Why it costs more than $500 per square foot to build a school in Massachusetts

The best-performing elementary schools in Massachusetts were built between 1955 and 1959 and are small. Our town runs what is ranked as a second-tier K-8 school and it happens to be fairly large on a space/student basis. The current school has some portions dating to 1948, but mostly it was built and/or extensively renovated in 1994. Based on these data of top performance in 60-year-old buildings the most politically involved folks in our town have decided to bulldoze the current school and rebuild a same-size school in the same place (they couldn’t find anywhere else on the 71-acre campus to create a school for 660 kids so students will be in trailers for three years).

[Data source: niche.com. The #1 school is Maria Hastings Elementary School in Lexington, built in 1955. It is only 59,853 square feet for 423 students so it seems unlikely to contain the “hub spaces” that our proposed 150,000+ square foot school will have. #2 on the list is a school in Wellesley… built in 1957. #3 is a school in Newton, built in 1959 with 39,000 square feet for 428 students.]

The town still needs to vote to approve the $100 million in borrowing (will put us right up against the state’s statutory limit based on property value). Here’s a committee member’s attempt to sell town residents:

If you can build a new luxury home for around $300/sq ft., why
does it cost over $500/sq ft to build a school?

The main differences between our project and a single family residential project are as follows:

– Prevailing wage requirements — As a public construction project, no matter which option we select we will be subject to the Massachusetts Prevailing Wage Law which establishes minimum wage rates for works on public construction projects. In addition to the hourly wage, payments by employers to health and welfare plans, pension plans and supplemental unemployment benefit plans under collective bargaining agreements or understanding between organized labor and employers are also included in the established wage. This equates to labor costs that are likely 2 to 3 times that which you might see on a typical single-family residential project. For example, according to the Department of Labor Standards the prevailing wage for laborers working on a public project in [Happy Valley] in 2020 will be entitled to an hourly rate of approximately $77 whereas a laborer working on a single-family residence is likely earning somewhere in the $20 range. Prevailing wages for electricians, masons, and plumbers are projected to be in the $110+ per hour range come 2020 when we are anticipating construction of the school project will start.

– Filed sub trades — Massachusetts General Laws require what is known as the “filed sub-bid” system for selecting certain subcontractors on public building construction projects. There are 16 trades under the filed sub bid laws including masonry, certain types of flooring, fire protection, plumbing, mechanical and electrical. The Law requires that contractors submit construction bids in two phases. First, filed subcontractors must submit their bids to the Awarding Authority, which will compile a list of all sub-bids received. The Awarding Authority will send the list to all interested construction managers. Construction managers will then need to submit their bid including any filed sub-bidders that will be used on the work. This reduces the control the construction mangers have on who they can hire therefore requiring additional supervision and coordination.


– Finally, there is the differentiation of work. Work that a builder might self-perform on a home project is likely to be broken down between sometimes two or three separate trades on a public project where organized labor rules the day. The benefits of this approach include clean and safe work sites but at a cost.

Like day traders, these folks see a rising market as a reason to jump in and buy now…

construction costs and more recently material costs have been skyrocketing over the past six years and are anticipated to continue to rise in the foreseeable future, at least out until 2020. In terms of the prevailing wages that I mentioned above, based on a review of the wages carried in the 2012 report and a comparison with the DLS wages that have been set for the coming years, we are looking at an increase across the board of 36%, with some trades such as plumbers and electricians experiencing prevailing wage increases of 50% or greater over the eight-year period from 2012 to 2020.

Given these costs of building I would think that the U.S. would have to get poorer on a per-capita basis as the population grows.

Comparison: The Essex-class aircraft carriers of World War II were originally budgeted at $40 million, roughly $600 million in 2018 dollars if you start inflating from January 1943. That’s $174,014 for each of the 3,448 people on board, e.g., the Intrepid. If our town’s school comes in at its $100 million original budget and the 544 actual current students move in, it will be $183,823 per student. This is slightly rigged by the failure to include teachers and bureaucrats in the school building analysis, but certainly it seems as though inflation in government-built infrastructure has been so severe since World War II that what we used to pay for a state-of-the-art aircraft carrier is now a reasonable ballpark estimate for a school.

