Campus too expensive?
Universities try to control costs by modifying their facilities and abandoning premises. However, facilities are more than a simple expense – they either help or hurt academic work.
Text terhi hautamäki images samuli siirala English translation Marko Saajanaho
University lecturer Sari Yrjänäinen works at the University of Turku’s Department of Teacher Education in Rauma. Her workspace is in an open floor area shared by ten people, with little space for storage. The natural sciences and maths teacher stores test tubes, various cans, and materials in 45-litre plastic boxes underneath her desk and carries them to various places as needed.
“During internships, it can get quite silly here. We try to find empty spaces somewhere for guidance and take turns using them. I have held meetings in the lobby and gateway”, Yrjänäinen describes.
A facility programme is ongoing at the University of Turku. Some premises are abandoned while others are repaired and upgraded, which means moving to multi-purpose facilities and sometimes leaving your own workspaces behind. The Turku Teacher Training School is also slated to move to the university campus in the autumn of 2028.
“All that requires renovations and a massive amount of flexibility from the staff. This inevitably causes disruption, and no price tag is really put on that”, Yrjänäinen says.
According to Yrjänäinen, the staff understands the situation. They have also been stressed by change negotiations. If the university must save some money, they would rather cut facilities than personnel.
“Nobody thinks this is being done out of spite. But policy through dictates and a lack of inclusion tend to cause the biggest resistance and anxiety no matter where you are.”
Meetings are still needed
Research Manager Anna Karhu has also seen the office facilities of her workplace at the University of Turku School of Economics get reduced by nearly half in the last year.
The School of Economics chose to give up a building element that required extensive renovations. Workspaces have been reduced by a hundred. Personal offices have made way to shared rooms. There are also unnamed workspaces. Facilities for student meetings are reserved through a system.
Karhu considers the savings necessary, but the staff were stressed by the quick change.
“We had all these horror scenarios. What kind of facilities must we work in, and is there going to be a place for everyone? Maybe everything actually went better than expected. It is painful to the staff when you have to change your working methods. Change is beneficial to some, whereas others feel they are giving something up.”
”If changes are made just to save money, it may lead to other expenses. External communication and communication with staff are very important.”
Anna Karhu, Research Manager, University of Turku School of Economics
Karhu hopes future changes are carefully, with the functionality of the facilities taken into account.
“If changes are made just to save money, it may lead to other expenses. External communication and communication with staff are very important”, Karhu says.
Sari Yrjänäinen points out that the facility discourse doubles as pedagogical discourse – what should university education be, exactly?
“If it is seen as online discussion between some talking heads, video conference connections certainly work. But if I want to show how fraction cakes work or teach physics student project planning, I need the tools, the space, and the face-to-face meeting.”
Some are perfectly content with remote work or sharing spaces. However, an open floor space or a noisy hallway is less than ideal for meeting with students. Amidst pressure to save money, staff members have wondered if the university overpays for its facilities.
“Out of frustration, some have suggested that perhaps the department could put their own facilities up to tender. But that would just turn into small units faffing amongst themselves individually. The end result might just be going out of the frying pan and into the fire”, Yrjänäinen reckons.
Repairs raise rent
The University of Turku situation is far from exceptional. Other universities also have ongoing facility programmes and campus development projects in progress.
University of Turku Vice Rector Kalle-Antti Suominen tells us the facility programme is brought on by both cost-cutting goals and changes in the nature of university work itself. Online learning is replacing mass lectures, remote work is here to stay, and rotating contact and remote meetings requires different facilities.
The university’s facilities encompass 200,000 square metres, which is meant to be reduced by 15 percent by the end of 2027. By this point, they have already reduced the area to slightly over 190,000 square metres.
“We have to remember that a reduction in square metres does not reduce costs at the same rate. New construction and renovations increase costs.”
Unrenovated facilities are inexpensive, but their renovated counterparts can cost nearly 30 euros per square metre if laboratory spaces are included. On the other hand, energy efficiency can be increased in the process.
Long leases are binding
A common problem faced by universities is long leases they are unable to get rid of. For instance, the University of Turku would gladly part with their premises in the ICT-City building in Kupittaa, leased by Turun Teknologiakiinteistöt.
78 percent of the university’s facilities are owned by University Properties of Finland Ltd (SYK). Several universities are shareholders, and Suominen himself is an SYK board member. According to Suominen, the advantage of shareholding is SYK’s flexibility as a lessor.
“SYK can be negotiated with, and they allow subleasing, which not all lessors do. That is why this is not just a question of price”, Suominen says.
Laboratories getting expensive
University of Eastern Finland professor and Deputy Head of the Department of Chemistry Juha Rouvinen is critical of SYK shareholding and the situation in which campus properties must generate profit whilst universities struggle with their finances. The profit is partially returned to the university as dividends later, after taxes, but the share of the largest owner – the government – is sliced off.
Rouvinen has calculated from the university’s annual account that the average monthly rent per square metre for facilities is 18 euros. The average rent per square metre for all SYK properties is 14 euros.
Faculties manage their own finances within universities and pay rent internally to their university. The rent for the Department of Chemistry’s special laboratories can cost up to 50 euros per square metre. Natural sciences are often hit hard by facility expenses. The research section of the university funding model does not consider the differences in cost structure between fields.
“Our department basically operates at a loss at all times because slightly over half of the basic funding from the university goes into rent. We cannot get external funding so effectively that it would cover our losses. This limits the development of the department”, Rouvinen says.
He has begun wondering whether SYK shareholding is beneficial to the university. On the other hand, universities are bound to facilities built for their specific functions, so simply checking the market for alternatives is not feasible.
