy for someone not accustomed to reading these laws.

Sara Ganim: So basically, if the information is so difficult to find or difficult to understand, it’s unlikely it will help people. 

Brittney Miller:  Right.

Tori Whidden: Another important point. What we were searching for were code violation reports. Those typically happen when someone makes a complaint.  But what about routine inspections? In about 70 percent of the places we looked, it was very difficult to figure out if rental properties are routinely inspected the same way that, say, restaurants are inspected. Routine inspections would make sure that smoke detectors are turned on, fire exits aren’t blocked, sprinklers are working, stuff like that. 

Sara Ganim: And it’s not likely that a student renter is going to file a complaint with the code office saying “there are not adequate fire exits”

Tori Whidden: Right, and so, according to what we found, I think it’s very likely that a home could go years and years, tenant after tenant, without a routine inspection. 

Sara Ganim Narration: This is one issue where public records and accessibility cross over from public universities to private ones, too, because we’re talking about municipal safety records gathered from nearby towns and those are public documents no matter what. So even though I started this episode by talking about how many large public schools are particularly vulnerable because of their geography, many private schools are in similar positions. 

Marist college, in Poughkeepsie New York, for example. It’s about 90 miles outside of New York City. The town is 220 years old. Housing data shows the majority of homes there were built before 1939. Forty percent of properties are small rentals, meaning converted homes. In January 2012,  one of them caught fire trapping and killing three of seven people who were inside.

Bob Fitzsimons: They still never figured out what caused it. My name is Bob Fitzsimons. I’m a local 638 steamfitter. I live on Long Island.

Sara Ganim Narration: Bob Fitzsimons’s daughter, Kerry Fitzsimons was one of the students who died that night. 

Bob Fitzsimons: I’ve worked all over the Island and the city. Steam fitting is pipe fitting. One of the parts that we take care of is a fire sprinkler. How ironic is that? I’ve spent probably a third of my career installing sprinklers in the city, in schools and all around.

Sara Ganim Narration: Like the majority of converted rental homes

Bob Fitzsimons: There was smoke alarms in the house, no fire sprinkles.

Sara Ganim Narration: The state of New York says that anytime five unrelated people are living in the same home, it’s considered a boarding house and should have fire sprinklers.  According to a Poughkeepsie code inspector, who I talked to on the phone, the 99-year-old home that Kerry lived in was zoned as a single-family house — no code violations resulted from the fire. 

Bob Fitzsimons: It’s just, it was not set up the way it should, code wise, it wasn’t registered as a multi-person dwelling.

Sara Ganim Narration: The NFPA, the National Fire Protection Association, a non-profit organization that writes a lot of the fire code that is later adopted by states and towns suggests that when a single family house is converted into apartments. It should be updated and sprinklered. The NFPA also says it’s best practice to retrofit sprinklers into any building that has three or more units.

Bob Fitzsimons: It’s not considered in most places.

Sara Ganim Narration: Those ‘best practices’ are just a suggestion, not a standard. The Poughkeepsie town code inspector told me that when the owner of the house where Kerry lived rebuilt, he did add sprinklers but the home that burned down did not, even though it had been modified to add more bedrooms.

Bob Fitzsimons: I’m upset with myself that I didn’t have code enforcement check out the house beforehand. Never even thinking about it. 

Sara Ganim Narration: The Fitzsimons Family started a foundation called the Kerry Rose Foundation to help spread awareness and push for stricter laws. 

Bob Fitzsimons: After Kerry passed away, extremely grief stricken of course, but angry. So, so angry, with myself for not looking further into the house or having code enforcement come and check out the house. That’s something that we tell all these kids to do now, too, or their parents. If they’re going off campus, make sure code enforcement comes and checks out this house. A lot of times you just tell the kids to do it. They don’t want to do it, because the landlord’s going to say, “I don’t need you here. We don’t want you here anymore.” That’s all. It’s all about dollars and cents. Greed is what it really is. Unless you report this house, that’s when code enforcement comes in.

Sara Ganim Narration: I talked more about how local of an issue this is with Janet Maupin,. the college town fire marshall. Actually, technically, her college town is two college towns — there’s Champagne and there’s Urbana — twin cities with a combined student population of 40 thousand and that presents its own challenges.

Janet Maupin: We all keep records differently, and a lot of times it’s not that we try and withhold information, it’s just hard to pull together for us too. We don’t have the best software. We have old, outdated software. The record keeping is a real problem. And it’s easy for property owners to keep a lot of information private. The only information that is publicly accessible in Illinois is their tax records. So, you can find out ownership by going through the tax accessor’s records, but you kind of have to know what you’re looking for and how to go through that system. So, it’s really not easy to find out information.

