The city of shrinking spires

When it comes to affordable housing, Oxford falls far short of its world-class counterparts. Researchers and academics at the University of Oxford face some of the highest housing costs in England and elite academics. Although notoriously an expensive city, Oxford also has an elite and prestigious reputation. One would expect that the staff of one of the oldest universities in the world, where weekly three-course meals in ornate halls are the order of the day, could afford to live in the ancient city. That’s not the case.

Oxford’s severe lack of affordable housing has been highlighted in recent years by city councillors, the Oxford branch of the University and Colleges Union, university staff and administrators. The university and other groups are taking steps to improve housing and commuting services. However, when compared to other comparable institutions, particularly in the US, Oxford lags far behind when it comes to affordability – for reasons that go well beyond housing politics.

Housing costs are high across the industry

The life of an academic at Oxford or Cambridge and that of a person holding a similar post at a top Ivy League school or elite research university like MIT or Stanford differs in many ways. Those working in the UK generally receive larger benefits such as maternity and parental leave. In contrast, salaries and scholarships are often more generous in the US starting at graduate level. However, there is one area where the UK’s top universities, and Oxford in particular, consistently lag behind their American counterparts: housing affordability.

Rents are high in university towns. An analysis of rents in elite university districts in the UK and US (Princeton, Harvard, Yale, MIT, Stanford, Oxford and Cambridge) shows both Oxfordshire and Cambridgeshire at the cheaper end of the scale. In April 2022, the average monthly rent for a studio apartment in both counties was £550, a far cry from the £1630.2 it would take to live in a similarly sized apartment in Santa Clara County, home of Stanford University . However, larger two-bedroom apartments in Oxford are more expensive than Cambridge and are close to prices found near Yale University in New Haven. In terms of property prices, Cambridgeshire is the cheapest of these counties. The second lowest is Oxfordshire, where the average house costs £62,008.40 more than Cambridgeshire. Despite this, housing close to these UK universities is cheaper than housing close to American universities.

In connection with the housing markets of the respective countries, however, Oxford does not appear to be comparatively cheap. The rent for a two-bedroom apartment in Oxfordshire is about 41.7% above the English median, while rents in Mercer County (Princeton University) and New Haven are 27% and 13.2% above the US national average, respectively . House prices in Oxford are 15.8% above the UK average, not as big a deviation as Santa Clara, which averages about 210% above the US average but is still higher than a home in New Haven, which is 10% above the national average.

The fact that Oxford is so expensive by British standards sets it apart from a handful of other elite universities. But even facilities in areas where rents are more than double the national average can remain more affordable because of staff housing subsidies offered by universities.

Other universities offer grants to compensate for housing costs

Oxford’s near-zero housing benefit puts the university just behind its top-notch peers. While it has a portfolio of university-owned rental properties, it does not offer a university-wide home purchase or rental advantage. Some colleges offer co-equity programs and some short-term rental housing, particularly for graduate students, although this system appears to be severely underdeveloped compared to other elite universities. Stanford, on the other hand, offers five different loan programs to academics and has numerous rental options for postgraduates and beyond.

Lack of support should not be viewed as a purely British phenomenon. Many London universities offer generous relocation allowances. UCL is even offering home loans of up to £50,000 to certain eligible employees.

That being said, Palo Alto and London are extremely expensive housing markets, so some level of support should be expected to be offered to attract and retain talent. But even cheaper areas like Princeton and New Haven offer far more housing benefits than Oxford. At Princeton, the average home price is about 5.2 times the base salary of academic staff, and at Yale, 4.5 times. At Oxford, a clerk working the lowest tier of a full-time academic position might expect to be paid a little more, 6.4 times their average home salary, but these figures still don’t differ that much. Yet both Yale and Princeton have established loan and purchase programs in which the university pays part of the cost of buying a home, either by buying the home or paying directly to eligible employees. Again, these programs are not new; Yale is over 28 years old.

Even Cambridge seems a little ahead of Oxford on housing assistance, having recently set up its own community of affordable housing for its staff in Eddington. Some flat shares here have rents, including utilities, for as little as £650 a month.

