As of 2020, corporate landlords who operated more than 100 units made up 32% of rental units in Boston, and the 18 largest landlords in Boston owned 10,800 units. Responding to low vacancy rates, these landlords have raised rents at an unprecedented pace. Avalon Communities, which owns nearly 100,000 units across the country, has raised rents by almost 16% in the last year alone. Avalon is also among a group of giant real estate investors who have worked to oppose rent control efforts in cities like San Francisco. 

These large landlords are also responsible for almost 60% of evictions in Boston. In a study analyzing evictions in Eastern Housing Court between 2014-2017, the authors found that tenants in non-owner occupied, multifamily units are more likely to be evicted. The likelihood of eviction is even greater with high-value, newly constructed or renovated properties. The incentive structure driving these evictions is clear: large real estate firms (backed by investors like the mega-firm BlackRock) assign control of their individual properties to limited liability corporations, and are therefore accountable neither to a board of directors nor to public shareholders. These landlords are therefore able to hide behind their LLC names, which are the sole names to appear on official eviction records. They have become adept at using the mere threat of eviction to force out long-time tenants and jack up rates. The eviction mills that they operate are bolstered by an infrastructure built to support the often expensive and cumbersome summary process.  

Despite their efforts to escape liability, organizers, tenants, and the judiciary have developed methods to hold these landlords accountable or at the very least to unmask the agents behind the agencies. The lists of the largest and most pernicious landlords are publicly available, and organizers focus on pressuring these landlords to reform their eviction practices. However, Harvard, which owns nearly as many units as the top ten large corporate owners in Boston, has been notably absent from these lists.  

Harvard University Housing maintains 61 properties, with approximately 3,000 apartments across Boston and Cambridge. This does not account for the undergraduate or graduate dorms that house thousands of students. It holds immense power over its direct tenants and the community that neighbors it, dictating the terms of housing costs and surrounding affordability. However, Harvard leverages its status as a nonprofit to frequently escape liability and accountability for the harms it creates in the local housing market. Though exempt from paying taxes on property used for educational purposes, universities like Harvard are in reality large businesses, and play a significant economic role in American cities.

“Fair Harvard,” Unfair Housing

In 2020, Harvard leaned fully into the corporate landlord brand, evicting thousands of students in the span of twelve days. Around 11 pm on March 10th, Dean Manning sent an email to all students living in the Harvard Law School dorms, asking those who had another place to go to vacate their rooms by March 22. This email was met with waves of panic as students, still attending class, scrambled to find alternative housing. The dorms were disproportionately filled with international and low-income students, who sought HLS housing because it did not require first/last month’s rent, a broker’s fee, or a credit check. It was these vulnerable students who were suddenly facing housing insecurity, and while Harvard ultimately accommodated those who requested help, it left those who were not comfortable doing so stranded.

Photo by Ryan N. Gajarawala for the Harvard Crimson

Though students organized to stop these “evictions,” Harvard had carefully structured its agreements to avoid the liability of a for-profit landlord. Under M.G.L. c. 140, §22, any person living in a dormitory is entitled to a 7-day written notice prior to eviction as well as the legal remedies available in a summary process case. However, when the (majority first-year) students who were being pushed out returned to their agreements to examine their rights, they found the loophole that Harvard had carefully crafted.

Remembering that moment, third-year student Min Joo recalled “then people started to go back to our dorm agreements. And it turns out that they had carefully crafted the agreement to say this is technically not a rental.” The “rental” contract that hundreds of students sign each year is in fact a licensing agreement. Under a licensing agreement, a “tenant” does not receive any interest in the property and it can be revoked at any time. 

