Students stuck with the bill

– I told you so! By building that kind of high standard accommodation, you reduce the possibility of government funding and undermine the purpose of student accommodation, Benjamin Jonsrud of the political left wing group Venstrealliansen says.

On 16 February last year, Universitas reported that the construction of Pilestredet Park started without government funding of SiO. The financing was meant to be covered by means of a loan over 50 years from the Norwegian State Housing Bank along with a significant hope of government funding. This week, it was made clear that the Ministry will not be granting SiO anything this year either.

– The result will be steep rents. Taking a low interest rate level into consideration, the rent will be a minimum of NOK 3000 on top of electricity bills, leader of the Velferdsting (VT) Øivind Gjengaar says.

But the prognoses are gloomier than that. In September, the interest rate level was at a record low. Since then, the Norwegian Central Bank has already increased it twice. This leads to corresponding interest rate increases in the Norwegian State Housing Bank, and thus a more expensive loan for SiO.

– Too expensive

Jonsrud and social democrat Egil Heinert, who is now vice-executive of VT, predicted a possible price boom. Both of them voted against the start-up of the construction until the government funding was guaranteed because they felt that the flats would be too expensive for students.

– SiO is supposed to be a cheap alternative to sky high rents in real estate. More than NOK 4000 for 17 square metres is not cheap. I doubt anyone would want to live there, Heinert responded. Today, he does not wish to comment on the matter.

Leader of VT at the time, Inge Carlén, disregarded Heinert’s claim, and supported the construction without any guarantee of funding.

– We have to get government funding, period! Preliminary reports indicate that the price level will remain at an affordable level for students. And we will deal with the problems as they come up, Carlén said last year.

The problems have now come up.

– Nobody could predict that the government would be so slick, is Carlén`s response to Universitas today.

Student politicians disagree

Leader of the General Board of SiO, Silje Winther, is cool as a cucumber about the lack of government funding.

– I think the flats will be attractive. They are proper flats of high standards, she says.

– But isn’t there a risk of the flats becoming too expensive?

– This type of accommodation will be suitable to those who would like to put a little extra into their flats. It will not be a lot more expensive than other popular student halls such as Vestgrensa and Siloen (Grünerløkka), Winther says.

– I can see the argument, but I don’t think SiO should offer accommodation according to self-providing principles, Jonsrud says, who points out that you could have built a whole lot more for the same price, and in addition increased the possibility of government funding if you hadn’t started the construction in Pilestredet Park.

– The last couple of years, SiO has only built luxury flats. The main idea behind student accommodation is that you are supposed to force a reduced price level through occupying a relative piece of the market. This is far from what is currently done, Jonsrud says, who thinks we are currently competing with the private market as regards prices and under the same preconditions.