From Empty Classrooms to Efficient Campuses - A Market-Based Approach to University Facilities

Oct 15, 2026

Policy brief analyzing pervasive underutilization of American university facilities, linking inefficiencies to misaligned incentives, ownership and control structures, inflexible schedules, and maintenance neglect. Cites evidence from a UNC System facilities inventory showing low weekly instruction hours and describes how enrollment shifts leave large spaces vacant. Proposes market-based mechanisms such as renting, flexible scheduling, and competitive allocation to increase occupancy, reduce operating costs, and avoid costly regulation-driven construction.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages5

Reading Time13 min

AccessFree to download

Problems and inefficiencies

Underutilized campus buildings

Perverse incentives and ownership

Costly regulations

Proposed market-based approach

POLICY BRIEF From Empty Classrooms to Efficient Campuses: A Market-Based Approach to University Facilities By Richard K. Vedder February 5, 2025 College campuses require buildings to operate, and larger institutions typically own millions of square feet of classroom and office space, laboratories, dormitories, eating facilities, conference centers, student unions, stadiums, etc. Some own vast hospitals and clinics; a new hospital at Ohio State has more than two million square feet, about the same as the Empire State Building. Unsurprisingly, of the many inefficiencies of American higher education, probably none is greater than the misuse of campus facilities.1 Problems abound. Six big ones are: 1. Buildings are typically grossly underutilized. Most campuses are largely deserted for about four months a year, with little instruction occurring on the weekends and often on Fridays during the school year. Computer-based instruction has made many classrooms and other facilities look like parts of a vast, deserted academic village. 2. There are few incentives for campus leaders to try to remedy the situation. Indeed, perverse incentives exist that tend to perpetuate and accentuate these inefficiencies. 3. In some public universities, outmoded labor legislation or other rules inflate the cost of constructing new facilities. 1. I am deeply indebted to Marty Kotis, himself a real estate developer and builder, who is a trustee of the University of North Carolina at Chapel Hill, for his assistance on this essay. Policy Brief 4. Many university buildings, especially student housing and cafeterias, appropriately belong in the private sector where market incentives would encourage better occupancy and lower operating costs. 5. The modern birth dearth suggests campus enrollments will not grow robustly and indeed may shrink in coming years, but many schools continue to embrace an “Edifice Complex,” building costly facilities in the risky hope that they will lure students. 6. Many campuses fail to provide adequately for the maintenance of facilities, including such routine things as repainting surfaces and replacing roofs. This ultimately results in extremely expensive renovations or the premature replacement of buildings. Building Underutilization Campus buildings are often nearly deserted even at typically peak midmorning or afternoon hours. As I write this at 9:20 a.m. on a normal weekday in the midst of the academic year, of the 32 faculty offices on my floor in my building, only two (one mine) are occupied. Data from the UNC System’s 2022 Facilities Inventory and Utilization Study confirms that the problem isn’t limited to my university. The study revealed that,“[i]n 2022, total average weekly hours of instruction systemwide in classrooms was 22.6 hours per week. […] Total average weekly hours of instruction systemwide in class labs was 13.0 hours per week.”2 Part of the problem relates to academic schedules. Classes are in session for most students only about 30-32 weeks a year. When students are gone, so, too often, are faculty. The use of year-round academic scheduling, perhaps in the service of three-year bachelor’s degrees, could significantly reduce this problem and save students large sums of money. They are commonplace in Europe but are resisted in this country. Adding to the problem is that units within universities often claim to have “ownership” of certain facilities. The history department may claim, based on past usage patterns, that the first-floor classroom and thirdfloor offices of a certain building belong to them. Yet, as history enrollments have declined over time, classrooms increasingly are grossly underutilized, with perhaps 20 students sitting in a room capable of seating 100.3 Meanwhile, enrollments in classes in business and computer science may be booming, and students are crammed into classrooms or labs in buildings dedicated to these academic areas built when enrollments were lo

FAQs

What are the main inefficiencies in campus facilities discussed in the brief?

The brief highlights buildings being grossly underutilized, limited incentives for leaders to fix the problem, and additional cost pressures from labor regulations. It also notes maintenance failures and construction decisions driven by student recruitment hopes rather than demand.

What evidence does the brief use to support the underutilization claim?

It cites the UNC System’s 2022 Facilities Inventory and Utilization Study, reporting average weekly classroom instruction hours and lab instruction hours across the system.

How does the brief suggest universities could improve utilization?

It argues for shifting toward market-based allocation—such as renting space, using flexible scheduling to drive demand, and reducing overbuilding—so occupancy improves and operating and renovation costs fall.

Oct 15, 2026

Uploaded by Sophia Brooks