When Christine Varriale first moved into the Allston-Brighton neighborhood of Boston, it was largely by chance. She had been living with roommates in college, and once one of them found a job in nearby Watertown, the trio sought to relocate within commuting distance while living in the city proper. “It was kind of by chance, I guess, by necessity of my roommate’s job,” she explained to me in an interview.
Since she arrived ten years ago, Varriale has changed apartments and moved to Lower Allston, but the allure of the district has remained the same. “Allston-Brighton’s always been a very vibrant community — it’s not only a community of artists, but a lot of immigrants live here,” she said. “There’s a lot of really good food, places to go, and places to hang out.” And for Varriale, who runs a music blog and works as a concert promoter, the local music and arts scene gave the community its color.
Though Allston-Brighton (sometimes referred to as two separate districts, sometimes in the collective) historically has had relatively high rates of flux in its population due to its proximity to Boston universities, the neighborhood has seen even more significant changes over the last decade or so, many of which began even before Varriale decided to move in with her roommates.
For starters, the Boston Landing property — a 15-acre mixed-use facility along the turnpike home to New Balance and Boston Celtics facilities, among others — brought in a surge of development. According to Varriale, developers started seizing on the chance to market housing around the newly built commuter line station as “transit-orientated.” “All of these developers are like …. ‘We’re going to make a ton of money,’ and they aren’t wrong,” she said.
Furthermore, in 2007, Harvard University unveiled its “Allston Initiative” for the district, planning to “turn industrial land now used as parking lots and truck and rail yards into an urban center,” according to Reuters. Harvard has since constructed and opened a 500,000-square-foot science campus as an expansion of its John A. Paulson School of Engineering and Applied Sciences — or, as Varriale affectionately calls it, “the giant cheese-grater-looking thing.”
While certain Allston-Brighton community members who talked to me value the influx of new residents and jobs, Varriale said that many more residents are concerned about the fate of the district moving forward. She said that although there’s a Harvard-Allston task force, she doesn’t know who runs it nor has she been invited to a meeting, “even though I practically live on the Business School Campus.” And, as she candidly told me, “the way that I’m speaking to you about it is much nicer than you’ll hear from a lot of the people in my neighborhood. Most people are just like, ‘Fuck Harvard.’”
“Swallowing the Neighborhood”
Harvard’s expansion into Allston is but the most recent development in the history of a university that has slowly engulfed and reshaped the communities around it. As Harvard’s constituent schools and laboratories have increased in size and expanded their reach, so has the physical footprint of Harvard’s campus and affiliated buildings.
According to data from the Harvard Open Data Project, Harvard now owns nearly 10% and 6% of all land in Cambridge and Allston, respectively. Its effect, according to the same study, is simple: “The dominance of Harvard’s capital prioritizes the interests of the university over those of the people the university may displace.”
Harvard brings with it newfound jobs, educational opportunities, and spaces, but they are often mismatched to the interests and desires of the pre-existing community. Rather, jobs at an institution like Harvard and the immediate spaces surrounding it tend to serve a small subset of the population: well-educated and, more often than not, well-to-do.
Though the long-term effects of Harvard’s massive expansion into Allston are yet to be seen, the change in the face of Cambridge over the last few decades gives Allston residents enough to worry about. According to HODP, Harvard’s land in Cambridge has increased from 111,279 to 291,216 square feet between the years 2000 and 2018. The effect on housing is easy to see: In the same years, the average home price has appreciated 100.36%, according to Neighborhood Scout, far beyond the national rate of appreciation. After running a statistical model on Harvard’s land growth, rental prices, and demographics, HODP aptly summarized: “Harvard’s growth has brought shrinking populations of low-income people of color.”
Harvard’s continued encroachment, including its most recent expansion into Allston, begs the question: How should universities engage with their surrounding communities? Furthermore, what happens when a university, particularly an elite, well-endowed Ivy League institution like Harvard, sees itself as separate from the communities it inhabits?
In Cambridge, the university was met with resistance, after a certain point. In an interview with Harvard Magazine, Sally Zeckhauser — former head of Harvard Real Estate Inc. and former Harvard Vice President for Administration — said that in its expansion in Cambridge, Harvard began running into “mature neighborhoods with sophisticated and politically active residents often seeking to preserve things just as they were.”
