University to Fund Affordable Housing

Harvard President Neil L. Rudenstine is expected to announce a multi-million dollar initiative today to use University money to fund affordable housing in Cambridge and Boston over the next 20 years.

Rudenstine is scheduled to unveil the plan at a press conference at the Kennedy School of Government (KSG) with Boston Mayor Thomas M. Menino and Cambridge City Manager Robert W. Healy.

It will call for the University to give $20 million in low-interest loans and a $1 million grant to three non-profit groups in the Boston area. The loan money will be given by those groups to affordable-housing organizations and the grant will go to fund housing research.

"This is part of what I see as a continuous effort to help build housing stock over two decades," Rudenstine said.

Harvard's Vice President of Government, Community and Public Affairs Paul S. Grogan spearheaded the initiative, which will also include a Faculty advisory committee that he will chair.

The University will loan the $20 million over 20 years at two percent interest, a rate significantly lower than those offered by government agencies and private banks. The money will be dispensed to local housing development groups--$10 million to Cambridge and $10 million to Boston.

Using non-profit groups as intermediaries allows Harvard to take a hands-off approach.

"We don't want to directly underwrite housing initiatives. That's not what we do," Grogan said.

The intermediaries will then dispense both small and large loans to fund developments ranging from renovating existing apartments to building new units and providing special-needs housing.

Harvard selected the three intermediaries--Boston Community Capital, Cambridge Affordable Housing Trust and Local Initiatives Support Corp.--based on their "demonstrated track record and experience," according to Grogan.

"I promised the Harvard Cooperation we'd be paid back," he said.

The $1 million grant program focuses on affordable housing research rather than physical development. According to Grogan, the grant program will promote the testing of new ideas and innovations.

Grogan said the University has no plans to make similar grants in the future.

"This is a one-time allocation. Don't expect it to be repeated," he said. "The University isn't a foundation and we don't want to get into large-scale grant giving."

Advice and Oversight

Besides providing loans and grants, the initiative provides for an advisory committee composed of faculty from many of the University's schools including the KSG, the Business School, the Law School and the Design School.

According to Grogan, the committee will serve to oversee and monitor the loan program, evaluate grant applications and mobilize University resources in support of affordable housing.

Grogan said he hopes the initiative will spark an interest in housing research among Harvard faculty.

"In general, I think this kind of problem has been understudied in universities around the country," he said.

Easing the Housing Crunch

By providing money for affordable housing, Harvard is seeking to alleviate one of the major problems facing Cambridge and Boston.

Since rent control was abolished in 1994, Cambridge has lost about 16,000 price-controlled units and Boston has lost about 7,000 units. This, combined with cutbacks in federal and state funding, has contributed to gentrification in some areas and an affordable housing shortage in the metropolitan area.

"For [Harvard] to create more housing, that means that more families are going to be able to stay in Cambridge," said Toy Lim, lead housing organizer for the Eviction Free Zone, a Cambridge housing advocacy group.

Harvard has taken other steps to improve the housing situation in the past year. In August the University pledged to house more students on the Business School campus, easing the Cambridge housing crunch, and in September the University transferred ownership of a Mission Hill apartment complex to its tenant organization.

The University also pledged to use some of its newly acquired land in Boston for affordable housing. In 1997, Harvard came under fire for secretly purchasing 52 acres in Allston. Yesterday Grogan said this land will be used, at least in part, to benefit area residents.

"We anticipate, pending discussions with neighbors and the city of Boston, that some of that land will be used for affordable housing," he said.

A Good Neighbor

Grogan said he is convinced that the University always provides a valuable service to the community.

But he also said one goal of Harvard's initiative is to improve the institution's image in the community.

"Part of it is doing more, and part of it is making visible what we're already doing," he said.

Grogan said depictions of Harvard as "an occupying army or pestilence on the community," are misleading.

"The stuff that you hear at a rally or city council meeting...is wrong," he said. "It's a caricature."

A Harvard-sponsored report released in September found that the University pumps $2 billion in direct funds into the local economy, a point often overlooked by the metropolitan community, according to Grogan.

"I don't think that it's in Harvard's interest to have a poor reputation in community development," he said.

Local activists said the housing initiative will improve Harvard's standing in Cambridge.

"It shows that Harvard knows about the issues and is willing to take active steps to resolve them," Lim said.

City Councillor and Vice Mayor Anthony D. Gallucio said the plan is an important in improving town-gown relations.

"I've been critical of Harvard's contribution but at the same time I am cognizant of the resource they've been for the city," he said. "I hope this signals a new day for Cambridge-Harvard partnerships."

A High Priority

The initiative moved quickly through the Harvard bureaucracy.

Grogan, who arrived at Harvard in January, has spent much of his career addressing affordable housing and community development.

According to Grogan, Rudenstine approached him "very early" in his time at Harvard to discuss possible ways to enhance Harvard's role in the community.

"He wanted an expanded, more engaged relationship," Grogan said.

But beyond Rudenstine's initial push, Grogan said he was free to develop his own ideas. Much of the work was done over the summer, and by mid-September Grogan had a concrete proposal.

"We had the ball to come up with it, and we proposed it to the Corporation and the president," he said. "It's a concerted effort to do more."