Why are living costs of the Berkeley Student Cooperative houses about half that of UC Berkeley residence halls even if the BSC provides 24/7 open-kitchen food service within the cost?
With student budgets tightening over the year due to the economic recession, living expenses have become a major concern for students who are looking for a place to live in or around the UC Berkeley campus. Units 1, 2, and 3 provide the majority of available living spaces in the UC residence hall system. For the 2009 Fall Semester, a single costs $7,857, a double costs $6,950, and a triple, the cheapest of all UC residence hall options, costs $5,800. Each of these prices includes the standard meal plan of 1250 points per semester.
The 17 room-and-board houses of the Berkeley Student Cooperative offer rates that are half that of the Units. A full semester of room-and-board at any given co-op house is a set price of $3,270, regardless of whether the room one is a single, double, triple, or quad. Included in the cost is a comprehensive food service that allows house members to cook their own meals at anytime in the house kitchen. Each house has a kitchen/food manager that orders food for the entire house through the Central Kitchen office, which buys food in bulk from Costco, local farmers and producers, among others. In addition to the food service, each house must provide adequate furniture, network service, social events, utilities, and other amenities, whether they are hot tubs, pool tables, exercise equipment, or laundry machines that cost 25 cents per load. Since the co-op houses provide the same services the residence halls provide and more, why do they cost half the price of the dorms?
The first thing to consider is the meaning of a co-operative house. Co-operative houses are non-profit organizations that are managed and owned solely by the members themselves. By pooling money and resources and straying away from profiteering, members can save money due to the reduced costs in this economic model. This, however, doesn’t entirely explain why the co-ops are cheaper than dorms since the residence halls are not used as land meant for profit maximization; they are meant to provide students with housing and charge rates that simply cover the costs of running the service. Thus, we need to look past ideologies and look at the actual costs that incur from operating either a co-op or residence hall.
Meal plans are important to consider when looking at the difference in rates of co-ops and residence halls. To start, the per diem rate per member for food is currently $5.10, which covers breakfast, lunch, dinner, snack, or whatever one wishes to eat for that day. This sums up to a total of $606.90 a semester. In stark contrast, a meal plan through the UC costs $1250, which is only enough to buy 10-14 meals a week or 1-2 meals a day. The opportunity cost of spending such money is large since one can use that money to buy other meals or snacks, textbooks, or other student necessities.
To look at where the rest of one’s rent money is going towards, we must look at the underlying fixed costs of labor that each “business” must cover. Labor is key in determining why the co-ops are so much cheaper than the dorms. In the co-ops, each member is responsible for working for 5 hours per week in addition to the rent they pay. These workshifts range from cooking dinner, house maintenance, dishwashing, gardening, etc. Since the members are responsible for the labor within the house, there is little need for outside contractors, which in turn drives down the monetary costs of labor. Since the dorms do not have a workshift system, the members must cover the costs of labor that include maintenance, gardeners, maids once people move out, and many others. This is the underlying reason why there is such a cost gap between the co-operatives and the residence halls.
Bottom Line: The co-operative student-housing model is a great living alternative for students with tight budgets especially considering the marginal benefits one gains over the minimal marginal costs one pays.
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