Harsh economic times in the mid to late 70's drew campus development to a standstill. There was little or no money from the State for classroom buildings, and declining enrollments contributed to a halt in residence hall construction. On the plus side, the University was able to re-use its assets by converting Moore and Ellsworth Halls from dormitories to office buildings.

Off-campus properties, meanwhile, were growing significantly. In 1975 the State of Michigan deeded over the former State Psychiatric Hospital farm on the west side of Kalamazoo, at the northeast corner of Drake Road and Parkview Avenue. The tract on the northwest corner of Drake Road and Parkview Avenue, the Colony Farm Orchard, was acquired by WMU in 1977. Together with the Lee Baker Farm, acquired by the University in 1959, these areas became known collectively as the University Farm.

Since being acquired for use by the State in 1887 the Hospital farm had been known as Asylum Farm or Asylum Lake Farm, although prior to this it was called Fair Oaks. In addition to housing several hundred patients and staff, at its peak of operations the property included 300 Holstein cows, a swine piggery, gardens and orchards, a sewer system, a water tower, and a power plant. By 1958 the livestock and farms had become an economic burden and were phased out. In 1969 the remaining patients and staff were moved to the State Hospital facilities on Oakland Drive in Kalamazoo.