After displacing all the residents who were not “sophisticated and politically active” — a dog whistle for those predominantly low-income and predominantly non-white residents displaced by the university — Harvard turned its attention to its next victim: Allston. According to Harvard Magazine, Harvard now owns 341 acres of land in Allston, as compared to just 219 in Cambridge. Meanwhile, many Allston residents like Varriale have a “fear of Harvard just kind of coming in and swallowing the neighborhood.”
“Realpolitik”
The rocky relationship between Harvard and Allston is indicative of how elite universities like Harvard position themselves amidst a community that often does not directly reap the benefits of said university. While universities may be known internationally for their research and scholarly work, someone unaffiliated with a university living two blocks down may never see a direct benefit in their life. More often than not, universities simply exist within cities, instead of as a part of a city.
In fact, surrounding communities and municipalities often foot the bill for their colleges — as nonprofits, universities are exempt from paying property taxes, even in cities where significant portions of land are un-taxable. For a large institution like Harvard, this translates into millions of dollars yearly in lost revenue for the City of Boston.
This money is especially important for a city like Boston. In the Boston area, only a meager 50% of land can be taxed, due to the large amount of nonprofit, state, and federally-owned properties. Of tax-exempt land, nearly 500 acres belong to the various universities and colleges that have landed Boston a reputation as a job and talent center. However, William Fischel, Professor Emeritus of Economics and Legal Studies at Dartmouth College, explained in an interview that these institutions “had been exempted because they were supposed to be doing charitable work and so forth,” but nonetheless “impose some costs on the town — the fire department and the ambulance service and schools and so forth.”
In order to recoup some of the lost revenue from the property tax — “our main form of local taxation,” as Fischel explained — Boston began a Payment in Lieu of Taxes (PILOT) program in 2012, which asks educational, medical, and cultural sectors with property valued over $15 million to voluntarily donate a portion of their assessed property tax value per year, around 25%.
However, cities cannot legally require universities to provide their PILOT payment amounts — generally, these institutions are exempt under state tax code — and program performance indicates just as much. In the fiscal year 2020, Boston’s PILOT program shows major universities failing to meet their pilot goals: Harvard under-contributed by nearly $2.8 million dollars, while Boston College and Northeastern University only contributed 23% and 68% of their requested amounts, respectively. In total, Boston Educational PILOTs were under-funded by $16.4 million dollars in the 2020 fiscal year.
It may be helpful to note that the scope of this investigation extends only to the relationship between Harvard and the City of Boston, as Harvard has a separate 50-year long PILOT agreement with the City of Cambridge that was independently negotiated in 2005.
Cities also have very little power to enforce the terms of PILOT contracts. According to Fischel, one of the only tools that cities have in their toolbox is changing the terms of business for future cooperation (or the lack thereof) with educational institutions, a “kind of realpolitik.” For example, Boston could de-prioritize a Harvard application for a building permit, citing lack of PILOT payment, but in terms of hard enforcement, the reality is that cities are unable to coerce institutions into satisfying the negotiated amounts.
As long as institutions like Harvard know that the city depends more on them than they depend on the city, the sad reality is that cities have very little leverage at the bargaining table. The state of PILOT payments in Boston, with fewer and fewer institutions satisfying their requested amounts — dropping from 48 percent in 2012 to 23.4 percent in 2019 — is indicative of the lack of cooperation between the institutions of higher education and the cities directly outside their doorsteps.
PILOTS ‘just the tip of the iceberg’
The reality is that many cities, especially those with a smaller property tax base like Boston, are cash-strapped in their municipal budgets. Thus, PILOTs provide a much-needed dependable source of income to cities, but only when institutions fund them consistently. Yet in Boston, tax-exempt organizations have failed to meet the city’s PILOT goals by over $100 million since the program’s launch just nine years ago.