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24 thoughts on “Why it costs more than $500 per square foot to build a school in Massachusetts

  1. Hmm, hard to watch, I am sure. I’d suggest some benchmarking against other similar school building projects in your area, for a sanity check.
    Public projects always cost way more than they should, I’ve noticed. We replaced *half* of the Bay Bridge, and it cost about double what was projected, if I remember correctly. Even then, the construction appears to have quality problems–rusting bolts.

  2. G C: Why would it be relevant to benchmark against other school building projects? If we find that other towns are equally inefficient, why would that be additional motivation to tear down a functional building (the town committee commissioned an “Existing Conditions” report from engineers and architects who found essentially nothing wrong with the current building) and rebuild it same-place/same-size? If something is crazy expensive you try not to do it at all, right? They have no choice in Arizona and Texas where the population is growing, but thanks to the miracle of a 2-acre zoning minimum (we welcome people of color as long as they can afford a $750,000 vacant lot) our population is pretty much static (the school has held as many as 732 students in the past and current has 440 town-resident students plus another 100 or so from other places, e.g., Boston residents through https://en.wikipedia.org/wiki/METCO )..

  3. “I am sure. I’d suggest some benchmarking against other similar school building projects in your area, for a sanity check.”

    This would be like determining how crazy the city council in Oakland is by comparing it to Berkeley’s. The prevailing-wage laws are statewide, and every town within 50 miles of Phil is basically within the Boston metro labor market, and the trades are through the roof right now.

    That’s due in no small part to a massive boom in heavy construction downtown, which is likely at peak levels. Unless Amazon decides to put HQ2 here, which I’d give a 30-40% chance, the market in a couple years is likely to be flat to down, especially if we see a business cycle turn. So there seems to me a real risk of hedging at or near the top of the market, which would be unsurprising given that the people making the decision are municipal officials rather than REIT managers or what have you.

    The better question is why a significant portion of the townspeople consider this a good idea. The obvious answer is that higher school quality drives home prices up, but do fancy buildings actually have that effect? $100mm+interest could pay for a lot of enhanced pay packages for promising teachers or programs that might have more effect.

  4. Colin: The total school budget is $11 million currently, including maintenance for the building and utilities, etc. So with the bond payment on $100 million we would be able to hire an extra teacher for every one of the 46 classrooms (to work with the ahead-of-grade and behind-grade children) and/or give every new teacher a $1 million signing bonus.

    I’m not sure that home prices will go up as a result of this. Property tax collected per resident is already nearly 5X Cambridge. With the bond payment it could be 7-10X, depending on how severe are the cost overruns on the new school. Also, doing this project will max out our borrowing capability (there is a state limit on how much towns can borrow as a percentage of total property value). So everything else in the town will have to decay for a while. We bulldozed a fun castle-style playground a few years ago, for example, on the theory that the wood was old and unsafe. We haven’t been able to get organized/funded to put any new play equipment in there. So it is a fenced-off scraped-bare area.

    Combine this with traffic congestion getting worse, an explosion in the tick population, the Lyme Disease epidemic in suburban/exurban New England, and people wanting to move back into the city. The American suburbs were designed for a country of 100 million. I’m not sure that they make sense for a country of 327 million. They don’t bother building suburbs in China, do they?

  5. I would posit that these two questions:
    1) Should we build a new school?
    2) How much will it cost to build a new school, in this area?
    Are separate questions, although the answer to (2) may affect the answer to (1). My original post was aimed at trying to provide some insight into the 2nd question.

  6. You will have costs overruns — those are guaranteed. Then what? you mention you are maxing out your borrowing potential as it is. Kids in trailers forevermore? next to a slowly crumbling 90% finished building?

  7. Donald: We have a trade school that we share among a few towns. It cost $145 million and is in the process of being rebuilt using 45% state money. See

    https://www.minuteman.org/site/default.aspx?PageType=3&DomainID=4&ModuleInstanceID=58&ViewID=047E6BE3-6D87-4130-8424-D8E4E9ED6C2A&RenderLoc=0&FlexDataID=773&PageID=1&GroupByField=&GroupYear=0&GroupMonth=0&Tag=

    Note that they will not demolish the existing school until the new one is completed. So there are no trailers involved.