Although Harvard University Housing (HUH), which owns and manages non-dorm apartments, did not evict its students in March 2020, it too leverages its role as a non-traditional landlord to exert outsized power over its tenants. Unlike a private corporate landlord, it is able to blatantly discriminate against potential tenants, renting only to students and those with a defined relationship to them. A buried clause in the rental agreement conditions housing on the “discharge [of] all indebtedness to Harvard University:”

“Tenant understands and agrees that failure to pay the student account bill or any monies due and owing Harvard University by the scheduled due date and failure to make acceptable payment arrangements to bring Tenant’s student account current may result in Harvard University placing a financial hold on Tenant’s student account, preventing Tenant from registering for future classes, renewing their lease, requesting transcripts, or receiving the diploma.” 

As one student learned, when you live in Harvard Housing, your housing is conditioned on more than just payment of rent. When Mark’s mother experienced a medical emergency in the fall of 2021, he requested a tuition adjustment. Though he was current on his $2,500 monthly rent obligation, he received a notice in December stating that he had actually fallen four months behind. He learned that Harvard had appropriated his rental payments to pay his tuition instead, and as a result, his studio apartment was in jeopardy.

After a protracted battle with the university, Mark was able to maintain his housing, but the experience left him with a new perspective on the power that Harvard had over him as a landlord. “In any other context, you can’t just switch around the money that someone has paid for something. . . . If you don’t have money to pay first/last and broker’s fee, you are forced to pay whatever they want.” 

In Massachusetts, traditional tenants are protected by laws that theoretically favor them. Though large landlords will try to intimidate tenants with menacing letters (Notices-to-Quit) informing them that they must vacate within a set period of time, only a judge can force a tenant to give up their home. The Summary Process protections also include those of M.G.L. c. 93A. “93A,” the consumer protection law, is a stick that threatens corporate landlords with treble damages for relatively common infractions such as failure to place a deposit into an interest bearing account. Looming 93A damages are often the mechanism used to force a landlord to settle and to allow a tenant to remain in their unit. 

However, non-profit housing agencies are exempt from 93A liability. As a non-profit university, with its dual role as educator and landlord, Harvard is endowed with the power and legitimacy to prevent its tenants (primarily students) from taking them to court and holding them accountable to the law. Without accountability, Harvard is able to set rents as high as students (who often lack experience in the rental market) will tolerate. While many students can afford the high costs set by Harvard, many more seek market-rate housing, and are willing to pay a premium relative to broader market prices. As a result, rents in neighborhoods abutting the university rise until it is only a select few who can afford to live in once-affordable communities.

These stilted power dynamics are not restricted to Harvard’s relations with its student tenants. Rather, these power imbalances enable their aggressive acquisition practices in the adjoining community.

Between 1988 and 1994, Harvard secretly bought 52 acres of land in North Allston. They accomplished this by partnering with a holding company, Beal Companies (now Related Beal) which had a history of these sorts of transactions, having anonymously bought the property in Copley Square which now serves as the site of the main Boston Public Library. Notably, according to his own company’s profile, the chairman of Related Beal, Bruce A. Beal, has been an “advisor on real estate matters to the President and Fellows of Harvard University (the Corporation) for over 25 years.”

“We’re from Harvard, and we’re going to do what we want.”

When the deal came to light almost ten years later, in 1997, Harvard justified the secret transactions by lamenting the fact that they would have had to pay way above market rate had their true identity been disclosed. For decades, North Allston had been a working class community. Three-decker homes owned by blue collar workers, auto shops, and Vietnamese, Brazilian, Greek, and Italian restaurants occupied the neighborhood. The university was determined not to let this community take advantage of its hefty endowment, which at the time, hovered around $5 billion.  Over those six years, Harvard secretly spent $88 million to buy 14 parcels of land, reaping the financial benefits of the anonymous transactions.

Without consulting the City of Boston or Boston Redevelopment Authority (BRA), Harvard announced the holdings in 1997. The announcement was met with outrage from the city and local residents. In a now oft-cited quote, Mayor Menino mocked the university: “We’re from Harvard, and we’re going to do what we want.” He called it the “highest level of arrogance seen in our city in many years.” When asked about the secret deal by the New York Times, Beal said “there is nothing I know of in America where you register with the municipal court and then go out and make your acquisitions. This is still a free-enterprise country.”

