On the southeast side of the University of Oregon campus, an enormous seven-story building is rising above the low-density housing across the street.
The surrounding roads and sidewalks are closed off, while a crane hangs over the site, carrying the university flag.
In May of this year, UO President Karl Scholz announced a budget deficit of $65 million, citing anticipated enrollment decreases.
And yet, the building, a new 800-bed residence and dining hall, is one year from completion. It’s part of UO’s two-building, $235 million Next Generation Housing Development Plan.
With about 500 fewer incoming freshmen than the previous school year, most of which are non-residents, the tuition revenue that contributes 77% of the university’s general operating funds will decrease.
The uncertain financial impact of the “next generation” of UO students has caused numerous faculty layoffs and a hiring freeze.
At the same time, a multi-million dollar dorm is being erected in their name.
How can these two things be true at once?
The Next Generation Housing Development Plan
Schematic design for the two-phase plan began in December 2024, with construction beginning last summer.
Michael Griffel, the Director of Housing and Associate Vice President for Student Services and Enrollment Management, said the project was the result of a question: What does the future of housing at the University of Oregon look like?
“We were looking long term. So, what in 20, 30, 40, 50 years the university could need, and what kind of spaces?” Griffel said. “So we looked at first-year students, other undergraduate students, students with families, and graduate students. And so, the big plan includes housing for all of those groups.”
The first phase would focus on first-year housing, while the second phase would prioritize returning students.
But, because of low enrollment, the second phase of the project will not be completed in time for the Fall 2028 term as planned.
“We have to see a little bit more of where the enrollment trend is. Is it going to tick back up a little bit? Is it essentially going to stay flat?” said Mike Harwood, the Associate Vice President for Campus Planning at UO. “That will have a lot to do with when we pull the trigger because we still have to finish the design. It’s not ready to go yet.”
Some neighbors of the project have pushed back on the size of both buildings and their impact on the character of the area, to no avail.
In May, Eugene City Council approved land-use changes that allowed the university to expand the East Campus area.
And, the timing of the hall’s construction has raised questions about its necessity and financial demand.
Harwood said, for anyone looking from a distance, that confusion is understandable.
But, he said, people in housing and campus planning must consider multiple elements to justify the project and ensure its efficiency.
“It's just not as simple as we think,” he said.
The funding question
The project is funded entirely through the room and board fees paid by students who choose to live in university housing.
The funding model isn’t unique to this project. In fact, room and board fees pay for all housing-related costs on campus.
The university borrows money through loans or bonds to pay for construction, then uses the revenue from housing fees to pay the loans back.
No state grants, tuition revenue, donations or other funding sources are used.
The budget experiencing a deficit is the university’s Education and General (E&G) fund. That fund is made up of 77% tuition and fees, with the rest coming from state appropriations, investments and other revenue.
Harwood said people observing campus construction can misconceive that UO is using money it claims not to have, but each university fund is used for specific expenses.
“When I give my money to the university, I give it for a specific thing, and then you can't use it for anything else,” he said.
That means room and board fees also aren’t used for other kinds of construction on campus.
The money from room and board is reinvested directly into housing and dining operations, including maintenance, custodial services and paying housing and dining staff.
“Anything that is above break-even goes into reserves to do maintenance repairs,” said Griffel. “Anything that is below obviously has to be made up for.”
What would making up for a funding shortfall look like?
“It would mean having to do reductions in expenses,” Griffel said, like using cheaper building materials or changing design elements.
The affordability problem
One of the focuses of UO Housing, Griffel said, is cost efficiency – both in building the Next Generation project and convincing students to live there.
“Affordability is the highest priority and very, very challenging. Everything is so expensive these days,” Griffel said. “We work really hard on every element to have it be as affordable and as high quality.”
But affordability can mean different things for different people.
For Harwood, as an architect, housing affordability means economical building materials and efficient construction efforts.
For Griffel, housing affordability means making rooms adaptable for the amount of incoming students to adapt to enrollment fluctuations.
“When designing or conceptualizing the Next Generation building, it's looking at what the demand is for returning students,” he said, “so that we have the right number of flexible rooms that could be assigned as doubles when occupancy or enrollment is lower, and can be assigned as triples when occupancy is higher.”
But for students and their families, housing affordability means, well, being able to afford housing.
At UO, the estimated room & board cost for first year students is $18,183 for the 2026-2027 school year.
That’s about $2,000 a month for housing and food over a standard nine-month academic year.
For a student who would otherwise spend $600 on groceries each month, a residence hall would cost the equivalent of a $1,400 apartment.
And a deeper look at pricing per dorm reveals that newer dorms can cost upwards of $23,000 a year, even with the smallest meal plan available.
Dr. Amy Cox is the Director of the Office of Analytics and Strategy at the Higher Education Coordinating Commission (HECC), a state agency focused on higher education research, funding and policy.
She said for in-state students looking to go to public universities, housing is the greatest financial burden.
Research from the HECC estimates that half of in-state students who apply for financial aid can’t afford the cost of attendance with those resources.
For out-of-state students, that cost of attendance is up at least $30,000 a year.