“We live in an open but closed economy. My understanding is that managing its own properties would be beneficial to the university”, Rouvinen says.
The University of Vaasa left SYK
Some universities have come to the same conclusion. In 2019, the University of Vaasa took ownership of their campus properties, having previously been an SYK shareholder.
In 2017 and 2018, the university first turned to SYK to look at upgrading their facilities. The required investments seemed expensive, which led to the university considering ownership of the facilities. The situation was resolved when the city of Vaasa joined the property company. University of Vaasa Director of Finance Harri Salmela says this was a good solution.
“Overall, yes, absolutely. Let’s say this is not more expensive this way. We have more opportunities to influence things and more room for flexibility.”
However, Salmela informs us the financial benefits are not quite what was assumed in the beginning. The investments grew from the early reviews. The pandemic changed the way of thinking regarding facilities. It is not simply cost-cutting, as lab areas have also been added to implement the university’s strategy. Post-COVID facility use is still taking shape.
”We have hit the brakes a little. The next academic year gives us a clearer view on how facilities are used and how much of them we can give up.”
Harri Salmela, Director of Finance, University of Vaasa
“We have hit the brakes a little. The next academic year gives us a clearer view on how facilities are used and how much of them we can give up.”
UEF Director of Administrator Tuomo Meriläinen consider SYK shareholding the best solution. Ownership would bring major financial responsibilities and investments.
“A billion-euro property company has vastly more negotiating power when it comes loans than a single university does. If we owned the properties, we would have to hire quite an unreasonable number of staff to run the facilities.”
UEF is also looking at facility reductions. For example, the use of costly laboratory facilities is synergised wherever possible. According to Meriläinen, however, the primary goal of the campus project is to develop future work and study environments. He says COVID caused a horrendous amount of human tragedy, but it happened to hit at a suitable moment for campus development purposes and changed the ways of thinking.
“Of course, it is still important to be physically present, and research materials and literature must be available. We must be able to keep the campuses alive”, he says.
Director of Finance
University Properties of Finland Ltd is familiar with universities’ financial concerns. Facility programmes result in having to find lessees to occupy the premises no longer used by universities or consider selling the properties. When renovations or new construction are needed, SYK handles the investments.
“Underutilisation is a central issue to us. We have about a million square metres in total and underutilisation of 55,000–60,000 square metres at the moment. In the future, that can increase significantly”, says SYK CEO Sanna Sianoja.
SYK’s rental level has been criticised from time to time. According to Sianoja, SYK has no need to collect profit and, unlike other real estate investors, they do not try to maximise rental square metres. The goal is to have the universities use only the required square metres in a cost-effective manner.
“Sometimes, when these discussions take place, it is a question of looking at the universities’ internal rent versus the rent SYK charges from the universities. A company such as ours has absolutely no need to collect anything extra, because everything under the line is returned as dividends. Our only goal is to be able to run this operation.”
She says criticism is welcome and they are happy to consider alternative approaches when necessary.
“Investments and operational models must be as cost-effective as possible, so the universities do not incur any extra costs.”
Facilities are not just a necessary evil
Facilities are often considered an expense. According to university lecturer Virve Peteri, there is a problem if we fail to understand they are an important productivity factor.
“Facilities help or harm our work. Do we want to support the core mandate of universities or hinder it?” Peteri asks.
Peteri, who works at the Tampere University, has studied organisations’ facility changes, which usually mean transitioning into multi-purpose facilities. Research data is not on the side of open floor plans. In changing workspaces, the environment has not been adjusted for personal ergonomics. Those who work in open spaces fall ill more often. Materials cannot always be retained due to data protection law or the financier’s conditions.
A couple of years ago, Peteri told Acatiimi about the Tampere University campus project. At the time, she was disappointed because the expertise of researchers was ignored by the working groups. She says the situation has improved since the previous rector was replaced, with the current rector genuinely listening to the community.
“Right from the start, we tried to tell them to give us the power – we know what this work is and what it requires. That was quite a long and rocky road”, Peteri says.
In 2022, the majority of respondents to the university’s work environment survey emphasised that academic work requires peace and a quiet environment.
“It was downright wonderful to discover how many talked about how important an innovation a door is.”
The first spatial models were, as Peteri puts it, “shocking open floor solutions”, but they have since been modified. The staff pointed out how impossible it would be to guide a thousand students on premises with four spaces available for guidance. They also nixed the idea that spaces for guidance sessions should always be reserved using a system.
“If I had to find a space for every guidance meeting somewhere on campus and see how to get there in time, as a personal study plan advisor I would spend all my days doing that. The most cost-effective way is to meet with students spontaneously in my own office.”
Peteri says people are flexible when needed and ready to share spaces. Many are also fine with remote work, but it can prevent young researchers and people moving from other countries from socialising in the university community, and a quiet workspace at home is not possible for everyone. When considering facility changes, it is important to listen to people at the university sharing their expertise on their own work. “If they are not listened to or changes are not based on researched data, that can erode trust.”
Whose properties?
University Properties of Finland Ltd owns 8 university properties in ten locations. A third of the company is government-owned. SYK also leases property to schools, wellbeing services counties, and businesses.
Some universities own their facilities via proprietary companies, and the University of Vaasa co-owns Vaasan Merikampus Oy with the city of Vaasa.
Universities also lease facilities from other companies. One active campus investor is Hemsö from Sweden. Hemsö has acquired, among others, the Paavola campus in Lahti; the University of Helsinki’s Siltavuorenpenger 10 for gymnasium use; the LUT University’s Tieto-Sähkötalo; and various University of the Arts premises. It also bought University of Vaasa stock from SYK.
