UConn is changing the method by which it leases out 20 houses it owns near the Storrs campus, pooling the rental income and dedicating it to the properties’ upkeep so the rental program is self-supporting.

The procedure is one of many entrepreneurial steps that UConn has taken in recent years to make various parts of its operations support themselves financially.

Several other UConn programs also are financially self-supporting, such as student room and board; dining services; and fee-based instructional programs such as Summer Session, Continuing Education, and the executive and part-time MBA offerings.

Like many other universities, UConn owns several houses around the periphery of the Storrs campus that it offers for short-term rent at market rates, typically to visiting scholars or new faculty and staff who need time to find and purchase a home locally.

It is particularly common at universities such as UConn that are in rural areas, where short-term, non-student housing options are less plentiful than near urban campuses.

UConn’s Facilities Operations & Building Services has been absorbing maintenance and repair costs for the 20 rental houses through its departmental budget, both when its personnel did the work and when the University was required to hire outside contractors for specific projects.

Under the new procedure, pooling the rent from the 20 homes and using the revenue for the maintenance removes those costs from that department and, therefore, from the University’s overall operating budget.

Maintenance and repairs at Oak Hill, the university-owned house where UConn’s presidents live, will also be covered by the pooled rent from the other properties, although it does not generate rent itself. The University owns all of the houses outright, so the rental income will go directly to maintenance and repairs rather than mortgage payments.

“This is a perfect opportunity for UConn to make these assets pay for themselves,” said Michael Jednak, UConn’s associate vice president for facilities operations and building services.

“Although their maintenance costs are a small portion of our budget, having the rental properties become self-supporting is both fiscally prudent and in line with our attempts to reduce reliance on UConn’s operating budget whenever possible,” he added.

UConn’s 20 residential rental properties vary in age and size, and are rented for market rates. Most are typical single-family structures, along with a few two-family homes split into apartments. UConn has owned most of them for several decades.

Jednak said the occupancy rate for the properties is usually very high, and that the anticipated revenue in fiscal year 2017 is expected to exceed $300,000.

The maintenance and repair costs per square foot for the properties varies by house and by year, particularly in years when a particular house needs an upgrade such as a new roof, septic system, or appliance replacement.

For instance, UConn recently had to replace the decades-old front and back patios at the Oak Hill property for about $47,000 and $44,000, respectively, because the original bluestone had become irreparably cracked and uneven despite many spot repairs over the years. Those stones were replaced with concrete pavers to cut costs.

The driveway also needed to be removed down to the base, rebuilt, and replaced in a $29,000 project for the same reason, as the freezes and thaws of decades of New England winters had left the asphalt cracked and crumbling.

In addition to the president’s residence, other university-owned houses over the past five years have required some significant maintenance, including: installation of a new septic system (approximately $51,000); new paint and flooring ($33,000); and window replacements ($18,000), to cite a few specific, essential renovations.

“Like any other homeowner, it’s necessary for UConn to make repairs and renovations at all of our residential properties over the years,” Jednak said. “This is as true at the president’s house as it is at any other property we own, including our academic and administrative buildings. UConn is no different than other universities in its duty to properly maintain what it owns.”

One way in which UConn is different, though, is that as a public university, it must follow a complex state procurement process for contractors for large jobs, such as the patio and driveway replacements. All vendors must be pre-qualified by the state, pay standard or prevailing wages, and follow other regulations.

This can often limit the number of bids for projects, especially from smaller contractors, and result in unavoidably higher costs for work at the UConn-owned houses than the amounts paid for similar projects by individual homeowners, businesses, and private colleges and universities.

However, having a self-supporting method in place supported by income from UConn’s rental houses will provide a pool of money from which to draw for those contracts that is separate from the broader budget.

Jednak said the University also does as much work at the houses as possible with its own personnel to limit costs, and that the vast majority of projects such as plumbing repairs, electrical work, and other maintenance is done in-house.

The University may also explore other ownership alternatives in the future, and is reviewing ways in which other universities operate their residential rentals, including cases in which the properties are owned by independent fund-raising foundations that support the universities’ missions.