Over the next decade, Harvard was on a mission to recoup its credibility in the community. Responding to a fear that Allston residents would be pushed out by the climbing housing prices, Harvard signaled its commitment to affordability. In 2001, it agreed to pay $3.5 million to the Allston Brighton Community Development Corporation and provided $10 million to Cambridge and Boston nonprofits dedicated to restoring affordable housing. Once public enemy number one, Harvard was determined to court the Allston community. For almost ten years, Harvard and Allston were the “it” couple, and prominent newspapers like the Boston Globe tracked their relationship like the hottest celebrity pairing. 

For a while, it seemed like Harvard’s efforts to invest in affordable housing were having the desired rehabilitative effect. In 2003, a Globe headline read “Town tensions thawing as Harvard earns Allston’s trust; university wins plaudits with housing support.” Another 2004 headline read “Painting the town crimson: it’s the Tom and Larry show, starring the surprisingly chummy leaders of Boston and Harvard.” Tinted with cynicism, the Globe described the now blossoming relationship:

In October, [Harvard president Larry] Summers unveiled his multi-billion-dollar plan to colonize much of North Allston with a new campus: a complex of science facilities, professional schools, and housing that could one day leave Harvard as entrenched in Boston as it is now in Cambridge. The sheer scope of the plan could have triggered an uprising from residents. But Menino greeted Summers’s announcement with a thumbs up, and neighbors were largely sanguine…The new affordable-housing complex, to be named for late city counselor Brian Honan, is just one example of the work Harvard has done over the last few years – partly by opening its checkbook, but also with other forms of help – to overcome the mistrust engendered by the secret land buys.

A 2005 letter from Harvard President Larry Summers to the Harvard community simultaneously applauded the progress that had been made, and pleaded with Harvard’s stakeholders to contribute to the sense of neighborly collaboration. He wrote, “Our desire to be good neighbors and to address regulatory considerations will require that we continue our strong and positive working relationship with the City of Boston and our Allston neighbors. And, most important, our success in planning for Allston will depend on the continuing engagement of the Harvard community in knitting our new facilities and programs seamlessly to the core vision of excellence in scholarship and education, which are at the heart of what we do.”

For a while, the days of big, bad Harvard seemed to be in the rearview mirror. However, this thawing of tensions was short-lived, and came to a halt when in 2005, Harvard began eyeing the property occupied by the Charlesview Apartments. Charlesview was an affordable housing complex consisting of 213 apartments. In 2005, it was a community of families, some of whom had been there since the complex was built in the 1970s urban renewal efforts. However, the land was located in an area that Harvard had already targeted for expansion. According to the current Charlesview Residences Executive Director, Jo-Ann Barbour, Harvard had been eyeing the property since those urban renewal days. 

“The community basically lost the war and won a battle.  The neighborhood was still taken down, unfortunately, but in its place were 213 units of affordable housing.”

A land-swap agreement was finalized in 2007, wherein Harvard pledged to help rebuild Charlesview in a neighboring area, in exchange for the complex’s land. The plan was met with mixed responses. The Globe summarized, “the relocation proposal by Harvard is seen by some as a way to get new, better-quality housing. Others [saw] it as a land grab by Harvard, which wants the property regardless of how it might affect the displaced low-income residents.” Barbour described the fear that some of the tenants experienced as vestiges of a war lost against urban renewal. In the 1970s, when the Redevelopment Authority wanted to build luxury condos on the Charles, “the community basically lost the war and won a battle.  The neighborhood was still taken down, unfortunately, but in its place were 213 units of affordable housing,” Barbour explained.

Charlesview Construction by Aaron Knox

The project was ultimately completed in 2013 and with 240 units, worked to meet Boston’s goal of expanding affordable housing in the area. The land swap was touted by Harvard as a success in their efforts to work alongside the community to develop affordable housing. Mayor Menino – once the skeptic – praised the deal in 2007, saying “it’s really great… residents of the 1971 urban renewal project are going to be moved to well-landscaped units. It’s going to be a wonderful new life for them.”