In 2017, the Boston-based PILOT Action Group launched. Its aim is to hold Boston’s wealthy nonprofits and the city itself responsible for full PILOT payments, while advocating for a series of reforms that they claim would make the system more transparent and accountable. Last July, I spoke with two of the group’s leads, Enid Eckstein, a longtime organizer with the Service Employees International Union in Boston, and Jonathan Rodriguez, an organizer with the Boston Teachers Union.
In an interview, both of them highlighted the Boston Globe’s race investigation from 2017 as an initial sparking moment. The Globe found that despite Boston’s reputation as a “liberal bastion,” “inequities of wealth and power persist, and racist attitudes remain powerful.” Eckstein noted the famous hospitals and universities in Boston are not “representative of the communities they serve once you get beyond the entry level job,” saying that both employees of and visitors to the institutions alike do not reflect the directly surrounding community.
For the two activists, PILOT payments are just the “tip of the iceberg” — according to Eckstein — in a conversation long overdue about how institutions like Harvard and other universities in Boston perpetuate systemic racism and structural inequities. Gonzalez said that the vision of the PILOT Action Group is to create a system where universities “are our partners,” as opposed to the status quo, where “many of them do act like they’re in an ivory tower.”
In 2015, the Federal Reserve Bank of Boston found that the average net worth of a Black family in Boston was just $8. Gonzalez said that tackling structural inequities to this degree would not be possible “without institutions in our city stepping up” and paying their due share. Indeed, in the summer of 2020, Boston Mayor Marty Walsh declared racism in the city a public health crisis.
Eckstein and Gonzalez said that institutions like Harvard should have no problem making good on their commitment to the city. For starters, they are already getting a good deal on PILOTs: Their requested contributions are based on decade-old tax assessment data. The two said that the city first planned to re-evaluate properties every five years to update to current market rates. As noted earlier, the price of real estate in the Boston metropole has exploded since the 2010 assessments used for the first iteration of PILOT — and yet, the city has not re-assessed the properties. According to the group’s report, the valuation of tax-exempt land participating in PILOT skyrocketed from $28.2 billion to $43.6 billion from 2009 to 2017, meaning a loss of millions per year for the city that directly affect its ability to provide services to the great population.
Furthermore, Gonzalez noted that the hedge fund fees that the “big four schools” in Boston — Boston College, Boston University, Northeastern, and Harvard — paid in 2016 amounted to far more than the requested PILOT payments per year. Their report details that Harvard paid an estimated $118 million in hedge fund fees in 2016, a year that Harvard underpaid their PILOTs requested by a comparatively small amount of $2.6 million. A common joke around elite institutions revolves around the concept of Harvard and other similar schools being “hedge funds with a school attached”; Harvard’s inability to fulfill their commitment to the community serves only to further this narrative.
However, in the wake of a national conversation about race, wealth, and systemic racism following the killing of George Floyd, the PILOT program saw increased attention in Boston. According to Eckstein, a coalition of eight city councilors signed onto a letter written by current Boston Mayor and then-City Council President Kim Janey, which had a demand to look “really seriously at the PILOT program” as part of the Council’s goal to “really address institutional structural racism.”
At the end of the day, Eckstein said that their campaign is one “about transparency and the city holding these institutions accountable.” She cited the city releasing detailed spreadsheet information for each institution’s PILOT contributions as an example of how the PILOT Action Group’s call for accountability has succeeded in the past. When I spoke to her, though, she said that the main goal at the moment was to bring the city to call the institutions to the table and request them to each be a “responsible neighbor in our city.”
‘An unbelievable example of economic and racial injustice’
Harvard’s involvement in terms of PILOT contribution is by no means an exception within the community of elite, wealthy universities. Although each university has a different structure with its host community — with some opting to pay property taxes, and others entering into voluntary contribution agreements — schools like Cornell, Princeton, Columbia, and the University of Pennsylvania have each received large pushback from their communities due to a perceived underpayment to their cities. Throughout last summer, however, Penn — which has not paid a single cent in PILOT contributions to the city of Pennsylvania since 2000, according to the Columbia Spectator — saw a resurgence in activism urging the university to make good on its commitments to the community.
