Uni picks $1.8m loss over higher hall fees

Te Herenga Waka Victoria University of Wellington says an estimated $400,000 Wellington rates rebate is effectively being passed back on to students in the form of a lower increase to hall fees for next year.

It comes as the university predicts a $1.8 million loss across its student accommodation service next year. Acting chief operating officer Simon Johnson said the loss was not unexpected given the combined impact of Covid-19 and record high inflation which the university recognised was also affecting students.

‘‘The value of the university’s settlement with Wellington City Council has effectively been passed on to students in the form of a lower increase to 2023 pricing than would have otherwise been necessary.’’

The university and city council have been in discussions for some time over the rateability of properties used for student accommodation.

However, in August, the council agreed that university halls of residence should be classified as educational institutes and were thus exempt from rates under the Local Government (Rating) Act.

A confidential settlement was reached between the two regarding the refund of rates ‘‘paid in error’’.

Johnson said despite that reduction, the university still expected to make a loss as a result of rising construction costs, supply chain issues, rising fuel and food costs, as well as increasing rent and insurance costs.

Reduced occupancy rates were not contributing factors as demand from school-leavers for first year halls remained strong, he said.

There was a need to ‘‘balance financial performance with affordability for students’’ .

For this reason the university decided against increasing room rates to the extent necessary to deliver a breakeven result which would have required a 9% fee increase. While hall fees had still risen 4% on average, it was a lesser jump than had the rates issue with the council not been settled, or the university decided against the loss, he said.

‘‘We make a loss, but it’s not the most important thing given our need to make sure we’re providing a safe and high quality environment for students.’’

Hall fees for 2023 range from $262 a week or $9694 a year for Everton Hall, a self-catered hall, to $512 a week or $18,944 for Te Puni Village. The university had decided against increasing prices for Weir House residents, keeping it at the 2022 rate of $344 a week or $12,728 a year in recognition of the impact of ongoing construction work.

In a statement, Victoria University of Wellington Student Association said uni halls provided significantly different experiences and services to more standard accommodation. The association hoped that any monetary gains to the uni regarding the halls and rates were ‘‘put back into the halls to support their students’’.

There was a need to ‘‘balance financial performance with affordability for students’’. Simon Johnson Victoria University