While students receive financial aid from the university for tuition and fees, UO doesn’t offer housing-specific aid. Residential Assistants receive discounted housing, but must be accepted for the position.
“There is ongoing conversation around affordability in a number of ways, including basic needs at the legislature, at the HECC,” Cox said. “Those state dollars to support those areas are always needing to be balanced against lots and lots of other state needs.”
The enrollment decline
Of the 500 fewer incoming first-year students for the 2026-2027 school year in comparison to the previous year, more than 400 are out-of-state students.
Those students pay $30,000 more in tuition than Oregon residents, meaning their financial contributions to the university are more significant.
That drop of 400 nonresident students equates to about $26 million that the university won’t see in its E&G and Room & Board funds this year.
UO’s high cost of attendance – especially for nonresidents – could very well be one factor for lower enrollment.
“Oregon tends to be a somewhat higher-cost state than some of its western neighboring states in terms of college and university cost,” Cox said.
That’s for a few reasons. State investment in UO is the lowest of Oregon’s public universities per resident student.
Oregon also receives the least public university state appropriation of its western neighboring states. So, tuition and fees are increased annually, partially to make up the difference.
Another factor of lower enrollment is a decrease in the youth population. Birth rates have declined steadily in the United States, hitting an all-time low in 2024.
The population of people under age 24 is expected to decline every year for the next three decades.
“That is a significant change in the population that will be affecting virtually every state, and it will definitely be affecting Oregon,” Cox said. “The projection is that between the class of 2025 and the class of 2041, essentially a 15-year span, the number of high school graduates will drop 13% across the country, 19% in Oregon.”
Last year, more than 40,300 students graduated from Oregon public high schools. A 19% decrease would mean almost 8,000 fewer students graduating from those schools and, for some, attending public university.
Those downward trends of birth rates, high school graduates and public university enrollment have been anticipated, Cox said.
“Demographers have been talking about this for quite a while, right? They're the ones who have been tracking it,” she said. “We've been talking about this at sort of increasing volumes for I would say at least the last six or eight years.”
The need … if any
With enrollment in decline, some might wonder where the need for first-year or other student-related housing is coming from.
Harwood said some demand comes from recent dorm closures and demolitions.
In an attempt to centralize first-year students and create more graduate and family housing, the university decided to close Barnhart Hall in Fall 2028 to coincide with the completion of phase 2 of the Next Gen plan.
Campus planning would then work to transform Barnhart into university graduate student and family housing.
Griffel said students assigned to Barnhart Hall and Riley Hall, which are located on the far western end of campus, “sometimes feel separated from incoming students because it's physically non-contiguous with campus.”
But in June, Housing decided to expedite Barnhart Hall’s closure and leave Riley Hall vacant in case of overflow housing need.
That decision, Harwood said, was because of the enrollment decreases and the upcoming availability of the Next Gen dorm.
Walton Hall and Hamilton Hall, two of the oldest dorms on campus, were demolished in August 2023 and December 2025 respectively.
The area Hamilton once occupied is now being replaced with green space and official beach volleyball courts for the university’s D1 team.
But the housing gap created by both demolitions was mostly filled by the university’s “New Residence” hall.
Another source of housing demand may come from returning students.
Phase 2 of the Next Gen plan is focused on that demographic, Griffel said.
“Slightly over half students that live on campus their first year have expressed an interest or signed up to be on a waiting list to live on campus again,” Griffel said.
Does an interest in living on campus mean students want to live in a residence hall?
“Not necessarily in a residence hall,” Griffel said, “but on campus.”
Living on campus has advantages for students as they’re closer to lecture halls and various dining options. But housing close to the university tends to be more expensive.
And with a variety of housing options in the area, Phase 2 may have some competition.
Once again, Griffel said flexibility can offer an answer to potential demand questions.
“The second phase was conceptualized as being part residence hall, part apartment convertible,” he said. “It'd be very hybrid, where there could be 12 to 18 students who are sharing a kitchen, kind of like an apartment, but they would have individual bedrooms and bathrooms.”
That style of housing has been implemented at the university already.
Yasui Hall was constructed alongside the New Residence Hall in 2023. It includes studios with private bathrooms and four-bedroom units with shared bathrooms and living rooms.
Four-bedroom units are priced at about $11,500 a year without food, adding up to almost $1,300 a month. Studios can be up to $1,700 a month.
Those prices are similar to the costs of apartments on the edge of campus, like Flock 13 and The Chapter, where studios can cost up to $2,000 a month.
But there are some caveats for UO student apartments. They don’t come with in-unit laundry, they feature a small kitchen, they lack a private outdoor space, and they offer no other amenities that sometimes come with off-campus living, like pools, gyms or game rooms.
For Next Gen’s second phase, that could look different. Kitchens would be shared, but community spaces may be more emphasized. Pricing could look different, too.
“(Returning students) don't necessarily want to cook all of their meals, but they want to be able to cook many of their meals. They want something that's a little lower priced than being in a traditional apartment, and they want to have connections to community. So, we think that it would meet students' needs really well,” Griffel said.
The second phase’s cost is estimated, but the design is yet to be finished. And an updated completion date has yet to be determined–a reflection of the uncertain future when it comes to student housing demand.