Penn for PILOTs, a faculty- and staff-led group at Penn, gained a resurgence of support this last summer. Citing a $1 billion deficit to the Philadelphia School District over the next five years and Philadelphia’s highest poverty rate among the ten largest cities in America, the campaign argued that “Penn has a duty to contribute to the city that sustains it.” As of the writing of this article, the campaign’s petition calling for Penn to pay PILOTs had over 1,100 signatures.
According to Mary Summers, a political science lecturer and Penn for PILOTs organizer, Philadelphia is easily the “poorest big city in the United States,” leading to dramatically reduced funding for public education. In an interview, Summers said that the public school district was plagued with issues ranging from asbestos in the schools to constant teacher shortages.
Much like Harvard, Penn occupies a sizable portion of all land in the city of Philadelphia, owning nearly 10% of all tax-exempt land within the city. Yet, the university claims that its other services provided to the city amount to far more than the value of the PILOTs requested per year: as Summers puts it, Penn-hired consulting firms put out a study in 2014, in which they wrote that Penn’s model of engagement with the city was “collaborative,” rather than “transactional.”
For example, Penn offers many courses they term Academically Based Community Service, where Penn sends students and staff to conduct service work within high-need areas in exchange for academic credit. However, Summers said that this involvement is “all on Penn’s terms” and does very little to address the true needs of the communities. She said, “Desperately underfunded schools, where there’s turnover of principals and staff cannot use these volunteers. It just contributes to the chaos. It makes everything worse.”
Instead, the core issue at play remains the availability of capital funds for the school district to offer quality education to its students. Philadelphia’s schools — which receive 64% of their funding from property taxes — spend $12,570 per student per year, as opposed to Chicago’s $13,764, New York’s $16,035, or Boston’s $18,626, according to the Pew Charitable Trusts. And the difference in funding for Philadelphia public school students compared to that of students in suburbs just a few miles away, Summers said, is “an unbelievable example of economic and racial injustice.”
Penn’s collaborative model has focused on creating an environment in and around Penn (dubbed “University City”) with lots of “investment beautification.” Summers said that “now a lot of that is viewed as having contributed to gentrification, but Penn regards it as a genuine commitment to the community.” The issue, however, lies in how much of the new University City community is Penn-related transplants, and how many original residents have since been displaced due to Penn’s gentrification.
Rick Krajewski, a West Philly community organizer who successfully ran for Pennsylvania State House, also commented on the rapidly changing nature of the area surrounding Penn. A Penn alum, Krajewski began organizing after volunteer-teaching in Philadelphia public schools in 2015 and seeing firsthand the educational inequities.
As a district anchored by a university, new transplants to the community are typically white-collar, educated professionals. “Because of that, you have developers that are regularly using this opportunity to drive up market rate housing. You have institutions like Penn that are creating policies to incentivize their development of the district,” Krajewski explained. Put simply, “all of this happens at the expense of the existing community.”
Penn had two options while facing the issues of an urban community in the late 90s and early 2000s — either “invest and support existing structures” or “create its own community in lieu of the existing community.” By choosing to pursue policies such as offering mortgage down payments to Penn employees and creating a University City Police Department, Penn chose the latter — causing a distinct rift between the university and its surrounding community. At the same time, by claiming that their policies were benefiting the whole of Philadelphia and ignoring its PILOT responsibilities, Penn hurt the entirety of the city.
Krajewski, who ran on a platform of decarceration and criminal justice reform, said that Penn’s lack of funding extends far beyond just the sphere of education. With lead in drinking water and without quality education systems, Philadelphia is “setting children up for failure” and perpetuating mass incarceration by “giving people no other choices to sustain themselves,” according to Krajewski.
The first step in charting a step forward is to listen to the demands of Penn’s surrounding community — especially now, when the pressing needs of a budget-strapped school district have been made even clearer. This open conversation means putting the perspective of the university in the back seat and understanding the mutual needs of the community. Krajewski said that fundamentally, Penn needs to move from the “default to think about the community being the people that are attached to the university instead of the people that are part of the larger community that the university inhabits.”
Are they really benefits?
