The costs of campus construction

May 2015

Recently Dylan Matthews got annoyed that someone donated $100 million to Yale to build their third performing arts center.

If you’re like most of my friends, you probably agreed with Dylan that he should have given the money to effective charities instead:

Literally any other charity, save maybe Harvard, is a better choice. Schwarzman could give $150 million to distribute bednets in sub-Saharan Africa, a highly cost-effective way to save lives. He could give $150 million directly to poor people in Kenya and Uganda through GiveDirectly. He could give $150 million to deworming efforts that spare children ailments that can cause immense pain and poverty. He could give $150 million to the Open Philanthropy Project or the Gates Foundation or another group doing careful, rigorous work to determine the best ways to use charitable resources to make the world a better place. He could, in fact, do all of the above because he’s crazy stupid rich.

If you’re like me, you also wondered how the hell it could cost $100 million to build a damn performing arts center. That just seems insane.

So I looked up some construction costs. Unfortunately, I couldn’t find any detailed breakdowns, so I can’t tell where the money goes. But at least I was able to compare their cost per square foot. For reference, this article says average cost per square foot for US commercial construction varies by location from about $115 to $215. By contrast:

These costs are not insignificant: for instance, UMass planned to spend $3 billion on capital projects, between 2013 and 2017 of which $1.7 billion–about half of their 2015 operating budget–would go to new construction. The UC system has proposed $9 billion of new construction over the next 10 years, or almost twice their entire 2013 operating budget. If they could cut construction costs by 50%–totally not unreasonable given the typical US level in the paper I cited–it would eliminate 30% of their estimated shortfall over the next 10 years.

Again, I couldn’t find any detailed budgets, so I have no idea where the extra factor of 2-5 is coming from here. I assume some of it is for fancy academic equipment and some of it is to make them “luxury” or something, but still–it can’t be that much. What on earth is going on? Are these colleges really just burning money?

Edit: partial solution in the comments.

  1. This line originally mistook the USC comparable building for another part of the Lower Sproul plan. Thanks to HL for catching this. 

  2. I initially remarked that this was $3 million per bed, but that’s wrong. Thanks to Greg Colbourn for pointing it out. 

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I initially thought this might be a function of bad governance, bundling, misaligned incentives, etc, w/r/t colleges. If we accept that colleges don’t compete on price then it might make sense that they’re building buildings that are twice as good as average.

However, if the data you used for average commercial construction costs is right, medical office buildings and police stations are both more expensive than college laboratories.

The average college is probably a bad comparison for the flagship schools you’re thinking of, though.



@HL: Good catch, I didn’t think to look at their calculations for other categories. And the dorms are also a lot cheaper on average than the examples I gave:

Maybe you’re right that it’s just a state school thing? Or maybe I just happened to find two insanely expensive dorms (Berkeley and UMich)?



Probably not just a state school thing but it could be: 1) flagship state schools and 2) fancy private schools.

I’d guess that the average costs are driven by community colleges and regional state schools (since that’s where most college students go). Also possible that data’s just wrong.

In any case, it’d be really interesting to know how the projects you identified at Berkeley and Michigan compare to fancy vanity buildings at non-universities.

Fwiw, here’s a (non-vetted) estimate of $300/square foot for construction costs in SF.

Oh - looking a bit more at the data from Berkeley - a few more things.

1) You write “Berkeley’s Lower Sproul rebuilding cost between over $529 and $659 per square foot for three new buildings.” Actually, it looks to me from a skim like it’s $659/sq ft for one of the Berkeley buildings (New Eshelman). The $529 building was a comparable at USC.

2) I think you use “total project budget” a few times but are comparing to “construction costs,” which are only a proportion of all the costs of a building.



@HL: oh, I think that actually accounts for most of it. The construction was about 50% of the total cost for Berkeley (which is the only one that broke it out), which would take it back to almost-reasonable levels, at least for the construction part. Don’t know about the overheads.

I remain astonished that it’s so expensive, though…



Michigan claims a $130m construction cost, or $350/sqft.

UMB’s General Academic Building No. 1 estimated $70m, for a cost of $392/sqft.

Those are still pretty high, though not quite as ridiculous.



Yale’s two new residential colleges are going to be approximately 440,000 sq ft, cost around $500 million and house 800 students. That’s $1,136 per sq ft. When they applied for a building permit, however, they listed the construction cost as $279,532,522, about $635 /sq ft.

For the sake of comparison, in Downtown New Haven, a developer is building a $395 million complex that will include: 719 luxury apartment units, 77,000 sq ft of retail space, 200,000 sq feet of office space, 52,000 sq ft of public space, and a 160 room hotel.



@Anon: wow, that’s even worse than any of the ones I found. Yikes. Thanks for pointing it out!