Harvard University should pay more toward housing, scholarships for Cambridge students regardless of university they plan to attend and the city’s direct cash-assistance program for lower-income families, officials said at a Monday meeting.
“Harvard has an endowment of about $50 billion. The university operating budget is about $6 billion,” while the school’s cash payments to the Cambridge in 2023 was around $4.5 million and about $4 million goes to Boston, City Manager Yi-An Huang said.
Institutions such as Harvard and MIT make the payments in lieu of taxes when their status makes property tax-exempt, but “there’s no specific rules or regulations or processes on negotiations of this in state or federal law,” said Evan Bjorklund, assistant city solicitor. When it comes to a wish list, “it should be taken into consideration by the city that not everything is enforceable.”
The state Legislature has a bill requiring nonprofit entities to pay about 25 percent of their assessed property values, but it has not been taken up and would need to be refiled to be acted on.
A 20-year payment agreement between the city and Harvard was last negotiated in 2004; that included a onetime payment of $1.4 million in 2005 and a $500,000 base fee with annual built-in increases of 3 percent supplemented by various one-time payments and base fee increases every 10 years. In the winter of 2023, as the agreement was about to expire, the city and Harvard agreed to essentially extend it by a year to allow for negotiations, Bjorklund said. Harvard has also contributed $20 million to a local housing collaborative.
City councillor Jivan Sobrinho-Wheeler especially wants Harvard to focus on housing. He criticized the university for expanding graduate student enrollment but not expanding housing at the same rate. “Four-bedroom [apartments] that were previously a family living in a four-bedroom are now four separate graduate students,” he said.
The expense of Cambridge housing is also bad for the university’s ability to attract and retain faculty and staff, Huang noted. Much of the housing Harvard plans to build is across the Charles River in the Allston neighborhood of Boston, and Huang wants to see more built in Cambridge.
If that’s the case, Cambridge has to communicate to its residents “that this is not Harvard doing something to them, it’s a priority of the city,” councillor Paul Toner said. “Harvard has expressed to me on occasion that when they do try to build housing, the neighborhood turns out against it.”
Beyond housing
Sobrinho-Wheeler and other councillors also want to see more money for Cambridge high school students, even ones attending other universities. “We have hundreds of students in Cambridge who are having to take on thousands of dollars of debt. And if we can use Pilot contributions for that, we should,” he said.
Numerous city councillors said they wanted Harvard to pay more toward the Rise Up Program, which provides cash assistance to needy families – a program backed by Covid-aid money from the federal government that will soon run out.
“I have heard from many of our families across the city who for whatever reason were not eligible for that support but clearly have a need for that support. If it can be expanded, that would be a great use of these dollars,” councillor Ayesha Wilson said, pointing to the benefits of the Promise Program, which uses money from Harvard and MIT to allow Cambridge students to attend Bunker Hill Community College for free.
More money could go toward universal after-school programs, Wilson said, and the city and Harvard School of Education should be better partners on such initiatives.
Finding a balance
As ideas for spending came up, vice mayor Marc McGovern supplied some historical context. Cambridge was more financially stable when the initial pilot agreement was signed than it is today, as the city worries about hitting a debt ceiling even as more school buildings need expensive repairs.
Huang urged perspective, comparing Cambridge with New Haven, which gets significantly more money from the Ivy League school it hosts, Yale University. “We’re in a pretty good condition fiscally relative to New Haven,” he said.
McGovern, though, thinks that just because Cambridge has done a better job managing its money in the past than New Haven doesn’t mean Cambridge needs less.
“Harvard probably thinks ‘Cambridge doesn’t want to lose us. We’re a part of Cambridge, so they’re not going to push us too hard.’ And we say, where is Harvard going? You’re not going to close up Harvard Yard,” McGovern said.
On the other hand, Harvard does a lot for Cambridge beyond Pilot payments, including being the city’s largest employer, McGovern said.
A building being owned by a university does not by itself make it tax exempt. The restaurants at the Smith Center, or Harvard lab space being rented to for profit companies, are taxable; for a university, exempt uses are educational ones, such as dorms or classrooms.
A stronger
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Allow Harvard University to build some real housing. Something comparable to the Smith Center. Then assess the building at typical commercial rates. This is a win-win. Harvard gets a a more cohesive campus, Cambridge gets substantially more funding, and this relieves some housing pressure. The Observatory hill area or low density housing along Oxford St could support it.