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UC seeks permission to reallocate student housing debt‑service savings to fund Davis and Santa Barbara affordable beds; LAO, Finance flag process questions
Summary
UC told the budget subcommittee it has debt‑service savings from prior student housing bond sales and requested legislative permission to use those savings to add affordable beds at UC Davis and UC Santa Barbara.
University of California officials told the subcommittee the system has identified debt‑service savings from previously approved student housing bond sales and asked the Legislature to authorize use of those savings to add affordable beds at UC Davis and UC Santa Barbara.
Seiya Vertanen (UCOP) said UC campuses added more than 25,000 housing beds over the last decade and that recent bond sales produced savings that could expand affordable beds. UC requested authorizations to add an estimated 216 affordable beds at Davis (available fall 2027) and 240 affordable beds at Santa Barbara (available fall 2029) using the unspent debt‑service savings. "The state funds allow for a smaller share of the project cost to be passed on to students as rent," the UC witness said.
The Legislative Analyst’s Office told the committee it had concerns about UC using savings before legislative approval. The LAO said the eight projects originally approved by the Legislature have annual debt service of about $44.5 million, roughly $6.2 million below the ongoing general fund appropriation the state provided for those projects; UC’s request would use that differential to underwrite the Davis and Santa Barbara projects. "The legislature needs to decide what it wants to do with that $6,200,000 differential," the LAO said.
Department of Finance witnesses noted the governor’s budget maintains the $50.7 million ongoing appropriation for student housing debt service and said any decision about reassigning savings or approving additional projects would be considered during budget negotiations. LAO staff and Finance both said the timing of UC’s notice (after the governor’s budget release) created a constraint on immediate administrative action and recommended the Legislature weigh programmatic priorities against the state’s broader fiscal condition.
UC officials said the Davis project is already under construction and that reversing course would eliminate the affordable beds; UC apologized for moving forward before legislative approval and asked for legislative permission to proceed so students would not lose planned housing openings.
