These are among the major findings and conclusions to be drawn from School Planning & Management s 16th Annual School Construction Report.
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1 S CHOOL M ARKET R ESEARCH I NSTITUTE, INC 1721 Saybrook Road, P.O. Box 10, Haddam, CT FAX SCHOOL CONSTRUCTION SPENDING SHIFTS GEARS Fewer Dollars Mean More Renovations and Additions By Paul Abramson Total school construction fell in 2010 for the third consecutive year, but even so, more than $14.5 billion dollars of construction was put in place. Schools are still one of the largest construction markets in the United States. But, there is no question that the school construction boom has quieted. During the first years of this century, school construction totaled at least $20 billion annually. Then, as the nation s economy slowed, school construction spending slowed, too, falling to $19.5 billion in 2008, then dropping almost 16 percent in 2009 to just $16.4 billion. It was down another 12 percent last year and, if projections prove correct, could fall again in Not only has construction fallen, but there appear to be some significant changes in the makeup of what was completed. Almost 73 percent of construction in 2009 was of new school buildings. New school buildings accounted for less than 60 percent of construction spending in 2010, suggesting a shift to using less abundant construction dollars to upgrade and add to existing buildings. It is interesting to note that while overall construction fell more than $1.8 billion last year, spending on additions and renovation projects rose by more than $1.4 billion, a significant switch in construction strategy and activity. These are among the major findings and conclusions to be drawn from School Planning & Management s 16th Annual School Construction Report. To prepare this report, School Planning & Management received information on school construction completed and underway during 2010 and planned to start in 2011 from Market Data Retrieval (MDR), a company of Dun and Bradstreet (D&B). MDR contacts school districts throughout the United States seeking information on their construction plans new buildings, additions to existing buildings and major renovation, retrofit or modernization projects. We take that project information and use it to estimate construction on a national and regional basis, and to report on how dollars are being spent on new schools. All of the figures published are annual in nature. That is, they do not accumulate ongoing construction, but rather compile information on what was completed or expected to be completed or started in a given calendar year. School districts may be involved in more construction, but work started or completed outside the targeted years is not included. The National Scene School districts in the United States spent just over $14.5 billion on construction projects completed during the 2010 calendar year, including almost $8.7 billion on new schools (accounting for 59.6 percent of the construction dollars), just over $3 billion (21.1 percent) on additions to existing buildings and $2.8 billion (19.2 percent) on retrofit and modernization of existing structures. The percentage of construction dollars spent on new buildings was the lowest it has been in several years and a significant drop from the 73 percent recorded a year ago. In 2010, spending on both modernization projects and additions rebounded from their lows, though they did not reach previous levels. It appears that school districts needing more space undertook smaller projects, either adding to existing buildings or upgrading deteriorating ones that would not be replaced by new construction, at least in the foreseeable future. A Full Service Direct Marketing Agency: Consulting Creative List Brokerage Printing and Mailing Premiums Publishers of School Marketing Newsletter
2 The table on page 3 shows the national construction picture in It also shows how much school districts in each of 12 regions of the nation spent on construction and how they spent it. In 2010, school construction spending exceeded $1 billion in only five regions. In all but two, construction completed in 2010 was lower than a year earlier. Region 9, including Texas, Louisiana, Oklahoma and Arkansas, was the highest spending region, and one of only two that spent more in 2010 than the previous year. Schools in that region were responsible for 17.3 percent of the nation s construction spending, with more than $2.5 billion put in place. Region 9 not only put more construction in place, it also led the way in spending for new school buildings, with $1.65 billion. The biggest change in construction spending came in Region 11, including Arizona, California, Hawaii and Nevada. In 2009, construction spending in the region dropped to a reported $1.6 billion. It rebounded in 2010 to almost $2.3 billion, making it the second highest spending region in the nation. Region 5, including Florida, Georgia, Alabama and Mississippi, was the third highest spending region, responsible for $1.8 billion in construction. As in Regions 9 and 11, the bulk of the construction dollars are still going to new school buildings. School districts in Region 2, including New York, New Jersey and Pennsylvania, put almost $1.5 billion of school construction in place in 2010, a 17 percent drop from the year before. Districts in these states, which are not gaining in population, spend just a third of their construction dollars on new buildings, but they continue to invest in their existing structures, putting almost 40 percent into retrofitting existing buildings. Districts in Region 4 (North Carolina, South Carolina, Kentucky and Tennessee) spent $1.3 billion last year, with 76 percent of that on new schools. While construction spending remains high in these four states, it was 20 percent lower than its activity just a year earlier. New schools are the driving force. Region 6 (Indiana, Michigan and Ohio) school districts spent $924 million last year, and those in Region 3 (Delaware, District of Columbia, Maryland, Virginia and West Virginia) reported just $829 million in completed work. Each region spent more than a billion dollars in each of the previous five years. Region 10 (Colorado, Montana, New Mexico, North Dakota, South Dakota, Utah and Wyoming) covers many of the least populated areas of the nation, but includes important pockets of growth. The fact that 75 percent of the $772 million invested in school construction went to new schools probably reflects that growth. Each of the other four regions put about $600 million of construction in place last year. Region 1 (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) was responsible for $653 million, with more than half of it spent on existing buildings. Region 7 (Illinois, Minnesota and Wisconsin) spent just about the same amount of money and used it in a similar manner. Region 8 (Iowa, Kansas, Missouri and Nebraska), divided its $636 million spending pretty evenly among new buildings, additional space and renovation. Region 12 (Alaska, Idaho, Oregon and Washington) was the lowest spending region at $598 million, and also put the majority of its dollars into existing structures. What s Underway Now? The table on page 4 examines construction that school districts say they will complete in If these projections are accurate, total construction this year will fall to $13.4 billion, somewhat less than was projected for 2011 a year ago. If the pattern holds, actual completions should exceed the projections. The same five regions that do most construction, at least on a dollar basis, expect to be the busiest again, but school districts in all of them predict that they will be less active, in terms of completed construction. If the projections hold up, completion of new schools will account for about 60 percent of the dollars spent.
3 Looking Ahead The table on page 5 reports on construction that is projected to start this year. It is perhaps the truest picture of the mood of the school construction market, with districts across the board reluctant to predict that they will have the dollars necessary to get their needed construction underway. The total shown (less than $13 billion) is the lowest we have seen projected in more than a decade. There is little optimism that scheduled bond votes will pass and resulting construction go forward. The mood of the nation may change, but of late, education in general has had a difficult time getting political and financial support for on-going educational programs. The chances of getting support for construction seem poor. New Schools Completed in 2010 The median elementary school in the U.S. costs $ per square foot to build. The median spending was $25,500 per pupil, and the median school provided 125 square feet for each student. The median elementary school was designed for 600 students and provides 75,000 square feet at a total cost of $14,800,000. Note that in finding medians, each variable is looked at separately so that the school that cost $ per square foot is not necessarily the same one that spends $25,500 per pupil or that was planned for 600 students. Looking at middle schools, the median cost is $ per square foot. Median spending per pupil reached $29,959, and the median middle school provides 149 square feet per student. The median number of students in middle schools completed in 2010 is 936, and the building size is 140,000 square feet. The cost is $30 million. The median high school costs $54.9 million and provides 260,000 square feet. It was designed to accommodate 1,600 students. The median high school provides square feet per student at $30,833 per student. The cost per square foot was $ Finding Your Fit The median figures may be significant to your district. But, depending on your location, your district s aspirations, the labor market in your area and many other factors, the median may not apply to you. If your district is in a high-cost area or feels that it is a high-quality district in terms of how it spends its money and how it builds its buildings, you may want to look at the high quartile numbers, at least in terms of cost and space per student. They show that 25 percent of new elementary schools being built cost $268 per square foot or more. One-quarter of the elementary schools completed last year provided 140 square feet per student. At the high school level, 25 percent of the districts will spend $252 per square foot or more, and one-quarter of all the new high schools completed last year cost more than $75 million. The low quartile is the point at which 75 percent of the reporting schools are higher and 25 percent are lower. Thus, 25 percent of elementary schools were completed for $157 per square foot or less. Twenty-five percent of the new elementary schools provided less than 107 square feet per student. The low quarter of all reporting school districts built their elementary school for $11.6 million or less. Being in the low quartile does not necessarily suggest that the school is behind others. It may simply indicate that it is in an area with lower construction costs. Where to Put the Money Whether caused by an expanding student population, need for technology, questions of safety and accessibility or the need to upgrade schools built in another time, school boards are often faced with multiple demands for construction dollars. The table on page 6 takes a look, in terms of dollars, at how some of those questions are being answered. It shows the school level at which construction is taking place (money is being spent) and the type of construction that was undertaken. For example, among school construction projects completed in 2010, 35.1 percent was spent on elementary schools, while 18.8 percent went to middle schools. High schools received 44.1 percent of the dollars spent. The balance was spent on district projects generally transportation and/or maintenance buildings. (It may be a sign of the times that few of the reports were of buildings constructed to house administrative needs.)