Old Tensions, New Fight

“The neighborhood’s at a tipping point and we can’t lose the good fight. We’re gonna fight it.”

-Kevin  Carragee

Despite moments of cordiality and even collaboration, the tension between Harvard and the Allston community have continued to boil as the university has revealed plans for the land. Though construction ceased in 2009 amid the recession, Harvard continued to buy properties, only to leave them vacant for nearly a decade. Finally, in 2019, the City of Boston granted Harvard permission to develop 1.9 million square feet (approximately 15 acres) for the Enterprise Research Campus. Only 250,000 square feet were designated for housing.

That same year, it partnered with the for-profit developer Tishman Speyer to realize their vision for the commercial campus that would rival that of MIT and Stanford. Although the University had pledged to involve the Allston community in the design plans, and despite repeated requests, Harvard has refused to disclose Tishman Speyer’s bid, which won it the prized project. The Harvard Allston Land Company, which “manages the development of Harvard’s Enterprise Research Campus (ERC) in Allston,” is comprised of five board members, three of whom are corporate through and through, and none of whom are Allston residents.  

Fearing a “Seaport 2.0,” with its luxury housing, corporate offices, poor public transportation, and very high mortgages, stakeholders in Allston and Brighton again have coalesced to hold Harvard accountable to the community.  Among these groups is the Coalition for a Just Allston Brighton (CJAB), which recently penned a 19-page letter to Boston Mayor Michelle Wu, seeking commitments in 11 areas, ranking high among them affordable housing. Though Harvard has lauded its commitment to 20% affordable housing (higher than the 13% Boston mandates for new developments), CJAB demands that one-third of all housing units built on Harvard-owned land be income restricted. Why? Because while Harvard is not the sole cause of Boston’s housing crisis, said Kevin Carregee, an organizer with CJAB and professor at Suffolk University, it plays a major role in it.

“Major corporations in Boston and major institutions like Harvard need to take responsibility for the housing crisis that they in part create.”

-Kevin  Carragee

According to the Allston Brighton Community Development Corporation (ABCDC), average rents for family sized units (3 bedrooms) increased by 30% between 2017 and 2019, while rents for all units increased by 32%. In order to afford a three-bedroom, a family in Allston/Brighton would need to pay 63% of the median income, approximately $52,000. An individual working full time at minimum wage would have to allocate 100% of their earnings to rent. The poverty rate in Allston-Brighton is 29%. The increase in rents contributes to an increase in homeownership cost and Allston has some of the lowest homeownership rates in Boston, at just 10%. 

While the rising costs are driven by many factors, Harvard’s expansion into Allston is a significant contributor, and will ultimately exacerbate the problem. 80% of Allston/Brighton residents are renters and as of 2019, 12.4% of private housing was occupied by students. In 2019, a student in a three-bedroom apartment paid an average of $930 per bedroom. In order for a family to afford the same unit, they would have to pay $2,800 and make $110,000 per year to maintain the HUD-recommended 30% rent-to-income ratio.

Meanwhile, investors looking to buy property calculate the amount they are willing to pay based on the projected rental amount. As rents increase, the cost to buy increases, and the cycle continues. While the majority of the current student renters are those from Boston College and Boston University, the new Harvard Enterprise Research Campus is sure to draw thousands more graduate students and young professionals who will seek nearby housing. The rental vacancy rate in Allston/Brighton is only 5% and the existing housing stock cannot accommodate the rising demand. New construction has primarily consisted of market rate studios and 1-2 bedroom apartments and condos, which though suitable to the incoming Harvard scientists, are not appropriate for families.

The correlation between decreasing affordability and increased student populations is not unique to Harvard. A recent report commissioned by The American City Coalition, showed that the number of Northeastern students living off-campus in Roxbury increased by 180% between 2015 and 2020, while rents in that neighborhood, historically affordable, have begun to rise. 