You have to go through the Freedom of Information Act requirements, and dot a lot of I’s and cross a lot of T’s. You have to have everything perfectly correct, like the address, the pin number, and everything like that.

Sara Ganim: I think most people don’t realize it’s also a very local issue. The code enforcement is down to the township, Borough Council, city government level. And so, if you end up crossing a road you might end up in another township with completely different rules and not even know it because you’re not really from there, you know?

Janet Maupin: Absolutely, and I can tell you from being a city employee all these years, the make up of your local jurisdiction, like our city council, is made up of people who make their living selling real estate or being landlords in this community. And part of the reason they run and get on these boards and commissions is they’re protecting their investments. So, we have people actively voting for certain codes and ordinances that I don’t want to say line the pockets of landlords, but certainly keep the code requirements down a bit.

Bob Fitzsimons: The people that own these homes are the wealthier people in these towns. The wealthier people tend to be town officials in these towns. Are they going to police themselves? It’s a very difficult situation. A lot of these smaller towns wouldn’t exist except for the colleges. That’s what they thrive on, these colleges. The kids coming in and spending. I’m going to say, mom and dad’s money, throughout the town, renting places, spending money at food stores, just dumping money into the economy.

Sara Ganim Narration: A 2016 story by the student newspaper at Frostburg State in Maryland reported that students complaining to city hall about the poor conditions at off-campus housing were running into this very issue of a conflict of interest. The paper reported the mayor, Bob Flanigan, was the biggest landlord in town, owning 17 properties, for a total of 136 rental units. I just have to add, you know, how they found that out? Open records requests. Yeah, when they work, they really work.

Anyway, the students were pushing for a full-time inspector because more records they got through records requests showed that 75 percent of the rental properties in Frostburg were out of compliance with housing code, and the frequency of inspections had dropped sharply. All of the top violations were related to fire safety, no fire extinguisher, inadequate bedroom egress, faulty circuit breakers, missing smoke detector, electrical system violations. The students at Frostburg put up a pretty big stink about all of this, forcing the mayor to admit he understood their concerns, although standing by his claim that his properties were safe, but I just want to underscore what it took to get that far. The student newspaper filed multiple public records requests. it took several weeks to get the results. and even when the documents came, there were holes in them. They used the power of the pen to put pressure on the city to turn things over and answer the demands. 

That kind of resource isn’t available to any student or parent who is just trying to make a good decision before signing a 9-or-12-month commitment about where you are going to live and not only is this often a data desert at a local level, it’s also a data desert on a national level. 

I could find no group that tracks injuries from fire incidents in off-campus housing, several groups track deaths, but they all have their own criteria, and so the numbers vary. The Center for Campus Fire Safety says by its count more than 130 people have died in 92 different fatal fires since 2000. Other estimates are as high as 153. All of them show that the vast majority happen in off-campus housing.

Janet Maupin: Even the definition of off campus housing has gone back and forth over the years that I’ve been a part of the center. Statistically what has to be turned in for a fire on campus now is regulated much like the Clery act for assaults. 

Sara Ganim Narration: The Jeanne Cleary Act is a federal law that requires universities to report crimes on campus. but that last part on campus a lot of things get lost because of that condition. Crimes that happen in neighboring towns, or in off-campus student housing, often don’t get counted as part of the clery act, even though they affect students and reflect the campus environment and Janet Maupin says that the same loophole exists for fire safety too. 

Janet Maupin: The definition of on versus off campus housing is different in different parts of the country.

Bob Fitzsimons: Like you were saying earlier, code enforcement varies so much from town to town, from school to school, from state to state. 

Sara Ganim: Were you able to push for change after the fact? Were you successful? Do you feel like you’ve been successful in the last eight years?

Bob Fitzsimons: We had a couple of laws passed right after Kerry passed away. State of New York, that every college and university must let you know whether or not there’s fire sprinklers in your room.Then a year later, two years later, every rental or lease in the state of New York, has to let you know what kind of fire safety is in the place you’re going to rent or lease. That was pretty two pretty big laws that were passed. I don’t know how well they’re being enforced. There’s no way to tell.I think we’ve opened the eyes of a lot of parents. Some kids, like I said, kids are going to be kids, but the parents and kids. They’re asking the questions now. 

Sara Ganim Narration: The Fitzsimons family push for change is not just about off-campus housing, even though that’s where the majority of the fatalities happen. Bob Fitzsimons wants universities to be held to a higher standard too. And in his quest for more information about on-campus housing, he discovered another data desert. 

