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:
- Berkeley’s Lower Sproul rebuilding cost $659 per square foot for their new dorm. They compare it to a $529 per square foot dorm at USC.1
UMass Boston’s General Academic Building No. 1 cost $594 per square foot. Their “(Integrated) Design Building” (yes, the parentheses are part of the spelling) will cost $642 per square foot. (These are academic buildings, so maybe the infrastructure costs more?)
- UMass Amherst has fairly reasonable costs by comparison; their “North Residential Area” cost about $283 per square foot, while their Commonwealth Honors College was $354 per square foot. These are both still higher than the average for the most expensive location (NYC) in the survey I linked, though.
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.