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As the renovation of Adams House, one of Harvard’s undergraduate residential houses, enters its third phase this June, the University anticipates an unprecedented 12 to 14 percent rise in costs — nearly 10 percentage points higher than the traditional 4 percent benchmark.
The spike in costs reflects a perfect storm for construction budgets: historic inflation in Boston-area construction, rising interest rates nationally, and a pandemic-induced five-month pause on construction in 2020.
Adams is the latest focus of Harvard’s House Renewal project, a renovation of all 12 undergraduate residential houses that represents “one of the largest and most ambitious capital improvement campaigns in Harvard College history,” according to the Harvard Gazette, a University-run publication.
Originally planned in 2008 under the cloud of the financial crisis, the more than $1 billion proposal projected 15-month timelines for each house, with plans to break ground in fall 2011 and conclude construction 12 years later.
Yet 12 years later in 2023, the project is only halfway through and has likely already incurred more than $800 million in costs, according to now-deleted figures posted on LinkedIn by House Renewal Senior Project Manager Michael J. Leyne.
Leyne’s profile previously described the renewal project as a “$1.6B program,” estimating the cost of the ongoing renovations to Adams as $300 million, and gave figures totaling more than $600 million for the full renovations of Lowell, Winthrop, and Dunster houses, combined.
Leyne did not respond to a request for comment on the figures. A University spokesperson denied the accuracy of the figures but declined to provide alternative figures.
Explaining shifts to the budget projections, Executive Director of the Undergraduate House Renewal Program Stephen Needham said in an interview that the College has approached House Renewal on a “project-by-project” basis.
“Each project is looked at totally individually,” Needham said, adding that each renovation proposal “has to undergo a pretty stringent affordability and financing analysis” before being approved by the Harvard Corporation, the University’s highest governing body.
To accommodate rising prices, Needham said, each individual budget proposal contains an estimate of “escalation,” or projected inflation per year. Based on historical rates since 1940, Harvard has on average used a 4 percent inflation benchmark — a target that the first five houses met or fell below, Needham said.
“Until Adams, we hadn’t exceeded any of them. Some of them we gave money back,” he said. For Lowell, the project immediately preceding Adams, the team “hit it right on,” Needham added.
Midway through construction on Adams’ Apthorp and Claverly halls, however, the Covid-19 pandemic threw the Adams House Renewal into disarray.
“The fact that Claverly was all bought, we were impacted mostly by the delay and the slower progress,” Needham said.
That impact on Claverly — a five-month halt to construction and social distancing limits on the number of workers on site — pushed the project 3 percent over budget.
For the next phase of construction — Adams’ Randolph Hall — the budget authorization was approved in the midst of the pandemic. The project’s escalation target increased from 6 percent to 10 percent, but so far, has missed its forecast by at least 4 percent due to increasing costs of materials, accessibility, and asbestos removal.
After these two over-budget projects, the 12 to 14 percent escalation target for Westmorly Hall reflects an expectation that the economy will see a “leveling out of inflation,” Needham said.
Needham said he remains hopeful that the full renewal project will stay within the original projection of $1 billion to $1.6 billion, but “on the higher end.”
Needham noted that similar projects at other universities have struggled with their original timetables, referencing delays to Yale’s residential college renovations project, which began in 1998 and concluded in 2011.
As the interview came to a close, Needham quoted from a speech by the late historian David McCullough at a dedication of the John Adams Courthouse in Boston.
“You can judge people by how they spend their money,” Needham recalled McCullough saying. “And this is money well spent by good people.”
Needham paused, chuckling. “And I believe that sometimes.”
Corrections: April 12, 2023
A previous version of this article incorrectly stated that David McCullough spoke at the dedication of Yale’s residential college renovation project. in fact, he spoke at the dedication of John Adams Courthouse in Boston.
A previous version of this article incorrectly stated that Yale’s full residential college renovation project began in 1998 and is ongoing, set to conclude in 2032. In fact, the full renovations concluded in 2011, and a subsequent residential college renovation project is set to conclude in 2032.
—Staff writer Jackson C. Sennott can be reached at email@example.com.
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