A key contention of the PILOT Action Group is that the benefits that universities claim to offer their surrounding communities are horribly misaligned with the actual demands and desires of the communities. Boston’s PILOT program arrangement allows up to half of requested contributions from institutions to be offset by so-called “community benefits,” which are defined as “services that directly benefit City of Boston residents.” Yet, Eckstein and Gonzalez of the PILOT Action Group contended that the broad nature of the city’s definition allows organizations to appraise programs that have very little direct impact on Boston communities, particularly those which are most underserved.
A quick look at Harvard’s 2020 community benefits summary reveals some “benefits” to the community that may not necessarily be the highest priority of Boston residents. For example, Harvard imputed the entirety of Arnold Arboretum’s operating budget, which totaled $11 million, as a community benefit. And in 2019, Harvard also considered offering $33,000 of scholarships to 16 individual Boston-area high school students as $33,000 of benefits to the entire Boston community, as well as $221,500 worth of scholarship aid to five Boston teachers for a degree from the Harvard Graduate School of Education.
The narrow nature of these programs reflect a general trend of what Eckstein calls “piecemeal,” as opposed to a strategic approach. In total, Harvard claimed that the sum of its community benefits in 2020 exceeded $21 million, far surpassing the $6.6 million in PILOTs eligible to be offset by the community benefits grant. Therefore, of Harvard’s initial $13.1 million requested, and after a $3.78 million cash contribution, $2.77 million in requested PILOTs still remained unpaid.
A spokesperson for Harvard University told me that Harvard pays property taxes on land not used for educational purposes while reiterating Harvard’s commitment to community benefits.
“As a nonprofit, Harvard engages with both Boston and Cambridge in a variety of important ways, including participating in both cities’ voluntary PILOT programs, paying municipal taxes on the University’s non-exempt property, as well as through meaningful, and–increasingly more critical–community programs, initiatives and outreach,” wrote Brigid O’Rourke, Director of Communications and Outreach at Harvard.
“These local benefits are an important extension of Harvard’s mission, serve thousands of local residents every year, and reflect years of collaboration between the University, its neighbors, and city partners.”
But Eckstein and Gonzalez didn’t contest that some of Harvard’s programming has a tangible impact on the community: for example, Public School Partnerships offers “responsive and innovative programming for Boston and Cambridge educators,” while The Family Van offers free curbside health screenings. Nor do Eckstein and Gonzalez wish to paint Harvard and other universities as all-malevolent actors. However, putting pressure on the city and institutions to collaborate strategically on community projects would yield much more effective results, focusing on addressing the innate roots of problems instead of patchwork efforts to solve the effects thereof. Instead of looking to offer a select group of students opportunities — O’Rourke pointed me towards the $4 million in financial aid offered to the 84 Boston students studying at Harvard— a true community benefit would be an initiative to uplift educational resources for all students across the district.
Eckstein and Gonzalez anchor their vision of true community benefits within the social determinants of health: “the conditions in which people are born, grow, live, work and age,” according to The Kaiser Family Foundation. In Boston, this translates into addressing economic stability, housing, food deserts, education, and many other holistic factors. The stress caused by housing instability due to the increasing sprawl of new development, the inability to gain further opportunities through badly-funded education, and the pressures of a constant struggle to commute to work all ultimately impact both the physical and mental health of Bostonians, and especially so on low-income and racial minority populations.
Boston’s PILOT portal already categorizes all PILOT community benefits into categories: In 2020, education topped the list with $65 million in calculated value, with “Community Health” in second, at $29 million. Ranking in last in the list was housing — one of the largest issues facing Boston residents — at just $876k, or just above the median price of a single-family home in Boston. The PILOT portal also broadly boasts that $53.4 million in grants and scholarships were distributed to Boston residents, but Gonzalez contested that this money impacts the lives of the most vulnerable students. He claimed the scholarship winners tended to be higher-achieving, nonrepresentative students: “They don’t look like the wider population of Boston kids.”
Instead, true benefits for the community would serve to act on the community’s needs first, as opposed to the universities and other nonprofit institutions blindly guessing what needs the community might have. Eckstein shared an anecdote about meeting with Harvard officials about the PILOT program: “They were very anxious to do their shock and awe presentation about how awesome their community benefits were. And we kept saying, ‘Yes, we understand you do really good things, but that’s not our conversation here.’”
