Why the Campus Building Boom May Turn Out to Be a Bust

In 2015, colleges and universities in the U.S. spent a record $11.5 billion on construction for 21 million square feet of new space. A Boston architect soberly calculated: “The space per student has in some cases tripled since the 1970s . . . Colleges have been prodigal.” Is the need for more space real, or are we experiencing an “academic building boom” as a result of what Alan Greenspan would call “irrational exuberance” on the part of too many giddy or inattentive college presidents, chancellors, trustees, and donors? As irrational exuberance led to the stock market bubble bursting in 2001, a disaster just as painful could be in store for our nation’s colleges and universities.

Let’s start with the matter of price. Over the expected lifetime of a building, an institution can expect to pay twice the initial cost of construction to maintain it. Even if construction is entirely donor funded, a new building may turn out to be the gift that keeps on taking, drawing on increasingly scarce operating funds that might otherwise support mundane but critical functions like teaching, instructional materials and student advising. And, of course, checking the upward spiral in the tuition that families and taxpayers fund may become a forgotten goal.

What is the ROI for an institution and for student outcomes when considering the construction of a new laboratory or classroom—which have plausible claims to the core academic mission of a college—let alone an $84.75 million lazy river with the initials of Louisiana State University, paid for with student fees, or a $55 million recreation facility just for Clemson football players? Despite the hefty price tag colleges pay to build and maintain facilities, many institutions are content with quite inefficient use of existing infrastructure. For example, the use of classroom seats and lab stations at public universities in South Carolina dropped from 53% of the total available in 2012 to 50% in 2015 and to 49% in 2016.

Or witness the painfully honest disclosure of Pennsylvania State University in its 2009–2014 Strategic Plan, “Priorities for Excellence”: “The University has invested heavily in both the construction of classroom and laboratory facilities and the renovation of existing facilities. Too often, these facilities are not fully utilized—and the University constructs additional facilities—because of lack of use outside of certain ‘prime time’ class periods or times of the day. Classroom space at University Park, for example, is near fully utilized between 10:00 a.m. and 2:00 p.m. on a typical day, but much capacity is under-utilized at other times of the day. While a notable reduction in classroom utilization has occurred at 8:00 a.m., in response to student (and some faculty) preferences, mid- and late-afternoon scheduling remains significantly lower.” This has not been an isolated phenomenon in the world of higher education.

Gene Powell, chairman of the University of Texas (UT) Board of Regents from 2009–2015, recounted: “I asked the Board’s Executive Vice Chancellor of Academic Affairs to study facility utilization at UT Austin. He found that between the hours of 7 a.m. and 7 p.m., Monday through Friday, the UT campus classrooms are utilized 42% of the time. The laboratories are utilized 25% of the time. Think if we were a Fortune 500 company with a facility that size and we only utilized it 42% of the time, we’d all go broke.” As his board colleague Wallace Hall remarked: “I know of one school in particular. On Friday, shoot a cannon through the hallways, and you would not risk hitting anyone.”

It’s not much better to the east of Texas. Florida’s Office of Program Policy Analysis and Government Accountability reported to the state legislature in February 2019 that, statewide, just 43% of public university classrooms were in use between 8 a.m. and 8 p.m. throughout the week. And on Fridays, only 21.8% of classrooms were in use. (This problem is surely not limited to Texas, Florida and South Carolina; to their credit, these states have admirable laws requiring the disclosure of this information.)

But herein lies a tale of woe for employers. If college is, as we are told, preparation for a career, then a college day that begins at 10:00 a.m. and ends at 2:00 p.m., with an extension of the weekend from Friday through Sunday, is a joke. Limited class time offerings are often at the behest of faculty, who have become accustomed to a cushy schedule, so colleges are not even preparing their own employees for a normal career.  

The good news is that it does not have to be this way, and there are savvy schools and discerning legislatures pushing back and setting up new paradigms. My next post will provide some examples. In the meantime, trustees, donors and alumni should ask their college’s CFO for a building utilization report and fulfill their fiduciary duty by carefully scrutinizing any proposal for capital projects.