How selective space charges can incentivize better office space use

As growing enrollments and tighter budgets lead to space crunches on college and university campuses, institutions are increasingly looking for new ways to improve space utilization. Some institutions hope that charging units for space will incentivize better space use in the academy, but often, this is not the case.

Space charges do not incent colleges to give back their underutilized space, nor do they create marketplace for space, as most institutions have no central infrastructure to support such a marketplace. Space charges also do not help deans understand the true costs of space.

However, while general space charges do not incent better space usage, charges directed toward a specific type of space can be far more effective in improving utilization because they allow academic leaders to see where the problems lie. Stanford University has successfully implemented bonuses and penalties to incentivize better office space use. Stanford’s program has two main components.

Component 1: Clear, enforceable office space standards

First, Stanford established clear, enforceable office space standards. Stanford has role-specific space targets, which are enforced in both new construction as well as existing space.

The table below illustrates how Stanford calculates a sample college’s office space allocation based on its distribution of roles. The second column highlights Stanford’s office targets. Most roles have a built-in buffer of 15% to account for older buildings.

Office Space Utilization (Represenative College)

Office Space Utilization (Represenative College)

Using these targets, Stanford calculates each college’s office space allocation based on the number of each type of employee it has. Then, they compare the college’s target allocation to its actual amount of space.

In this example, the college is 9,364 square feet over its allocation, shown in the far right column of the “Total” row. Finally, Stanford allows for a “below the line” adjustment to accommodate special circumstances. In this case, the college has 2,392 square feet of approved second offices.

Component 2: Penalties and rewards based on space usage

The second component of this practice is to penalize or reward colleges based on their actual space allocation, illustrated below. Stanford charges units $33 per square foot of occupied space. They initially selected the $33 charge based on indirect cost recovery per square foot of research space.

Today, Stanford simply aims to select a charge that will sufficiently motivate colleges to change their behavior. If the $33 charge begins to lose impact, Stanford can simply increase it.

Dean's Space Bonus/Penalty
(Actual Space Usage—College Space Allocation) x $33 per SF

Dean's Space Bonus/Penalty

In this example, College A is 3,078 square feet under its allocation and receives a bonus of $102,000. By comparison, College B is 15,219 square feet over its allocation, leading to a penalty of $502,000. College B has three options to satisfy this penalty:

  • Pay the penalty
  • Use the funds to make renovations that bring the college into compliance
  • Give up space to the provost

Words of Caution

While this practice can help institutions reclaim underutilized office space from units, it requires a complete and current inventory of campus space. Furthermore, institutions must establish clear policies on what types and amounts of space they will allow units to return to the central pool to prevent departments from returning space that cannot be repurposed.

Learn how you can recover underutilized office spaces

Not only is office space per student growing, but it is growing faster than any other type of campus space. Download this excerpt to discover strategies that will help you improve office space utilization by implementing practices such as enforceable no-office protocols and voluntary office withdrawal incentives. Download the excerpt

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Working with Academic Leaders to Improve Space Utilization

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