Up In Flames
By Sara Ganim
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.
And that’s because the biggest public universities are generally in small towns.
Towns that share few common demographic and geographic features: A lot of the buildings are more than 150 years old. Many are in areas that are rural. Often, the towns are very dependent on the university economy. And often, even with the financial prop of being a university town, they are still economically depressed.
This situation accentuates a kind of class-system when it comes to campus housing — students (or parents) who can afford the big, shiny new multi-story off campus apartments, and those who turn to the cheaper option: old converted homes 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 television, plus a microwave, 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.
“I know exactly what you’re talking about,” said Janet Maupin, a fire inspector and a director of the Center For Campus Fire Safety. “And (I) 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.”
A scary, but very common situation.
“I’ve seen both really, really good landlords, and really terrible landlords that you wonder how they can sleep at night,” Maupin said. “The worst inspection experience I ever had was a young student who happened to be an international student, 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.
“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?’”
For her day job, Maupin is a fire inspector in Champaign, Illinois — home to the University of Illinois.
“We have so many rental units in the city of Champaign,” she said. “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.”
It’s also common to find that there are not enough “official” dorms for students to live in and off-campus housing becomes a critical part of the university infrastructure.
“People don’t know how to shop for the right housing situation,” Maupin said. “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… things like that. But people tend to still rent the old, third-story, converted attic because it’s private.”
Because, it seems like a better deal.
“But if they really comparison shop, you’re really not getting more for your money,” Maupin said.
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 in a college town, where students are not always thinking safety first, someone should be looking for those things. Even if it’s not the student renter.
Someone like a code inspector.
Code inspections reports, deficiencies, violations — those are a matter of public record.
But as you know from following 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.
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, then if not, with a phone call follow up to the code inspection office to see how we could get the information.
The results varied greatly.
Why Don’t We Know reporter Brittney Miller and associate producer Tori Whidden found that inspections were not happening regularly. Ones that did happen were often not publicly available in an online database where a student or parents could easily find them.
Most of the time, code inspectors didn’t even return our calls.
There were a few places that seemed to do it right. College Park, Maryland, for example, has a website that looks like it was built to cater to students.
But in most places, it’s likely a rental home could go years without seeing a routine inspection for something like a blocked fire exit or working smoke detector.
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 we began 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, N.Y., 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.
“They still never figured out what caused it,” said Bob Fitzsimons, the father of Kerry Fitzsimons, who died that night.
Bob Fitzsimons is a steamfitter on Long Island.
“One of the parts that we take care of is (the) 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.”
Like the majority of converted rental homes, the one where Kerry lived “there was smoke alarms in the house, no fire sprinklers,” Fitzsimons said.
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.
But the 99-year-old home that Kerry lived in was zoned as a single-family house. No code violations resulted from the fire.
“It was not set up the way it should (be), code-wise, it wasn’t registered as a multi-person dwelling,” Fitzsimmons said.
The National Fire Protection Association (NFPA), 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.
“It’s not considered in most places,” Fitzsimons said.
Those “best practices” are just a suggestion. Not a standard.
A Poughkeepsie town code inspector told me that when the owner of the house where Kerry lived rebuilt the home, he did add sprinklers.
“I’m upset with myself that I didn’t have code enforcement check out the house beforehand. Never even thinking about it,” Fitzsimons said.
Bob Fitzsimons and his wife started a non-profit called the Kerry Rose Foundation to help spread awareness and push for stricter laws.
“After Kerry passed away, extremely grief stricken of course, but angry,” he said. “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,” he said.
Code enforcement is often a very local issue. It’s written at the city or borough level, which presents more challenges for college towns.
For example, Maupin works in a college town that is actually two college towns: Champaign and Urbana, which together share about 40,000 University of Illinois students. And as she explains, “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,” she said. “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.”
“And I can tell you from being a city employee all these years, the makeup 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,” she said.
As Bob Fitzsimons points out, there is a major economic incentive.
“A lot of these towns wouldn’t exist except for the colleges,” he said. “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.”
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 that the mayor was the biggest landlord in town– owning 17 properties — for a total of 136 rental units. They got the information through public records requests.
Students there were pushing for a full-time inspector because records they received 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 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 to get those results, they relied on the power of the newspaper. They filed multiple public records requests, which took several weeks, and used their voice 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 to live.
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.
“The definition of on versus off campus housing is different in different parts of the country,” Maupin said.