  8. The trade school has an enrollment of 538 students (most of them currently identifying as “male”). See http://profiles.doe.mass.edu/profiles/student.aspx?orgcode=08300605&orgtypecode=6

    So it is costing $269,517 per student to have a new school.

    The existing building was completed in 1975. Apparently nobody asked “If the entire school is full of people who are proficient at plumbing, electricity, carpentry, etc., why can’t they keep a 43-year-old building going?”

  9. I live in a similar town in NJ. Some years ago they decided that enrollment was dropping so they sold an elementary school to some private group for about $2M. A few years later they decided they needed to build a new one – at the time it was budgeted at about $20M, and it was going to include all mod cons. Ultimately, no one seems to know what it really cost, but the guess is >$50M (this was 2008 or so), and they didn’t build the pool or most of the other amazing features. They did have to spend a ton of money because the sweetheart deal on the land from a local developer turned out problematic because there was a slave cemetery on the land (which the developer and town claimed was unknown and unknowable) that cost a ton of money to move or do something with. I believe it was the most expensive elementary school ever built at the time. I’d assume the school will be double the budgeted amount, and I would sell and rent until it is done. The insane property taxes that result will torpedo property values.

  10. BillM: Thanks. There only about 2,000 houses in our town, so the best-case scenario (construction is completed on time and within budget) is that this will be $50,000 per house plus interest.

  11. I am always pleasantly surprised at how conservative even the most politically liberal parents can get when it comes to schooling. Married women with children are the most consistent Republican voting bloc.

    This is not an issue where organization and influence necessarily translate well into the online sphere — this kind of thing gets moving in person, where nuance and the personal touch are necessary.

    My first hand observation is that a handful of committed people can form the backbone of a successful campaign.

    You have two big winners — few people want their property taxes to go up and few people want their kids going to school in trailers.

    Good luck. Now you can get to know your neighbors. You are even in the position to give them an actual bird’s eye view of the situation.

  12. It’s always amazing to me how many of the crucial people in the Apollo program (Just to pick one) were midwesterners who went to elementary school in podunk places in the midwest during the depression. No fancy schools there, probably a lot of rote and repetition and maybe some slide rules. The whole county that Draper grew up in still has only one elementary school and he was able to invent inertial navigation, more or less. I could go on…

    Our current system seems to produce very few outstanding minds. (Or at least we don’t hear about them)

    https://en.wikipedia.org/wiki/Charles_Stark_Draper

  13. Trump is super diplomatic at the beginning. Says that he loves the “concept of the UN” if not exactly how it had been working out lately. Trump built the tallest residential building in the world in the most expensive city in the U.S. for $258/ft! And it is packed with kitchens and bathrooms.

    “It only costs a fool more money” to renovate rather than rebuild. Well, I’m not sure that I could become more popular in our town by sharing this perspective!

    He renovated a monster office building in Manhattan for $100/ft.

    But look at Trump now! He works for the government and, to a first approximation, isn’t able to get anything done.

  14. Interesting to compare with charter schools . . . from here:

    http://www.massschoolbuildings.org/sites/default/files/edit-contentfiles/About_Us/Roundtables/Designer/DRT_Mar_2017_Presentationl.pdf

    First Example:

    Sturgis Charter School
    • New modular construction of high school campus with highly successful “International Baccalaureate” program
    • Completed on a tight budget and schedule: 18 months for design and construction
    Locati on: Hyannis, MA
    Client: Sturgis Charter School
    Size: 52,000 SF
    Cost: $8,500,000 (modular)
    Bid Date: Spring 2011
    Completi on Date:
    August 2012
    Students: 400
    SF/Student: 137
    Price/SF 2016: $186

    Second Example:

