Walsh Tours Harvard Housing

City Councillor William H. Walsh on Friday toured two Harvard housing complexes to test his theory that the University profits from the city of Cambridge by taking advantage of a longstanding real estate agreement.

"On Friday I visited Peabody Terrace and the apartments on Irving Street," said Walsh. "I wanted to see how affiliated housing gets exempted from paying taxes and what they will do on December 31 when their agreement expires."

Walsh would not discuss his conclusions, saying that he could not draw any because Harvard Real Estate comptroller Sheldon Tandler, who conducted the tour, would not let him bring along an appraiser. Walsh said he would meet with the appraiser later last night to discuss his impressions.

Although Harvard's affiliate housing is tax-exempt, the rents it receives do affect city revenues. For the past two decades the University has paid the city 11.11 percent of its annual rent income "in lieu of taxes." The payment came to $989,543 in fiscal 1988. Harvard also paid the city $2,561,642 on its taxable property.

Walsh says those revenues may be too low if Harvard is undercharging its affiliates for housing in Peabody Terrace and similar buildings. The councillor's law practice specializes in real estate litigation.

According to Walsh, the Council should consider putting the affiliate housing back on the tax rolls when the in-lieu-of-taxes agreement expires this December 31, because it might produce more revenue for the city.

Walsh said he wanted to determine if the rents Harvard charges graduate and undergraduate students to live in the affiliated housing are at market rates or if Harvard is keeping them excessively low to avoid paying the city as much each year.

The councillor said Cambridge might gain more revenue if the University were to raise its rents or pay taxes on the buildings. Much of the University's property is tax-exempt because it belongs to an academic institution.

"The city gives a lot to Harvard in the way of police protection and such, and Harvard should give back to the city," Walsh said.

Harvard Associate Vice President for State and Community Affairs Jacqueline C. O'Neill opposed Walsh's concern over housing prices, however, and said, "Rents are fair at Peabody Terrace. The illusion from the outside that Peabody Terrace should be rented out to our tenants at luxury rates is wrong."

"We base our rents on what our affiliates can afford," she said. Raising rents would drive Harvard's affiliates into the already cramped general market for inexpensive rentcontrolled apartments, she added.

City Councillor Alice Wolf also opposed Walsh's argument, saying, "I have always felt that Harvard charges high rents, market-rate rents. As far as the proposal is concerned, Harvard has made a point of saying that if it were to be paying property taxes it would be paying less."

And Councillor David E. Sullivan said last night that until the city manager's office had assessed Harvard's property and weighed the relative merits of both the existing arrangement between the city and the University and the proposed one to tax the housing, he could not say which plan he endorsed.

"I'm just going to be looking for which plan gets more revenue for the city," said Sullivan. "And we'll just have to wait for the facts and the meeting to see about that."

Walsh's proposal is scheduled for a hearing at the city council meeting on October 17.