Bob Fitzsimons: You’d be surprised how many campuses aren’t sprinkled or partially sprinkled. I would say, I don’t want to put a number to it, but it’s somewhere about half the campuses in the United States aren’t sprinkled.

Sara Ganim: How do you know that?

Bob Fitzsimons: Again, I was very, very angry. 

Sara Ganim Narration: He says he called dozens of campuses in the years following Kerry’s death, questioning them about their fire safety measures.

Bob Fitzsimons: I actually talked to a Fire Marshall. I’m not going to say what school. It was a state university in New York. I spoke to a fire marshal and I said, “Listen, how many beds on campus?” He threw out a number. I’m just going to use a number, let’s say 500. But it was probably 10 times that. I said, “how many rooms are sprinkled?” He just said, “Excuse me, what are you asking?” I said, “I want to know how many rooms are unprotected is what I’m asking you.” The guy said, “I can’t talk to you anymore” and he hung up on me. That happened a few times, not just in New York. I called different states too, at that point. Again, I was extremely angry. I still am. It all boils down to the almighty dollar. “We Don’t have the money for that. We don’t have the money for that.”

Sara Ganim:  You work in the business, though. I mean, can you tell me, when they say, “We don’t have the money” what kind of money are we about?

Bob Fitzsimons: In New York, it’s probably, I guess, to do a sprinkler system, probably $500 a head, something like that. When you’re going over square feet, one sprinkler head usually covers 120 square feet. It’s a room. You need, usually one sprinkler head per dorm room. It’s not a ridiculous amount. It’s even cheaper as you get into the residential side, because you don’t have to have all the different size pipes. There’s a way they hydraulically calculate sprinkler heads. And when you get into residential sprinkler, it changes drastically.

Sara Ganim Narration: We did some research, just to be sure. Here’s why don’t we know Associate Producer Tori Whidden

Tori Whidden: His estimate was pretty close. In some places, dorms are a little bigger. I did the math and found that it was fair to assume it would cost about $900 dollars per room for a dorm building, and $900 to $1,500 per bedroom in an off-campus house.

Sara Ganim: Even if we are generous, let’s just be generous for a second and say it’s a $1,000 a room, right? Like it’s not really that much money, especially for a state university. Even if it’s a $1,000 a room.

Bob Fitzsimons:The bottom line is, they save lives. I think you’re 85 to 90% more likely to walk out of a fire, a business or a house, that has fire sprinkles, 90% more likely to walk out of that than one that doesn’t. The stats are unbelievable. I don’t know if you’ve ever seen the side by side burn, where they take a fabricated room and they’ll build two rooms, side by side. They’ll light them up. One has fire sprinklers, one doesn’t. You can see how quick the fire spreads, If you watch the side by side, the fire’s usually extinguished in seconds with the fire sprinkler. There’s smoke still and all that. That’s a danger also. But if you give these people a fighting chance to get out. It’s a money thing. Somebody said, “Why does government have to tell me I have to put sprinklers?” Well, why does government tell you that you need a drivers license? Why does government tell you that you need this for that? It’s something. It’s safety. It’s all about safety. It’s a shame. My daughter Kerry should still be alive today. She really should.

Sara Ganim: What was her major?

Bob Fitzsimons: She was pre-med.

Sara Ganim: She wanted to be a doctor, save lives

Bob Fitzsimons: She wanted to be a doctor to save lives. It’s tough. The amount of people that have been affected by her death and the two other kids, Eva Block and Kevin Johnson, they were great kids. They really were great kids. But you notice, I keep saying kids, they was still kids. They were becoming young adults, but kids will be kids. I mean, they’re going to make mistakes. I don’t know if a mistake was made that night, something happened. Like I said, we still don’t know. We’ll never know.

Sara Ganim Narration: Before the fire, Marist College had an online list of off-campus houses for students to reference, and the house Kerry lived in was one of them. The Fitzsimons family sued Marist College after the fire, alleging that it had a duty to make sure those houses were safe. The lawsuit was not successful, but it raises a point that Bob Fitzsimons brought up. Why direct students to third-party housing? Why not let them stay on campus?

Bob Fitzsimons: All these colleges are not-for-profits, that’s a load of crap. They’re there to make money. I can’t believe how much endowments these schools have, millions and millions, hundreds of millions of dollars that they have. Why not dump it into the infrastructure of the schools? Build more dorms, so the kids don’t have to live off campus. That’s a whole other side of this argument that drives me crazy. How can you have, say 2,000 beds and have 8,000 people in school? They should build more dorms.

Sara Ganim Narration: Build more dorms. That’s after the break.

