A dormitory that opened on UC San Diego's La Jolla campus in 2024 cost $260,000 per bed to build, according to a new EdSource investigation published Sunday, Sept. 20.

The 1,423-bed facility is one of 34 student housing projects California funded under a $2 billion program the Legislature approved in 2021. Across all completed projects statewide, the average cost reached $251,000 per bed, EdSource reported.

Those figures could climb higher. When the state's budget worsened, Gov. Gavin Newsom asked universities to return their grants and instead issue revenue bonds, with the state covering interest. That switch will cost at least 50% more than the original $2 billion in grants, according to the report. The University of California alone estimated its interest payments at $460 million over 30 years.

Michael Bedard, UC's deputy director of state governmental relations, told EdSource that UC campuses sit in some of the priciest real estate in California. "The median home price is like a million dollars or more in every other UC town," he said.

The high costs reflect a statewide pattern. Constructing market-rate housing in California costs more than twice as much per square foot as in states like Texas, according to a RAND study cited in the report. Between 2018 and 2023, seven UC housing projects faced legal challenges under the California Environmental Quality Act, leading to delays and rising construction and legal expenses.

UC housing is oversubscribed

Last fall, 9,900 UC students sat on waitlists for campus housing, according to data the UC Office of the President provided to CalMatters. The average occupancy rate across UC's housing network stood at 104%, meaning rooms built as doubles were being used as triples.

About 1 in 4 California university students recently reported feeling unable to afford housing and utilities, according to a California Student Aid Commission survey cited in the EdSource report.

UC plans to add roughly 15,000 student housing slots by 2030, CalMatters reported. Housing plans approved by the UC Board of Regents in the past four years range from $200,000 to $300,000 per bed.

Proposition 1 and the funding gap

Voters will weigh in Nov. 3. Proposition 1 would authorize $11.25 billion in general obligation bonds for housing, with $350 million split between UC and California State University for affordable student housing, according to the Legislative Analyst's Office. The LAO estimates that money would fund about 1,200 beds statewide.

Kashia Amber Arnold of UC Santa Barbara's Blum Center on Poverty, Inequality, and Democracy told EdSource that without significant new funding, universities will remain limited in how affordable they can make student housing.

A 2025 California State Auditor report found the funding changes delayed construction on some projects, and delayed projects now face higher costs due to inflation. Proposition 1 goes before voters on Tuesday, Nov. 3.