The past: Breaking up

Ending the property management contract with College Housing Northwest should save Portland State money, but it has cost College Housing Northwest $400,000 and around 11 people their jobs. Wednesday was the last day of a 38-year property management contract between PSU and College Housing Northwest (CHNW).

Part 3 of 3

Today’s story:After 38 years, PSU has ended its contract with long-time property manager College Housing Northwest. After College Housing Northwest lost $400,000 and some of its employees lost their jobs, the company has moved on to other schools and other communities.

The series: Alongside the departure of College Housing Northwest from PSU housing, the university is working to expand University Housing to accommodate an increased demand for housing close to Portland State. During the first three days of this week, the Vanguard will examine the current state of downtown housing, the future of University Housing, and the history and departure of College Housing Northwest at Portland State.

Ending the property management contract with College Housing Northwest should save Portland State money, but it has cost College Housing Northwest $400,000 and around 11 people their jobs.

Wednesday was the last day of a 38-year property management contract between PSU and College Housing Northwest (CHNW). CHNW has been the property manager of every PSU housing building (there are currently 10) since 1969.

The split with PSU has cut about $400,000 from CHNW revenue this year–half of the company’s yearly revenue, according to Darcy Vincent, president and CEO of Housing Northwest. Vincent said that close to 19 jobs will be eliminated from CHNW, a nonprofit corporation worth $50 million, because of the split with PSU.

Eight people will stay with the company and their jobs will be transferred within the organization. Around 11 people will lose their jobs altogether.

“There are some very valuable employees that are going to lose their jobs at the end of the contract,” Vincent said.

Portland State gave CHNW a one-year notice, the only requirement to end the contract with CHNW, on March 1, 2006. Vincent was hired in February 2006, “three weeks before we got fired.”

PSU students in an urban studies class founded Housing Northwest, the parent company for CHNW, in 1969 so that Portland State could have its own student housing. Vincent said that the PSU-CHNW split has been friendly.

“I feel good about the direction, even though the split’s a little bittersweet,” Vincent said. “Having that disconnect from the university, there’s definitely an emotional thread there too.”

PSU and CHNW set a five-year timeline to split in 2003, because the university wanted to have a more active role in housing management. PSU cut the five-year transition short this year in an effort to save money, according to John Eckman, associate director of auxiliary services.

Eckman said that PSU will save close to $1 million by cutting the contract with CHNW. PSU employed people in positions, and paid CHNW to employ people in the same positions, and also paid CHNW a management fee.

Eckman said the university will save money because it will not pay the management fee and there will be no duplicated positions.

“As housing has become more important to PSU students it’s become more important to the university to play a larger role,” Eckman said.

Vincent said the split, which will cause CHNW to lose nearly 1,400 units of management business at PSU, will have a large impact on the company. The housing management company has been branching out into managing low-income housing because they knew the split was inevitable.

CHNW now has close to 950 low-income units in Oregon, which have brought in about $380,000 of new business. Vincent said the new business has helped compensate for the loss of revenue from PSU.

CHNW will still manage the seven downtown properties it owns, including the Goose Hollow Tower and Plaza. The plaza and the tower, CHNW’s first significant asset purchased in 1972, will now be open to students from any institute of higher education.

Portland State will fully manage the 10 on-campus properties it owns, including the Broadway Housing Building, Ondine Residence Hall and Montgomery Court.

Eckman said that because Portland State now fully operates its housing buildings, the university can keep prices down for students, something he said he thinks CHNW might not have done.

“As the downtown market has become more and more expensive, affordable student housing downtown is important,” Eckman said.”

In fall term 2001, 1,048 students lived in the 928 PSU-owned housing units. Today, 1,594 students live in 1,390 units, according to statistics from the PSU Office of Research and Institutional Planning.

Eckman said the beginning of the Residence Life program has created a greater demand for on-campus housing and more traditional college residences.

A recent auxiliary services proposal would increase rent by 3 percent in eight of the PSU student housing buildings, with a 5 percent increase in the Ondine Residence Hall and no increase in Montgomery Court. The increases would not occur until Sept. 15, 2007.

Eckman said that financial aid packages will be more accurate now that the school can tie in living costs. Rent will now be charged to students’ accounts.

Dan Potter, vice president of operations for Housing Northwest, said he has seen the long-standing relationship between PSU and CHNW in his 33 years with the company. He said the company has grown from an upstart nonprofit started by PSU students to the “pre-eminent provider of housing for students in the Pacific Northwest.”

Because PSU decided to end its contract with CHNW, Potter said the company has had to make changes, including looking in other areas to expand.

CHNW opened the Gem, a student housing building at Oregon State University, last year. Potter said that does not downplay the effect the split with PSU will have.

“It [PSU] was a huge chunk of business,” Potter said.

Potter said there is nothing concrete in the future for CHNW, but the company plans to keep a focus on student housing. Portland State students, he said, are important to their business and they still have services to offer them.

“I think that we are a mission-oriented organization and we will continue to fixate on doing a good job for students,” Potter said.

All contracts with CHNW will last until fall 2007, when PSU will implement a new housing contract.

Housing Northwest began as Portland Student Services in 1969 at Portland State. At the time, PSU was considered to be a commuter campus by the Oregon Legislature, which prevented the university from having student housing.

The urban studies students saved a group of old buildings on campus from demolition by convincing PSU and the state Board of Higher Education to let them operate the buildings as independent student housing. Two $5,000 loans, a board of directors and later a president, helped those buildings, including the Stratford, become a permanent part of PSU.