The High Costs of Using Campus Space Inefficiently

As colleges and universities grapple with escalating cost pressures, embracing a “leaner but better” mentality has become a top priority. While labor and IT costs often make headlines, Facilities—taking into account the costs of construction, maintenance, operations, utilities, and renovations—is one of the largest expenses for most colleges and universities. And yet campus space continues to be significantly underutilized by occupants and owners, who sometimes quite literally spend thousands to maintain unused space.

By understanding the high costs of campus space and why underutilization impacts strategic priorities, institutional leaders can galvanize stakeholders into changing their space consumption habits. Read on to learn about the key factors contributing to the high costs of using campus space inefficiently, and register for our 2025 Roundtable for Chief Business Officers to engage more with this research.

The built environment is our largest asset, but also one of our largest expenses

Facilities and Estates leaders consistently rank budgetary pressures and financial sustainability as their top challenges. With the costs of operating, maintaining, and constructing campus space rising rapidly, it’s easy to see why they voice this concern. A 9.5% increase in Facilities operating budgets since 2019 has been subverted by a 19% increase in the cost of building supplies and construction services during the same period. With the average cost of new higher ed construction per square foot above $600, it is understandable why 64% of higher education leaders say their institutions have delayed or canceled projects in response to added cost pressures.

But construction costs represent only about 25% of the total lifetime expenses for a building, while recurring costs, like utilities, everyday maintenance, and operations, represent another 35-40%. Additionally, the capital needs for facilities at colleges and universities amount to nearly $1 trillion over the next decade. While investment in existing buildings has rebounded in recent years, growing by 33% since 2021, inflation and increased wages have accelerated the costs to care for these existing facilities by nearly 20%. According to Gordian, one in every three dollars of facilities needs goes unmet.

Some costs associated with buildings and real estate are unavoidable. However, the real challenge comes from the misalignment of space investment with actual use after it is handed over to occupants.

Underutilization and misalignment of campus space commonly create inefficiencies

Poor campus space utilization has been a pain point in higher education for over a decade. However, increases in flexible work and online learning brought about by COVID-19 exacerbated the problem. For example, while the utilization rate of centrally owned classrooms is greater than that of college/department-owned classrooms (59% vs. 44%), neither has a utilization rate of more than 60%. And while the average campus area increased by 123% between 2007 and 2021, space per in-person student has only increased by 8%.

Despite growth across most space types in the last 20 years, office space has expanded more rapidly, outpacing every other space category. Additionally, office space (both academic and administrative) is actively occupied less than 50% of the time, according to EAB-compiled survey data. Given that office space makes up a sizable portion of the campus footprint, low utilization rates indicate that campus space is misaligned with institutional needs.

Common barriers to change across space types

While institutional leaders may know that campus space is underutilized or misaligned with their college or university’s needs, making impactful changes is often difficult due to entrenched behaviors and ideas about the built environment.

Despite these limitations, reductions in campus space have a meaningful impact on the use of Facilities talent and resources. Facilities leaders optimistically report that they could eliminate on average about 20% of office space and 12% of total campus space without impacting student success and customer satisfaction.

However, stakeholders across campus often do not understand the negative impacts of inefficient space use and are therefore unwilling to deploy space differently. By connecting the impacts of campus space to the strategic priorities of campus leaders, institutions can gain support for changes that optimize the built environment.

While cabinet members have different priorities when it comes to campus space…

While business, Facilities, and Estates leaders focus on space implications, leaders across the cabinet have diverse needs and expectations for campus space. Understanding the relationship that different leaders on campus have with space is essential for collaborating with them to improve utilization.

…Ineffective use impacts strategic priorities for the whole institution

Financial implications

With the costs of new construction over $600 per square foot, institutions can avoid millions of dollars of spending by reducing the need for new buildings through better space utilization. One university estimates that by redeploying just 2% of 7.5M square feet of campus space, it avoided $45M costs of new construction. By decreasing costs associated with current space and avoiding costs for new spaces, institutions can reinvest these funds towards other strategic priorities like student success, research development, and sustainability.

Sustainability implications

More than 65% of Facilities leaders report that their institution has committed to achieving carbon net zero. To meet its goal of becoming a low-carbon campus and reducing emissions by 45% by 2030, Western University created a program to renovate older buildings on campus, improving their energy efficiency and use while reducing emissions.

Student success implications

Ineffective use of space may impact student success goals. For example, several institutions have repurposed underutilized space to better meet student desires for social and study space across campus.

• Indiana University added movable furniture and whiteboards to hallways around classrooms, creating active learning corridors. These spaces allow students to finish group work and continue discussions after class.
• The University of Calgary converted underutilized lecture halls into student study spaces and developed an easy-to-navigate study space finder tool for students.
• The University of Michigan proactively embedded over 350 informal seats and whiteboards throughout a classroom building. This gives students more space to study, collaborate, and socialize outside the classroom.

In today’s challenging landscape, higher education leaders cannot afford to overlook the immense costs—as well as the untapped potential—of their physical spaces. With space a cornerstone for many aspects of the student, faculty, and alumni experience, optimizing space is not just a financial imperative, it is a strategic one.

The way institutions manage their space impacts far more than budgets; it shapes progress toward key priorities like environmental sustainability, student success, and the long-term financial health of the institution. Ready to continue the conversation? Register for our 2025 Roundtable for Chief Business Officers.