Harvard’s practice of land banking—acquiring and sitting on properties for years—also contributes to the crisis. Unlike most real estate investors, which evaluate housing on a 10-30-year time horizon, Harvard purchases and holds land for centuries. According to the ABCDC report, “unless Harvard decides to develop housing itself, or to partner with a community group to create new housing, it is extremely unlikely they could ever contribute to alleviating the housing affordability crisis in Allston/Brighton.” When development on the 170 acres of available land begins, the corporate landlords that dominate the Seaport and Kendall Square are guaranteed to swoop in. Carragee explained, “Because of Harvard’s presence, and the knowledge of this massive expansion that will happen over time, the neighborhood’s become deeply attractive area for corporate investment in real estate.”

How does Harvard Get Away with This?

“Developed for whom? Developed in whose interests? Right now it’s all about Tishman. It’s all about Harvard. It’s very little about the people of Allston/Brighton and people of Boston.”

-Kevin  Carragee

Over the past thirty years, Harvard has straddled a line between nonprofit university and corporate developer, employing countless tactics with one goal in mind: to maximize profit. Though the relationship between Harvard and the Allston/Brighton community is still tenuous, the relationship between the City of Boston and Harvard has come a long way since the secret holdings were revealed. While the investment in affordable housing and community partnership helped to thaw the tension, there is likely more to the story.

In 1997, the undeveloped land in Allston generated approximately $1.5 million in taxes, as it was held by Beal Companies, a corporate entity. However, the moment Harvard began development, the land became tax exempt, as the property of a non-profit. When the recession hit in 2008, legislative efforts sought to hold universities like Harvard accountable by pursuing a plan that would impose a 2.5% tax on any endowment profit exceeding $1 billion.

Between 1990 and 2008, the Harvard endowment grew from $4.7 billion to $37 billion, and the university paid zero taxes on this growth. As one New York Magazine journalist wrote, “Harvard is a real-estate and hedge-fund concern that happens to have a college attached…the school does not distribute its operating profits as dividends. It has no shareholders. It does not exist to make anyone rich. Yet nevertheless, it is rich, as are a several other universities in its cohort.”

The proposed tax plan would have cost the school $840 million per year. It was met with mixed reviews by the Harvard community. A contingent of students across the university recognized the impact of tax exemption of Harvard’s endowment on its expansion into Allston, explaining in the Crimson:

“Partly due to these reduced expenses, Harvard currently owns over 923,000 square feet of property in Allston that are neither developed for Harvard’s purposes nor leased to Allston businesses. Harvard would be less likely to hold these land lots for long-term construction projects if it had to pay real-estate taxes on them.” 

However, others argued that alumni would be less inclined to donate to an institution that was underwriting state or city efforts through tax payments. Famed Harvard economist, Gregory Mankiw posted in his personal blog a scathing response, calling the 2.5% tax “one of the most pernicious ideas [he] had heard of late.” He went on to propose that if the tax should pass, “instead of expanding the university into Allston, Harvard could create a second campus in another state.” Fortunately for Professor Mankiw, the tax initiative ultimately failed. 

Having skirted the legislative proposal, Harvard now makes direct payments to Cambridge and Boston in lieu of paying property tax. Two years after the initial 1997 backlash, Harvard agreed to boost its payments to Boston, offering $40 million over 20 years, a $12 million increase over its previous agreement. Though non-profit hospitals, universities, and cultural institutions have made these sorts of payments for decades, in 2012, Mayor Menino formalized these dealings through the Payment in Lieu of Tax (PILOT) program. The new program established a request amount from the city for services received. 50% of this payment could be allocated through in-kind community benefits.

This arrangement saved Harvard over $273 million (0.7% of its endowment) during that period, and reduced its liability to city by over 95%.

