Art Works Blog

Deconstructing Demand for Cultural Facilities

Construction Zone by flickr user Matt Mansfield

When people talk about research being catalytic, they tend to downplay the chemical nature of the reaction: sparks will fly.

At the NEA, Chairman Rocco Landesman has relied heavily on research and evaluation to guide new policies and programs. Of these, the most notable is Our Town, which uses well-documented strategies to strengthen community livability through the arts.

But as the Chairman showed us last year, even when research is not used directly to launch new initiatives, it can provoke. In January 2011, observing the large disparity between the growth rate of not-for-profit arts organizations on the one hand, and lagging arts participation rates on the other, our boss ignited a public debate about the importance of supply and demand to the not-for-profit arts sector.

A new report released today manages to revive this debate while affording acute practical insights as well. Not only does it apply hard-boiled economics to study the complex dynamics of supply and demand (in this case, for arts and cultural buildings); it has policy dimensions for the concept of creative placemaking.

Set in Stone: Building America's New Generation of Arts Facilities, 1994-2008, was authored by a team of researchers for the Cultural Policy Center at the University of Chicago. (The lead author, Joanna Woronkowicz, currently works for the NEA's Office of Research & Analysis; see her March 2, 2012 post to this blog.) The study was backed by the Mellon, Kresge, and MacArthur Foundations---funders with a clear stake in answering research questions about the cultural building boom that occurred in the late 1990s and early 2000s, and about factors critical to the success of cultural infrastructure projects.

Escalating Project Costs

The first takeaway is that there was indeed a cultural building boom in the U.S., primarily between 1998 and 2001, as shown by building permit data from McGraw-Hill Construction. The boom was loudest in the Southern states, which also had seen the sharpest rise in population, education, and wealth, compared with other regions. (Some of this growth in building may be regarded as "catch-up," the authors write, noting that Southern states had the smallest number of cultural facilities at the outset of the study period.)

I'll return momentarily to the link between building demand and U.S. demographics. To quantify the boom: the total cost of cultural construction projects was about $16 billion over the study period. Of those buildings, one in four cost more than $21 million (also the mean cost per building in the study), and half of the remaining projects cost over $11 million. From 1999 to 2003, total spending on cultural buildings outpaced that for hospitals and kept on par with education infrastructure spending.

Performing arts centers made up the majority (54 percent) of the total cost of all cultural infrastructure over the study period, followed by museums (38 percent) and theaters (8 percent). By U.S. region, the South accounted for 32 percent of the cultural building costs of all regions combined, compared with 25 percent for the Midwest, 23 percent for the West, and 20 percent for the Northeast. On a local level, cultural infrastructure spending per capita was greatest for cities with populations below 500,000. For that matter, many small cities were first-time builders of cultural infrastructure, according to the report.

Building permit data offer plenty of hard numbers about costs incurred by cultural infrastructure projects, but they tell only half the story. The report authors chose a random representative sample of 56 cultural building projects that had started roughly between 1999 and 2003. From interviews and financial information, the authors were able to gauge the actual final costs of the buildings in comparison to values listed on the building permits, which often included only the starting construction costs.

The results? The average final costs of performing arts centers were 82 percent greater than their building permit values; average final costs for museums and theaters were 69 percent greater and 19 percent greater, respectively. These findings underscore a main theme of the Set in Stone report, that many cultural builders failed to anticipate the hidden costs (both for construction and upkeep) of their grand designs.

Further, as cultural buildings proliferate, they incur new costs downstream for renovations and additions. The report shows that for each additional cultural building a city had, it spent more per-capita per year on cultural building projects.

The Demographics of Cultural Demand

Much of the report resonates with the NEA's experience in studying supply and demand. In the last couple of decades, we've seen the number of arts and cultural organizations climb as a proportion of U.S. not-for-profit organizations, and we've also seen the number and percentage of arts degrees continue to rise.

Admittedly, these metrics are crude indicators of the overall supply of arts and cultural goods and services to a U.S. population. Yet they stand in contrast to overall rates of arts participation, as tracked by U.S. Census data. According to this measurement of what economists would call "revealed preference," American adults have been attending major categories of arts events at far lower rates than in the past. (These data triggered the supply-and-demand controversy that played itself out in this blog last year.)

So the University of Chicago study is to be welcomed for deepening this inquiry, this time for cultural buildings. Conducting multivariate analyses at the city level, the authors found that population change, education, and median household income all had positive effects on a city's per-capita investment in cultural infrastructure.

Education, closely correlated with income, turns out to be one of the best predictors for a city's likelihood to spend on cultural buildings---a finding that evokes the NEA's own research suggesting that education levels drive arts participation rates. (Interestingly, the youth factor---whether a large share of a city's population is between 21 and 35 years old---does not seem to play a role in determining a city's likelihood to build cultural facilities, despite literature citing the importance of this demographic to shaping a creative city.)

Lessons for Creative Placemaking

It's tempting, then, to imagine that as a city's population grows in size, education, and prosperity, it aspires toward monuments of its aesthetic and civic identity. But whose dreams are being fulfilled? Artists and arts organizations? Community leaders? The average community member?

Staying with the supply-and-demand motif, one would expect a consistent, positive relationship between the number of artists and arts organizations in a city, for example, and its per-capita spend on cultural facilities. But during the boom years, the presence of artists and arts organizations was inversely correlated to cultural building investment; the addition of artists or arts organizations to a city resulted in less per-capita spending on museums, theaters, and performing arts centers.

This finding becomes the report's harshest indictment: that the whole system could have been overbuilt. In surveys conducted by the study team, the desire to provide space for community arts groups emerged as a main reason for building performing arts centers and theaters. Then why, during the years when cultural building peaked, did the activity apparently not respond to increases in the cultural sector's demand for such facilities? To which factors, alternatively, did cultural facility investment respond?

For many researchers and practitioners alike, the most helpful unit of the report will be the four case studies: Art Institute of Chicago; AT&T Performing Arts Center (Dallas, Texas); Long Center for the Performing Arts (Austin, Texas); and Taubman Museum of Art (Roanoke, Virginia). Together with a chapter on "the feasibility of cultural building projects," they spell out key decision points that eased or thwarted a project's success.

The report cautiously states that no uniform criteria can guide the development of all cultural buildings of the future. Still, from noting the frequent clash between lofty missions and on-the-ground reality, one concludes that a community's artists, arts organizations, and arts participants should be brought in as a more integral part of the planning process for such facilities.

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