The problem at Oxford

Housing prices and a lack of university support combined to create the problem, but there are other deeper structural issues within the university and the city that need to be addressed. First, land in Oxford is expensive. Even more so than in the United States, peripheral cities like Oxford and Cambridge lack arable land. Much of the land outside the current urban core is protected, part of the “Green Belt”. This ring-shaped area includes many scenic forests, rivers and flood plains, as well as important farmland. However, it also includes motorways and open areas which, although they have no particular natural significance, are nevertheless regulated restrictively. Consequently, new exterior development around Oxford is often difficult.

And then there is the question of the foundation. Its endowment of over £6 billion would rank it twenty-fifth in the US, some £15 billion below Princeton, the second poorest university examined in this article. It’s also around £1 billion lower than Cambridge’s. This lack of resources is long-standing and is one of Oxford’s greatest weaknesses, partly inherent in the structure of the university itself. Each college has its own endowment, strategies for the growth of that endowment, and fundraising departments. Additionally, American universities in general have a greater history of alumni philanthropy, with some Ivies such as Princeton boasting an alumni giving rate close to 50%. “Old members” give generously in Oxford, but not on the same scale as in the US, as donations are shared between college and university initiatives.

While a large endowment doesn’t easily allow a university to spend huge amounts of money on projects that need attention, it does offer flexibility. A smaller foundation forbids Oxford from specifying the types of housing benefits that wealthier universities in the United States can offer their employees. Also, the relative lack of funds contributes in part to the pay gaps we see between British and American institutions. However, as the UCU argues, the university is obligated to pay its staff more. David Chibnall, Vice-President of the Oxford Branch, says: “The first thing the university could do is ensure that pay and PGR [postgraduate research] Grants keep pace with housing costs.”

Efforts to improve the housing shortage

The university is increasingly acknowledging both the lack of endowments and affordable housing. Prof Dame Louise Richardson, former Vice-Chancellor, has acknowledged Oxford’s comparative lack of resources and has included steps to increase the university’s endowment in her strategic plan.

In this strategic plan, the university also aims to build a thousand new subsidized housing for university staff. To achieve this goal, the university has entered into a development partnership with L&G. Projects to date include the expansion of the Begbroke Science Park, which current Pro-Vice-Chancellor Prof Irene Trace highlighted in her recent inaugural speech. She reiterated that the university “want[s] more to do’ and the Begrbroke development, currently at the planning stage, will ‘relieve pressure on the city’s housing stock and public services’. The university and colleges have also made significant investments in new housing, which Dr. David Prout, Pro-Vice Chancellor for Planning and Resources, “has eased the pressure on the local housing market”.

Individual college lots, such as St. John’s lot in North Oxford and Christ Church’s Bayswater Brook area, will also be converted into innovation and living spaces. In the case of St. John’s Oxford North, 35% of these units are also designated as affordable housing. As well as developing universities and colleges, Oxford City Council is also promising to build 1600 new affordable homes by 2026 and claims they are “on track to exceed that target”. The council adds that their local plan “enables employers to provide affordable funds to workers

Apartments in specific locations that they own within the city”. This not only benefits the university’s staff retention, but also relieves social rented housing.

Over the past decade, the university has also dedicated resources to reducing commuting costs, particularly for those using sustainable modes of transportation. This allows staff to afford the cost of commuting from the less expensive Oxfordshire outskirts. Benefits include bike purchase credit, building showers in department buildings, and subsidizing new fleet electric vehicles. However, the program alone is not a solution, and many American universities have similar programs coupled with cheaper housing.

A better equipped future

Greater housing and new schemes to help commuters, if implemented correctly, will reduce some of the cost of living and working in Oxford. These will come with a hefty price tag and are not the university’s only priority. However, this crisis, which is inseparable from Oxford’s financial strength, raises a more troubling question: Can the old, tutorial-based university survive in the modern world?

This is not a new concern, given that there have been calls for 25 years to increase endowments at both Oxford and Cambridge on the model of professional investment management at many American universities. However, like easing the real estate crisis, building a foundation that can match the size of American elite universities will take decades.