On campus, there are issues, too.
In the wake of his grief, Bob Fitzsimons began cold-calling universities across the country, asking them how many sprinklered dorms they have, and he discovered another data desert.
“You’d be surprised how many campuses aren’t sprinkled or partially sprinkled,” he said. “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.”
“I actually talked to a fire marshall, I’m not going to say what school, it was a state university in New York,” he said. “I said, ‘Listen, how many beds on campus?’ He threw out a number. … 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.’”
What kind of money are we talking about? It’s likely $900 to $1,000 per dorm room, and up to $1,500 off-campus.
“The bottom line is, they save lives,” Fitzsimons said. “I think you’re 85 to 90 percent more likely to walk out of a fire, a business or a house, that has fire sprinklers. The stats are unbelievable.
“It’s a money thing,” he continued. “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?… It’s safety. It’s all about safety. It’s a shame. My daughter Kerry should still be alive today. She really should.”
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 later sued the college, alleging that it had a duty to make sure those houses were safe. The lawsuit was not successful.
But it raises a point that Fitzsimons brought up: Why direct students to third-party housing? Why not let them stay on campus?
“All these colleges are not-for-profits, that’s a load of crap,” he said. “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 ‘nother 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.”
Build more dorms.
This is where the story takes a bit of a turn, away from safety hazards to another kind of hazard: A financial hazard.
Many universities don’t actually build or even own their own campus dorms, but instead engage in public-private-partnerships, known commonly as P3s, in order to bypass government red-tape and quickly expand campus housing.
In fact, this is a booming business. And when you think about it, it makes sense. For many years, this was as close as it gets to an investment sure-thing. Especially because in some of these deals, the public universities guarantee that they will find the renters.
Even when that’s not guaranteed contractually, it’s still pretty likely that it’ll work out, making it very attractive to developers.
“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,” said Jessica Wood, the sector leader for higher education at S&P Global Ratings.
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 the marketing and the 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.
“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,” Wood said.
“We’ve seen growth in a variety of different P3 in the higher education space over the past sort of 20 years. 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.
While building dorms may seem pretty dull and unexciting, actually this has become really attractive to Wall Street investors.
Until COVID-19 shut down campuses all across the country.
This has led to some really sad stories of parents and students getting stuck with leases of $10,000 or more, and private companies that won’t release them from their obligations.
But even before the pandemic, there were signs of trouble.
In January, The Wall Street Journal called campus housing “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.
“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,” Wood said. “And we’ve seen some run into lower occupancy then projected.”
In some cases, universities overestimated what students would pay for nice, new buildings with lots of amenities.
“So you’ve got a new residence hall, maybe geared towards upperclassman, with a pool or whatever it is, all these different amenities,” Wood said. “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,” she added.
Moody’s credit ratings reports that student housing now accounts for 40 percent of defaults in the multi-family sector — even though it’s only 6 percent of all the 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 six of them had a rating on the A-scale.
That’s less than 10 percent.
The worst are at the University of Oklahoma, and at Texas A&M, where Moody’s downgraded a $361 million bond to junk status.
“This project was 3,400 new beds. So it wasn’t replacement beds. It was new beds. And it looks like in fall ’17, they had 54 percent occupancy,” Wood said. “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 percent 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. … 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.”
Texas A&M enacted a “must live on campus” policy to try to remedy it, but it’s unclear if it will help.
At the University of Oklahoma, a similar scenario has gotten particularly nasty.
There, a “flagship housing project” for upperclassmen was not as popular as anticipated.
With only 30 percent occupancy, the developer sued the university, saying it misrepresented student demand.
And this was all pre-pandemic. Although, COVID-19 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 was 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?
When privatization creeps into governmental space, we, as taxpayers, lose the ability to make sure our money is being well-spent and well-managed.
It allows for misuse and abuse.
Like, at Wichita State, where the university shut down on-campus dorms to force students into private ones that weren’t filling up.
Student reporters started digging and unraveled a rat’s nest of insider deals. It turns out, a university regent owned a stake in those private dorms.
This whole area is super lightly regulated and there’s no meaningful oversight. The structure of these P3s — LLCs inside of LLCs inside of LLCs — make it a challenge to find out who is actually making money.
And whether any of it is about to go up in flames.
Additional reporting by Why Don’t We Know reporter Brittney Miller and associate producer Tori Whidden.