We couldn’t have made this podcast without research and reporting help from students at the University of Florida. You can help support them, by making a donation to our student scholarship fund. You can find the information on our website WWW.WHYDONTWEKNOW.ORG

This is where the story takes a bit of a turn, away from safety hazards to another kind of hazard — a financial hazard. Did you know that many universities don’t actually build or even own their own campus dorms? It was news to me. I had no idea that a public university’s on-campus residence hall might be making money for a for-profit, private company. In fact, this is a booming business and when you start to think about it, .it makes sense.  

For many years this was as close as it get to an investment sure-thing, especially because in some of these deals, the public universities guarantee that they will find the renters, fill the beds. And even when that’s not guaranteed contractually — it’s still a pretty likely that it’ll work out. So, if you’re a developer,it’s kinda like, all you have to do is open up your pocket, and let the rent money roll in.

Jessica Wood: More and more developers doing these projects,

Sara Ganim Narration: I talked about this with Jessica Wood, the sector leader for higher education at S&P Global Ratings. 

Jessica Wood: To put it in sort of the most black and white perspective, it seems like sort of a perfect marriage if you’re building a dorm on a college campus and then you have a college or university that has strong demand and has had historically strong enrollment, every year you should have sort of that inflow of students looking for a place to live.

Sara Ganim Narration: One government document we found lays it out pretty nicely: The university will line up the financing for the for-profit company with tax-exempt bonds. Often, those are backed by the university itself and  the university does all your marketing and your bill collecting. So, if a renter doesn’t pay, the school can withhold registration or even a diploma and it’s good for the public university, too. In many cases, it helps them improve the look of their balance sheets and it makes life easier because they don’t have to go the normal route of petitioning the legislature for cash to build new buildings. They can bypass all of that governmental red tape and just get that big beautiful new quad quickly.

Jessica Wood: It’s more efficient from that standpoint, sort of that start to finish, having a new residence hall built and filled, the start to finish is perhaps more efficient, more quickly achieved, when going through a P3,rather than going down the route of issuing debt themselves. 

Sara Ganim Narration:These deals are called public-private-partnerships or p3s. P3s work like this the private, for-profit company gets a bond  — borrowing money from a public entity —  to finance the project and is then paid back over time in rent shares. 

Jessica Wood: Often on university land, and there’s some sort of ground lease connecting the university and that project. And that’s sort of the fundamental sort of definition of that P3 agreement. We’ve seen growth in a variety of different P3 in the higher education space over the past sort of 20 years I would say. We’ve seen quite a bit of activity in student housing, but you’ll see there’s some forms of P3s related to energy and utilities. You’ll see other types of P3s as well.

Sara Ganim Narration: While building dorms may seem pretty dull and unexciting, actually this has become really attractive to wall street investors. As I said before, it’s a sure thing. Unless, a global pandemic unexpectedly shuts down campuses all across the country. This has led to some really sad stories – of parents and students getting stuck with leases of 10 thousand dollars or more and private companies who won’t release them from their obligations. But also, even before Covid-19, there were signs of trouble. In January, the wall street journal called it “a party” that “may be over.” Citing the fact that universities didn’t stop building housing units when rising tuition costs began flattening the 1990s enrollment boom.

Jessica Wood: I think that’s why we’ve seen over the past few years, as more and more projects have been built, and we’ve seen some geared towards upperclassmen that perhaps have more choice to live off campus and we’ve seen some run into lower occupancy then projected.

Sara Ganim Narration: In some cases, universities overestimated what students would pay for nice, new buildings with lots of amenities. 

Jessica Wood: So you’ve got a new residence hall maybe geared towards upperclassman with a pool or whatever it is, all these different amenities. And of course, the more amenities, the larger the residence hall, et cetera, the more expensive it is to build and the more beds there are to fill. The cost to live there was maybe more than students wanted to pay. So we’ve seen some projects run into trouble from that perspective. At the same time, over the past couple of years, we’ve also seen demographics across the nation impacting university enrollments. we’ve seen some struggling with enrollment or enrollment declines. And at the end of the day, enrollment drives housing occupancy and so we’ve seen that have some impact. 

Sara Ganim Narration: Moody’s credit ratings reports that student housing now accounts for 40 percent of defaults in the multi-family sector. Meanwhile, it’s only 6 percent of loans. According to S&P global, which rates the stability of these bonds, there are currently 63 of these p3s involving u.s. universities, and as of March 2020, only 6 of them had a rating on the a-scale. That’s less than 10 percent.

Jessica Wood: And to give some perspective, our average rating is an A for say, a public university or a private university. 

