Several years ago, Gregg Pasquarelli, founding principal of New York’s SHoP Architects and SHoP Construction, was standing in front of an audience in Baltimore talking about the business of architecture. Flipping through a slide show, he paused at an illustration of animals, representing the continuum of players involved in real estate development. An elephant stood for hedge funds; a horse for private equity; a shark for private developers (this got a laugh); and a dog symbolized financial institutions. At the end of the line of sturdy creatures, a tiny, delicate butterfly seemed to flutter in the other creatures’ wake. This, Pasquarelli told the crowd, represented the architect. While architects contribute a tremendous amount of intellectual capital to the building process, Pasquarelli said, they are afforded little power or reward because the profession is fundamentally terrified of economics.
“If you do not understand how finance works, you do not understand how a project gets built,” Pasquarelli says today. “Without architects understanding finance, they are relegated to the sidelines of the most important decisions regarding how that building will get completed.”
Pasquarelli isn’t the only one concerned about the fiscal prowess of architects. Deans and professors at U.S. architecture schools are grappling with the shifting realities of architecture and how best to prepare students for what lies ahead. The sources of change in the profession are clear: a global recession; the emergence of technologies such as BIM; the expansive nature of green building, which demands extensive collaboration and an understanding of diverse systems.
What is not so clear is how—or if—architectural education must adapt to meet these new truths. Up until now, graduates have been steeped in theory and design, but have learned little about spreadsheets or tax-increment financing. “Architecture is still tangled up in 19th century mythologies and 19th century curricular assumptions,” says Daniel S. Friedman, professor and dean of the University of Washington’s College of Built Environments and president of the Association of Collegiate Schools of Architecture (ACSA). “The contemporary curriculum concentrates the majority of its intellectural resources and credit hour requirements in design studio. I share many of my colleagues’ concerns about the broad middle ground of the 30,000 architecture students out there. How many are really getting the preparation they need to be competitive and assume leadership? Design is such a tiny percentage of where the money [in development] goes, and it’s time to radically rethink our priorities.”
The priorities of the profession to date have rarely included financial proficiency. Somewhere along the way, architects became a risk-averse bunch, preferring to stay safely ensconced in the studio and letting others—owners, developers, contractors—assume economic accountability. “Following World War II, the distribution of risk and responsibility steadily shifted, with ... much less risk residing with the architect,” Friedman says. He points to the postwar building boom and the B141 contract, which “essentially distributes the risk away from the architect to the client and developer,” Friedman says. “This was because of the architect’s distaste for risk. We weren’t teaching people to build; we were teaching people to point [to] others to build, and the specialized technology and skill that goes into the actual construction of buildings [coalesced] in the construction industry and not in the architecture profession.”
Dan Rockhill is an architect and educator who’s teaching his students to embrace risk—and to live with its consequences, good and bad. In July, news spread quickly that Studio 804, the nonprofit arm of the University of Kansas School of Architecture, Design & Planning that Rockhill directs, was nearing bankruptcy. Rockhill told USA Today that the program had about $25 in the bank after being unable to sell two highly efficient prefab homes designed and built by students.
While frustrated, Rockhill isn’t running from the numbers. Studio 804 is all about giving students a real-world perspective via a year-long class in which they fundraise, design, and build affordable housing (the latest being the first passive-energy house in Kansas). “I tell my students, ‘Don’t be so full of yourselves that you are armed only with ideas. The real defining moment comes with those who can execute,’” Rockhill says.
Execution means that students take care of all business matters, from insurance to contracts to working with suppliers on getting quotes. Molly Fogarty, a recent graduate, participated in Studio 804 last year. “No other experience has prepared me better for learning how important all of the details are, like how to deal with clients quickly and efficiently so you can spend your time where you need to,” she says.
Rockhill sees a disconnect between what is taught in schools and what is practiced in the field. “The first question I ask when a client calls is, ‘What’s your budget?’ Integrating business into an overall design process is absolutely critical, but anything having to do with business is often the first to be cut from academic programs.” Rockhill attributes this, in part, to the perception of money among architects. “It’s not considered a ‘noble’ quality to want to have your design and profit from it at the same time.”
Pasquarelli agrees that the profession’s built-in biases about money affect architectural education. “We believe: one, that it is beneath us to get down and dirty with numbers, and two, that finance is incredibly complicated and difficult to understand. Trust me, it’s not,” he says.
Demystifying finance for architects is at the core of a new certificate program at the University of Texas at Arlington created by professor Michael P. Buckley. Called the Certificate Program in Asset Repositioning and Turnaround Strategies, it is the first in the country to teach architects how to transform underutilized urban structures into revenue-generating commercial properties. “Architects don’t think about how their designs can create more value by creating more revenue,” Buckley says. “Once they get those things in their brain and realize how to calculate and show them to clients, the effects are very powerful.”
