To Build New or To Renovate? The $64,000 Question.

There’s never a right or wrong answer, just many factors and potential outcomes to take into consideration.

Clyde Froehlich
and Phil Resch
One of the biggest questions currently facing campus decision makers is whether to raze current residence halls and build new, or to renovate existing stock.

This question is in the forefront of the minds of administrators, particularly on campuses that took part in the late 1960s and early 1970s building boom to accommodate the large influx of post-World War II “baby boomers.” These residence halls are now 40+ years of age, usually were built as “40-60 year buildings,” are typically designed with outdated double-gang corridors with large shared bathrooms, and have few design features and amenities that one would find on the wish lists of today’s residents and administrators.

Whether to renovate or to raze and build new is not only an individual campus decision, but a project-specific decision. It has been the recent case at the University of California at Irvine and the University of California at Davis that some 1960s vintage residence halls have been razed and replaced, (or are currently being replaced), and some have undergone extensive renovation.

In its simplest form, the answer to this question is driven by dollars. Does it make sense to spend what it would cost to renovate vs. to raze and build new? Can the budget afford new construction? An engineering study will need to be performed to determine the scope of work that would need to be performed to renovate and the costs for such work as compared to the costs for new construction, which are well documented.1

Additionally, the department of housing and residential life will need to determine what programming and design changes are essential as a part of the renovation of old buildings if they are to be modernized to meet current needs. Costs for such additional programmatic modifications will also need to be quantified and evaluated. Are more private or semi-private or private bathrooms necessary? Is more or less square footage per student necessary? Is retail and/or classroom space needed? Is space for a fitness center needed? Is more office space needed? Are resident director/head resident/coordinator/faculty fellow living spaces adequate as they are?

Another important factor will be what renovations and modernization features have already been implemented beyond cosmetic improvements. Have WiFi and cable TV been installed? Have bathrooms been renovated? Have Americans with Disabilities Act (ADA) upgrades been accomplished? Have hazardous materials been removed? Have new mechanical, electrical and/or plumbing systems been installed? Have seismic and other life safety issues been addressed? Have energy saving features been added?

There is little doubt that substantial renovations of the type that will add another 15-20 years to the life expectancy of the building(s) under consideration will trigger some very expensive scope of work requirements. Among them are ADA compliance, hazardous materials removal or remediation, (Asbestos, lead paint, PCB containing electrical transformers, etc.), seismic and other “force of nature,” (hurricane, tornado, flood), requirements, and fire safety and other life safety issues. It is often these issues that are the deal-breakers that rule out renovation and drive the decision to raze and build new, particularly if little substantial major renovation work has already been undertaken during the life of the buildings.

If a decision to raze and build new is reached, the next decision will be whether or not the new project should be privatized. Since there can be little doubt that building new will cost more than renovating, the question becomes how can the institution keep construction costs down? Recent data show that privatized projects cost 22 to 25 percent less than college and university constructed projects.1 In addition, privatized projects eliminate the debt service for the project being assumed by the institution on their books.

However, the decision to privatize should not be driven exclusively by dollars. Among other issues that need to be considered:

• What population will the new project serve? First year students’ needs are often better served in facilities that are not apartment-style in design. Private developers prefer to build apartment-style facilities that might be better suited for continuing, transfer and graduate students. Additionally, privatized projects typically do not meet the supervision and programming requirements desired by most residential life/education units for first year students.
• Where will the project be physically located on campus? Does it make sense to have a privatized project as an island right in the middle of university-owned and operated buildings, or is privatized housing better suited for a location on the campus perimeter?
• Will the quality of construction of a privatized project be up to the quality of construction of a project built and owned by the college or university? What building life expectancy are you looking for?
• What are the long-term consequences of privatized projects? The jury is still out on this question. The first privatized projects on college and university campuses were built in the late 1970s and early 1980s with 40 to 50 year land leases. Therefore very few, if any, land leases have yet to expire as the oldest projects are generally 33 to 35 years old now.
• If you are a public institution, what are the collective bargaining and/or prevailing wage issues on your campus or in your state that might not be compatible with the business model used by private developers? Will addressing these issues result in litigation that will delay your project and increase costs as a result?
• Is a new dining hall required as part of your project? Private developers very rarely, if ever, construct dining halls.

There are many other issues that need to be addressed in making these decisions. Among them:

• If razing and building new, where will displaced students be housed during the period after razing, but before new facilities are ready to be occupied? Or, do you have the luxury of being able to construct new building(s) and only have to raze the old building(s) after the new building(s) are ready for occupancy?
• If razing and building new, what will happen to displaced staff who worked in the razed buildings during the interim period?
• If renovating, can the project be accomplished over the course of a summer, or done in phases over the course of a few summers? If not, what plans must be implemented to have the building(s) off-line for an academic year or more?
• How will your plans affect your summer operations?
• If a privatized project is built, how will it integrate administratively and programmatically with university/college owned housing?

There is no easy answer to the question of whether to renovate or build new, but the information above will help guide you to dial in on the decision that best meets the specific needs of your department and campus.

1 Paul Abramson, “2013 Annual Report on Student Housing,” College Planning and Management, May 2013.

— Clyde Froehlich and Phil Resch,
Resch + Froehlich Consulting LLC. The two student housing veterans, with approximately 30 years of experience each, announced their new consulting business at the annual WACUHO conference in April 2013. www.rfconsultingpartners.com or email: info@rfconsultingpartners.com

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