Varriale also testified to the frustrating gap between Harvard’s offerings and the community’s needs, as a resident of Lower Allston. O’Rourke, the Harvard spokesperson, suggested I examine the Ed Portal — which according to its website, “offers innovative learning opportunities through collaborations among Harvard University, Allston-Brighton, and the greater community” — as an example of Harvard’s community engagement. But, when asked, Varriale couldn’t offer a single person who had actually used the services provided by the Ed Portal — “I’m not sure that many people in the community actually know what the Ed Portal offers.”
Instead, with the renewed attention to racial disparities this last summer, as well as following former Mayor Walsh’s declaration of racial injustice as a public health issue, institutions and the city should band together to focus on specific determinants of health and address those needs directly. Similarly, Eckstein said, “One of the things we’ve advocated for is to say: bring all the institutions together and let’s take on one or two major projects.” She cited an example of a previous mayor’s attempt to address the opioid crisis, which became “too fragmented.” Tackling a set issue for a single fiscal year, such as housing or community health, would combine the resources of some of the world’s leading institutions to eliminate the need for some of the programs offered as “community benefits” in the future.
‘The time for action and reform’
In early August, the PILOT Action Group hosted a virtual town hall. Eckstein opened up to the bilingual audience of over 100 by saying that “because of a recognition of racism as a public health crisis in our city, and underlying inequities in the city, we believe the time for action and reform is now.” At the end of the call, the floor was opened up to various members of the Boston City Council: Many indicated support of the group’s initiatives.
By the time I caught up with Eckstein later that month, and at the beginning of this school year, the general state of education about racial issues had changed dramatically from June, when I had first started this investigation. Penn for PILOTs had caught national media attention, and Boston City Councilors had started to look at real reform.
“It was ironic because a lot of these institutions put out statements saying ‘we respect Black lives, we realize that we have a role to play in dismantling institutional racism,’” Eckstein told me. “So we were like, ‘Oh yeah, we could actually help play a role in trying to move back to the conversation.’”
When I spoke to her then, Eckstein told me that the campaign was waiting eagerly for the fiscal year 2020 PILOT reports to come in from the city: “Last year, they posted it on August 28th, so I check it about every two days.” In the meantime, though, she expected the group’s message to start translating into action. She ended our conversation with a sense of optimism: “This is going to be the year that we do something.”
Indeed, in the time since, civic leaders at both the city and the state level have been quick to take action. In February this year, Boston city councilors proposed changes to the PILOT program, including mandating valuation of nonprofits’ land based on 2021 assessments. The program currently relies on valuations from 2012, when the program was first implemented.
“It’s really hard for me to justify that people are pissed off that their taxes went up and Harvard isn’t even committing to paying 2021 prices,” said councilor Lydia Edwards, who helped advance the measure.
The five councilors tackling PILOT changes also called for reform to the program’s community benefits component, such that it would serve the same “core needs” that the city itself would focus on. Namely, the councilors expressed a desire for the community benefits to collectively address Boston’s racial and economic inequalities.
“The Covid-19 pandemic has laid bare and exacerbated deep inequities in our city — including the racial wealth gap we see,” said Janey, who was among the councilors, in a news release. “As we focus on an equitable economic recovery, I look forward to working with our non-profit and community partners to strengthen oversight and accountability in the City’s PILOT program.”
Meanwhile, state legislators on Beacon Hill have introduced a bill that would make mandatory the currently optional payments facilitated through PILOT programs. Under H.D. 3207 — submitted by State Representative Erika Uyterhoeven, nonprofits with total property valued at over $15 million would pay 25 percent of the property taxes that they would owe as a commercial entity.
“Unfortunately, Harvard has failed to pay their obligations, and this bill is attempting to address that problem,” Uyterhoeven said. “This is an attempt to say, ‘Look, let’s just then make it law, rather than having these agreements between municipalities and various nonprofit institutions.’”
“We really want to encourage institutions to step up and take seriously: what does it mean to be part of our community and part of supporting our community and its residents?” she added.
There’s still a way to go to truly give the PILOT program teeth and make it effective. But the developments over the last year have been promising — it’s the start of holding institutions like Harvard accountable.