First, Buckley says, he gets architects comfortable and conversant in the vernacular of finance. “Like any craft, finance has jargon. Once architects get past the jargon, they get it,” he says. Next, he shows how design can be used to generate profit. “They all know how to use Excel, but they use it to add up costs rather than project revenues,” he says. Students see, for example, how a simple change in a floorplan might increase rent. And they learn the all-important skill of quantifying that revenue and communicating it to the client. “I want architects to become more powerful in shaping their architecture by using economics to afford to do better design,” Buckley says.
Business management is at the core of another new program, at Harvard University’s Graduate School of Design. The RMJM Program for Research and Education in Integrated Design looks to empower architecture students by assimilating design, technology, and business management principles. “Design is not just about nice envelopes and fancy buildings; it is about seeing the business needs of the client,” says professor Spiro N. Pollalis, director of the program. “In my approach, for every design, there is a business plan.”
Pollalis takes full advantage of the Harvard Business School, partnering with professors there to generate joint courses where architects and business students work together. (There are three like-minded programs at other schools, which combine the M.Arch. and the MBA into a dual degree.)
Vishaan Chakrabarti remembers the barriers that existed between the disciplines when he went through school in the ’80s and ’90s. Chakrabarti pursued degrees in architecture, planning, and development, and he felt like a pariah. “When I did all of these things, it was heresy in the schools. You weren’t supposed to talk to one another, and ‘development’ was considered a dirty word,” he says.
Last year, Chakrabarti was named the director of the Real Estate Development Program at Columbia University’s Graduate School of Architecture, Planning, and Preservation. “In most programs, there is usually a firewall between real estate and architecture and urban design,” he says. “I think that comes out of a historical circumstance where all of these professions viewed themselves as adversaries.”
Columbia’s program approaches this from the opposite view. About half of the students come from architecture, the other half from banking and real estate. (Friedman of the ACSA says there is a proliferation of real estate programs being integrated into architecture schools.)
Chakrabarti envisions graduating a professional who has the capacity to work across fields, use the latest technology to its full potential, and understand the complex nature of urban development. “Imagine a world where a developer who is also an architect can alter the massing of the building in Rhino, and within seconds can understand the financial impact on their ... spreadsheet, and can understand what it means to the neighborhood in GIS. The profession becomes fluid across the fields,” he says. “I don’t mean to sound grandiose, but I think we have the potential to revolutionize the profession.”
In the Co-Op program at the University of Cincinnati, students get a taste of professional practice through an intensive internship program. The school pioneered cooperative education in 1906; today, students alternate academic quarters between classroom study and paid professional work. “We try to give more of a critical understanding of the profession and get students more in tune with how architectural practice works,” says Alex Christoforidis, assistant professor of architecture in the Division of Professional Practice.
Students in the master’s program participate in a series of workshops at firms, covering such topics as project process and how to use construction documents as a communication tool. They also visit a development company that employs architectural staff in order to understand how design is determined by financial decisions.
“At each firm, they learn different aspects of architecture practice that are not normally taught in an NAAB-accredited architecture school,” Christoforidis says, referring to the National Architectural Accrediting Board, the agency responsible for accrediting professional degree programs in architecture in the United States.
In fact, many of the business programs described above are offered in addition to courses required by official NAAB standards. Business is not an integral part of the accredited architecture curriculum. “The NAAB guidelines are about 20 years behind the times regarding what an architect actually needs to thrive in practice,” Pasquarelli says.
Friedman agrees that it’s time to analyze the extent to which NAAB criteria are appropriately aligned to the real conditions for practice: “We are going to need to train architects to be knowledgeable in ... [technology and business], which will require some redistribution of credit hours in the curriculum.”
In 2008, the NAAB did revisit its conditions for accreditation, and the revised standards go into effect in 2011. (The organization re-evaluates conditions for accreditation every five years, making 2013 the next opportunity for overhaul.) Andrea S. Rutledge, executive director of the NAAB, says the fiscal education debate always rears its head during these discussions. “This is a common accusation leveled at the NAAB: ‘You’re not doing enough to teach our students to be prepared for the financial realities of the practice,’” Rutledge says. “It’s important to remember that NAAB criteria are the minimum standard, and institutions and programs are free to go beyond this minimum.”
Rutledge says the debate at this last evaluation centered on the handoff between education and the intern development program (IDP). “‘How much do we teach in school, how much do they learn in IDP?’ That was the discussion,” Rutledge says. “Where the board ended up was, when [students] come out of school, they need to know what questions to ask. They need to understand that they have responsibility for financial management of projects and they need to know what to learn next. Their next learning opportunity is internships, and that’s where they get the deepest learning on firm management, project management,” she says.
“The fact is, there is only so much that can be crammed into the curriculum, so the question becomes: ‘What are you going to give up?’” Rockhill says about adjusting NAAB standards. “That’s a tough call. But as the profession emerges from the recession and begins to lick its wounds, it’s going to become so competitive that a keen sense of business is integral [to] survival at this point.”