4 The table also shows the purpose for which construction dollars were spent at each level. For example, of the $5.106 billion spent last year on elementary schools, just $3.1 billion was for new buildings. Another $1 billion was for additions to existing buildings and almost as much ($982 million) for renovation. The table also shows how districts are expecting to spend their dollars in projects being completed or starting in In general, high schools get the lion s share. Does Size Matter? Students do better in smaller learning environments. There is ample evidence for this statement and most educators accept it. But somewhere there appears to be a gap between educational understanding and educational construction. The majority of the schools that we build today continue to be large. The reason, of course, revolves around questions of efficiency and cost. While advocates of small schools insist that the cost of building and running them (and the cost per student educated successfully) are actually lower for small schools, at times it is a hard sell. To examine the question of the comparative cost of building schools by size, all of the new school buildings constructed in 2010 on which information was available were lined up by size and then were divided into four equal groups so that median costs and other information could be found among the smaller and larger buildings. Looking at elementary schools, one-quarter of them were designed to house 500 or fewer students. Among that group, the median building will house 400 students and will contain 53,000 square feet. The cost will be $10.5 million. The median cost per square foot among the smaller elementary schools was $ and cost per student was $31,504. By contrast, one of every four new elementary schools was designed for 800 or more students. The largest one reported was designed for 2,000 elementary school students. Among these larger elementary schools, the median student population was 950, the median size almost 108,000 square feet and the median cost $15.6 million. In terms of cost per square foot, these larger buildings cost $210.29, somewhat more than the smaller elementary schools. The cost per student, $25,142, was less than the $31,504 being spent per pupil for the smaller schools. On the other hand, the smaller schools provided much more space per pupil (133.3 square feet per student) than the larger schools (116.7). One-quarter of the middle schools were constructed for 750 or fewer students. The median housed 600 students in 90,000 square feet at a cost of $15.6 million. The median cost per square foot for these smaller schools was $190 and the cost per pupil $29,333. The smaller middle schools provided square feet per student. Among larger middle schools (with between 1,200 and 1,800 students) the median was 1,300 students, 175,950 square feet and almost $45 million in cost. In terms of cost per pupil ($33,897), the larger middle schools were more costly than the small ones, and cost per square foot ($239.54) was greater. These larger schools also provided less space per pupil. The high school picture shows that the median cost per student in larger schools (with 2,064 to 4,200 students) was more than for smaller ones (fewer than 1,200 students), as was cost per square foot. The smaller high schools provided less space per student for the program. The difference in construction cost per student between large and small high schools is significant, as is the cost per square foot. Considering the educational implications, and the usually higher administrative and security costs of large high schools, school districts may wish to look once again at the efficacy of putting 2,000 or more students into a single building. Providing Facilities New school buildings have great similarities. All have classrooms and offices. Virtually all have facilities for physical education. Some kind of a nurse s station is a regular feature. Libraries are in all buildings, though in some, they may be listed as media centers. In elementary schools, gymnasiums and cafeterias are provided, but some are listed as multi-purpose rooms.
5 Classrooms and lavatories were included in a majority of elementary and middle school additions, but no other feature was regularly included, confirming that the basic reason districts added to these schools was to accommodate additional students. Middle school projects often (25 percent) also added science facilities. The inclusion of portables in 15 percent of the middle schools is something of a surprise, and once again speaks to the idea that school additions were essentially a means to house more students. High school additions were significantly more varied. Science labs were in 27 percent; offices and libraries or media centers in one of five. Athletic facilities (locker rooms and bleachers) and arts facilities (including performance and work space) were also frequently added. Paul Abramson is education industry analyst for School Planning & Management and president of Stanton Leggett & Associates, an educational facility consulting firm based in Mamaroneck, New York. He can be reached at intelled@aol.com. The complete report is available on the School Planning & Management website at (click on Research and Reports).
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