    Alma del Mar Charter School
    • New Construction
    • Not required to meet LEED or MA-CHPS Certification
    Standards
    • 19 months from Architect hire to move in
    Location: New Bedford, MA
    Client: Alma del Mar
    OPM: Compass
    Client: JK Scanlan
    Size: 42,872 SF
    Cost: $12,347,000
    $10,804,000 w/o site
    Bid Date: July 2015
    Completion Date: August
    2016
    Students: 450
    SF/Student: 95 SF
    Cost/SF: $288/SF
    $313/SF (2016)

  15. Thanks, Colin. That presentation is interesting to me because it highlights the use of split system heat pumps as a low-cost HVAC choice. One of the reasons that the wise committee members in our town want to bulldoze the current school is that they are convinced that AC cannot be retrofitted. They simply assert that split system AC wouldn’t work for a classroom (too many people within). Or that it will cost tens of millions of dollars to maintain a few boilers for heating (but you wouldn’t even bother if every classroom had its own heat pump).

    It is also interesting because of the school that escaped the $110/hour rates for skilled local workers by having the building constructed in a factory (“modular”) by $20/hour workers and then aseembling on site. They got it done for $186/sf. And actually the building looks pretty awesome. I would like to hire those folks to build us a house! The $8.5 million that they spent for 52,000 sf is not that much more than what some neighbors have spent to build their 6,000 sf palazzos.

  16. This may also be relevant:

    “…But replacing old houses with new ones can actually result in more carbon emissions than doing nothing. A study of housing stock in Vancouver, Canada published in the journal Energy & Buildings shows why.

    There are two components to the carbon emissions associated with any given home. Embodied emissions are those associated with manufacturing, transporting, and assembling the materials the dwelling is made of. Operating emissions are those associated with running the home: heating, cooling, lighting, using appliances, and so on.”

    http://www.anthropocenemagazine.org/2018/06/how-energy-efficient-new-homes-can-lead-to-increased-carbon-emissions/

  17. The fixation of public officials with shiny new buildings – despite any rational economic justification for such expense – never ceases to amaze me. I graduated from a high school in central MA about 20 years ago, that was so old that the classrooms actually had (unused) fireplaces from the days before the building was equipped with central HVAC. Somehow, despite the spartan surroundings, many of my fellow classmates and I went on to college and lucrative careers. Would love to see if this kind of anecdata has been confirmed in any studies, but my suspicion is that it has not.

    Of course, this nonsense is not limited to schools. It does seem that recently, building new gigantic libraries in MA seems to be all the rage – despite the fact that some (including the one in our town) have a hard time remaining open during after school / weekend hours once built. Would be nice to see towns maybe even share the costs of a library rather than everyone having their own palace, but unlikely I know. Such is the result of the peculiar bias towards a full staff of bureaucrats for each and every town in MA, rather than sticking with seemingly more efficient county government like much of the rest of the country.

    Regarding the school – as anyone with recent construction / building experience will attest, trade labor and materials are in very high demand right now which is driving prices way way up. (The strong economy we hear about occasionally on the news is a very real thing.) Seems like a singularly bad time to start a major construction project with what (on its face anyway) appears to be a weak justification. If this can be delayed a few years – ie when we hit the inevitable “bust” part of the cycle – costs may get much more reasonable.

  18. Steve: That’s a good point. We have just over 2,000 households, essentially no crime or house fires, and we have police and fire chiefs rather than simply a small outpost of a county police/fire department. Our school system has 440 town-resident children plus another 580 kids studying on the nearby military basis. We have a superintendent, at last one assistant superintendent, four principals, etc. The county high school that I went to in Maryland had about 2,200 students and just a principal and vice-principal, I think.

    Some of the town-controlled stuff I think is great, e.g., our own Parks and Recreation department that can deliver the things that we want, including a lavish fireworks display on July 4 that probably isn’t cost-justifiable if a county planned fireworks rationally (“everyone can just drive to Boston and Cambridge”). But that department seems to run without multiple layers of management.

  19. (I’m also kind of a fan of library spending because the U.S. is sorely lacking in public space compared to a Spanish colonial town. Since we don’t have a plaza at least we can have a gold-plated library?)

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