Sara Ganim Narration: The worst are at the University of Oklahoma and at Texas A&M  University a 361 million dollar bond Moody’s downgraded to junk status. 

Jessica Wood: So we have it currently on CCC negative. I think what happened here is, you had a couple of new housing projects put up on a college campus within a few years of each other and they were significant in size. This project was 3,400 new beds. So, it wasn’t replacement beds, It was new beds and it looks like in Fall 2017, they had 54% occupancy — a much weaker occupancy can really weaken the overall project’s cash flows quite quickly. Because these projects are structured and projected with sort of like a 95% occupancy rate at opening, if they open well short of that, then there’s a huge revenue shortfall to begin the life of the project. And then you have an expense base that there’s probably not a ton of flexibility on. And so then your net operating income, if it starts out weaker than expected, there’s not a lot of way to really build that up. It’s not like in a residence hall, you can have 50% occupancy in one year and make it up the next year with 200% occupancy. You just can’t do it, unless you quadruple every room, which is not what students are looking for.

Sara Ganim Narration: Texas A&M enacted a “must live on campus” policy to try to remedy it, but it’s unclear if it will help.

Jessica Wood: What happened for this project is they breached their minimum debt service coverage covenant and while occupancy did improve, the project just wasn’t able to fully recover.

Sara Ganim Narration: At the University of Oklahoma, a similar scenario has gotten particularly nasty.

Oklahoma News 4: Luxury housing owners sending a letter to OU 

Sara Ganim Narration: There, a “flagship housing project” for upperclassmen was not as popular as anticipated. 

Oklahoma News 4: The company at the center of a lawsuit with the university

Sara Ganim Narration: With only 30 percent occupancy, the developer sued the university, saying it misrepresented student demand. Remember, this was all pre-covid. Although, covid certainly made a lot of it worse. For example, the University of Central Florida was forced to use federal pandemic stimulus money to pay the rent at two private apartment buildings after students fled campus in the spring. As the Orlando Sentinel pointed out, federal stimulus money, meant for students, ultimately benefiting the building owners. 

At the University of Maryland, students and parents were left on the hook with thousands of dollars in year-long rental bills after the private owner of the campus dorms refused to let them out of their leases and the online publication inside higher ed reports that a Rhode-Island-based developer named Corvias has been accused of pushing universities to re-open campus this fall in order to make sure occupancy in their buildings remains high.

This is how all of this gets us back to the heart of our main question: Why Don’t We Know? Because when privatization creeps into governmental space, we, as taxpayers, lose the ability to make sure our money is being well-spent, well-managed. It allows for misuse and abuse. 

Like, at Wichita State, where the university shut down an on-campus dorms to force students into private ones that weren’t filling up. Student reporters starting digging into why? And unraveled a rat’s nest of insider deals. Turns out, a university regent owned a stake in those private dorms. This whole area is super lightly regulated, there’s no meaningful oversight and the structure of these p3s. It can be like a Russian nesting doll — LLCs inside of LLCs inside of llcs — making it a challenge to find out who is actually making money and whether there is any corruption. 

In the last few episodes, we’ve focused heavily on this privatization creep and how a space that’s supposed to be public, is becoming less and less open. Whether it be through private portals to hide documents

  Paula Lavigne: Well, we don’t really have possession of it

Sara Ganim Narration: or private foundations to hide activity and influence

Alexa Capeloto: I can’t get a glimpse into these operations

Sara Ganim Narration: Or here, as a way to avoid government red tape. The main theme for part one of this season has been secrecy. Intentionally hiding information. Privacy – that’s  a little different. Part two of season one is about privacy. Privacy, at times, is a right and a well-deserved one at that, but some American universities are using privacy as a weapon in order to keep things secret. A little-known law called the Family Educational Rights and Privacy Act, FERPA  is central to how universities fight in the battle over what is truly private and what is simply secret. FERPA is the focus of part two of our season, which will begin next time. In the meantime, we’re adding a bonus episode on secrecy and coronavirus and how government agencies across the board are taking advantage of this health emergency to keep critically important information from the public by, you guessed it, ignoring or manipulating open records laws. Don’t forget to check it out. 

This episode was written and produced by me, Sara Ganim, with additional reporting by Brittney Miller and by Tori Whidden, who is also the associate producer. 

This episode was edited and mixed by James Sullivan.

Music for this episode was composed by Daniel Townsend.

The executive producer of wdwk is Frank LoMonte.

‘Why Don’t We Know’ is a production of the Brechner Center for Freedom of Information at the University of Florida.

Q special thanks to the Hearst Family Foundation for proving the grant money that supported this reporting. For more information, please visit our website at www.whydontweknow.org