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- Charlie Munger is being heavily criticized for funding and designing a near-windowless UCSB dormitory.
- Warren Buffett's right-hand man's approach to architecture projects mirrors his investing style.
- Munger is contrarian, cares far more about value than style, and takes a long-term view.
Charlie Munger, Warren Buffett's longtime business partner, is under fire for designing and bankrolling a virtually windowless mega-dormitory for the University of California, Santa Barbara. Munger's approach to investing may help explain his controversial vision for the project.
A reimagined dorm
Munger, the 97-year-old vice-chairman of Buffett's Berkshire Hathaway conglomerate, is an amateur architect who's designed buildings since the 1960s. A few years ago, he committed $200 million to help finance the UCSB dorm on the condition that his design for the building would be followed.
The investor has proposed an 11-story building with beds for more than 4,500 undergraduates. However, Munger Hall would have only two points of entry and exit, and 94% of the single-occupancy rooms would lack windows as they're in the interior of the building.
Munger has framed the design as a trade-off, sacrificing fresh air and natural light for the privacy of individual rooms and the benefits of large common areas. However, an architect on the project recently quit, blasting the design in a letter as a "social and psychological experiment" on students, and a concept that is "unsupportable from my perspective as an architect, a parent, and a human being."
The backlash was first reported by the Santa Barbara Independent.
Munger discussed how he approaches architecture in an interview in The Wall Street Journal in 2019. He likes breaking the mold, cares far more about functionality than aesthetics, and designs with an eye to the future, he told the newspaper.
For example, he designed Harvard-Westlake's middle-school library with several computer rooms that had removable walls. As a result, they were easily converted when students switched in droves from desktop computers to laptops years later.
Munger also blasted the idea of boys' and girls' bathrooms being the same size. His criticism spurred Harvard-Westlake to update the plans for a science center he was funding so the girls' bathrooms were larger.
In the case of UCSB, Munger told The Journal that students preferred having their own rooms to having bedroom windows. "The minute I saw that, I realized that was the correct solution. And everything I thought before is massively stupid," he said.
Meanwhile, a focus on communal spaces will encourage residents to mingle and share ideas. "The students will educate themselves and one another much better if we do the housing right," he predicted.
Investor meets architect
Buffett drew a parallel between Munger's architectural and investing skills in a special letter to shareholders in 2015. "Berkshire has been built to Charlie's blueprint," he said, noting that Munger redesigned Berkshire to buy wonderful businesses at fair prices, not fair businesses at wonderful prices.
Munger takes a contrarian bent, value-focused and Spartan approach, and a long-term view to both disciplines. Similar to how his dorm breaks from convention, he made his fortune by buying and holding unloved stocks and ignoring naysayers. His decision to do away with windows to maximize capacity is comparable to how Costco, his favorite company, skips the frills in favor of relentlessly passing its cost savings on to customers.
Moreover, it's not surprising that Munger was willing to sacrifice windows, given he's notoriously ascetic. Buffett once joked that his partner's idea of traveling in style is an air-conditioned bus, and he would only spring for that if the fare was a bargain.
Finally, Munger's long-term perspective can be seen in how he and Buffett have held stocks such as Coca-Cola and American Express for decades. The investor may be going the extra mile in addressing the shortage of student housing on UCSB's campus, in anticipation of the problem getting worse.