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Halt University Construction

President Obama is campaigning this week against a planned doubling of student loan rates, a rare issue on which Mitt Romney seems to agree. It’s a very worthwhile cause, but it will do nothing to solve the underlying problem of tuition inflation, which is pricing a college education, and the upward mobility it provides, out of reach for many Americans. Between 1981 and 2006 average tuition and fees more than doubled—and that’s after you factor in inflation. What we really need is to move toward federal price controls. That may sound radical, but Obama himself made a similar-sounding point in this year’s State of the Union Address:

Let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury—it is an economic imperative that every family in America should be able to afford.

Remarkably, this call provoked virtually no pushback from a Republican establishment ever-eager to denounce any exercise by Obama of federal muscle in the economic sphere as incipient socialism. Maybe the GOP has been silent because these days it sees universities as the enemy—a redoubt for Marxists, “snobs,” and way too many people who vote Democratic. Or maybe it recognizes that something really needs to be done to halt the rising cost of college. (My evil book-peddling twin has some further thoughts on this topic today in Slate.)

But where to start? I propose a voluntary moratorium on new construction on college campuses.

My inspiration comes from Ernest Davis, Patrick Deer, and Mark Crispin Miller, three NYU professors who, in an April 26 New York Times op-ed (“Expand Minds, Not the NYU Campus”), call on NYU to halt its planned $6 billion expansion. There are unique issues here involving historic preservation—NYU has been slowly wrecking the character of its Washington Square neighborhood for several decades—but Davis, Deer, and Miller also point out that since NYU doesn’t have a monster endowment, the new construction will be funded at least in part by loading up the university with more debt. That will mean higher tuition and more debt for NYU students, and it will also mean that NYU will further price itself out of reach for a growing number of prospective and current students. 

NYU is an unusually ambitious university that for some time has overseen a huge expansion in its size and prestige. But the university construction boom is a nationwide phenomenon. Colleges and universities have spent more than $22 billion on new facilities during the past two years—more than twice what they spent as recently as 2000, when the economy was still enjoying a tech-fueled boom. “Construction cranes sprout from the campus of UC San Diego like towering palm trees in the Southern California sun,” writes Jon Marcus on the Web page for California Watch, a nonprofit founded by the Center For Investigative Reporting:

There’s a new engineering building under construction, and a new addition to the school of management. A new office building is now open, along with a new parking garage, biomedical research and marine labs, cardiovascular center, $400 million student apartment and dining complex, and $55 million music center. New clinical research and biological and physical sciences buildings are scheduled to get under way next year.

Whaa? Isn’t the University of California flat broke? Well, yes. But it still has about $9 billion worth of construction going on at its campuses. When I read this I double-checked the date Marcus posted his account: Yup, it was only a month ago. University officials say all of this construction was “in the pipeline” before the economic downturn in 2008. Some of it was paid for with private money, and some of it is funded with private money and government grants. But at least half of it is funded with debt. And no one seriously believes the construction boom, on UC campuses or anywhere else, will halt anytime soon. “The cement never dries on a UC campus,” Marcus quotes one faculty union member saying. Meanwhile, this year alone student fees on UC campuses rose 18 percent.

The university building boom may have helped stimulate the economy in these lean years, when construction jobs were unusually scarce. But it’s come at a high price for college students, and it will continue after the recovery picks up steam unless the federal government starts exerting some downward pressure. University construction is considerably more expensive than other commercial construction. According to one estimate by the National Association of College and University Business Officers, college and university buildings cost $31.46 more per square foot than commerical buidings. An Oklahoma State document explains why:

Part of the explanation of the high construction cost lies in the complexity of what we build, the codes and standards we must meet, and the unique environment within which we build. Budgets are driven up by the choices we make when we demand that our new facilities serve as visual articulations of institutional image and quality.

Translation: “Because we can.”

Is some of this new construction urgently necessary? No doubt. But if Obama called for a voluntary moratorium on new university construction, he would empower state governments, local communities, and concerned faculty members like Davis, Deer, and Miller to press university administrators harder to justify their new projects. A voluntary moratorium would also give the federal government some running room to set up some longer-term procedures for imposing a mandatory moratorium down the line. Lots more needs to be done to control college costs. Curtailing runaway construction would be a good start.