Between 2012-2017, Boston requested approximately $27,800,000 from Harvard. Harvard paid only $15,184,000. If taxable, the land that Harvard owns in Allston would have generated $48,083,218 for the city of Boston in 2017 alone. This arrangement saved Harvard over $273 million (0.7% of its endowment) during that period, and reduced its liability to city by over 95%.

Table of the PILOT payments made by universities in 2017. The schools highlighted in navy blue made full payments that year. Reprinted from “Boston’s Pilot Program, a Fair Deal for Boston Residents.”

The current structure of the PILOT program has been critiqued for allowing up to 50% of the PILOT request to be allocated to “in-kind community benefit.” For universities, there is no regulatory framework or accountability for these in-kind benefits. In the face of pressure from groups like CJAB, Harvard now releases press statements applauding its own generosity. In a letter published by Executive Vice President Katie Lapp this past February, Harvard proclaimed that it would donate a 0.9-acre parcel to an affordable housing developer, that it would ensure 20% of its housing units would be income-restricted, and that it would donate $10 million over five years for affordable housing creation.

While these actions were likely construed as qualifying for the in-kind community benefit credit, these commitments fall significantly short of the $6,680,000 cash request that was made in 2021 alone. 

Though Harvard does pay property taxes on its revenue generating properties, it has pursued other creative means to minimize payments. When it starts to build on the 170 acres that are ripe for development, Harvard has indicated that it will do so with ground lease agreements. Under a ground lease agreement, a tenant can develop property only during the course of its tenancy, after which the property returns to the owner. When a landlord executes a ground lease, they don’t report any gains and thus don’t pay taxes on a sale. Rent payments on a ground lease are fully deductible for federal income taxes. They also prevent generational home ownership, as families are permitted only to lease properties, and not allowed to buy them.

Where a corporate entity would be held accountable for its tax payment, Harvard’s ability to negotiate its own contribution undoubtedly creates a conflict of interest when a city like Boston, which relies on these contributions for discretionary use, seeks to hold an institution accountable for it role in community displacement or housing affordability. Now owning one-third of the land in Allston, Harvard is able to leverage its power in Boston as it paves the way for further expansion and cements its role as one of Greater Boston’s largest corporate landlords.

Over the past 30 years, Harvard has grown as a landowner and landlord. With this growth, it has contributed to rising rents and housing insecurity even for its own students. Neighboring communities, governments, and its students have struggled to hold Harvard accountable for the harms it causes as the university contorts itself to avoid legal liability. For years, Harvard has been allowed to leverage its nonprofit status to avoid tax liability, enabling it to buy up land in Allston/Brighton. Harvard has driven up rents indiscriminately, attracting a population to this neighborhood that will surely displace those who have lived there for generations. Meanwhile, it holds sufficient financial and cultural leverage that it can play an outsized role in crafting the rules it will abide by, and unilaterally determines the terms of its interactions with the city of Boston.

Neighboring communities, governments, and its students have struggled to hold Harvard accountable to the harms it causes as the university contorts itself to avoid legal liability.

Corporate law is designed to protect shareholders above anyone else. The tax and transfer system is meant to ensure that more than just those shareholders benefit from corporate profit structures. Housing law aims to equalize power between landlords and tenants.  Harvard, one of the wealthiest and most powerful institutions in the country, sits at the intersection of all three areas of law, and yet is immune to each of them.

From The [F]law:

• Liz Turner, Land Is a Bank Account: A Journey into the Polluted Heart(land) of American Agriculture
• Maggie Hagen, Take Their Children, Then Their Land
• Jeremiah Scanlan, Secrets of the Heartland: The Battle To See Inside Iowa’s Factory Farms
• Lisa Fanning, The Corporate Roots of Conservative Legal Thought

From The Systemic Justice Journal:

• Carly Margolis, Landlords as Cops: Criminal Act Evictions and the Illusion of Order
• Jeongha Lee, The For-Profit Education Industry: How American Higher Education Created a Generation in Debt
• Maggie Hagen, Corporate Capture of Nonprofits: Corporate Law and the Preference for Profits