In an effort to protect neighbors of Harvard professors from paying artificially inflated property taxes, the Cambridge City Council decided last night to ask the University for defailed information about its long-term low interest mortgage loan program.
Harvard began the program, known as the Cambridge Option Plan, in 1978 to attract professors and other teaching personnel to Cambridge despite prevailing high housing costs.
The plan offers leans to Harvard personnel at an annual interest rate of six per cent for a period of up to 40 years on amounts ranging up to $100,000.
City Councilor David Wylie, who introduced last night's measure, contends that the option plan may inflate property values because "the better financing you have, the more you can afford to pay."
Neighbors whose property is assessed in comparison to that of Harvard professors on the loan program would be forced to pay artificially raised taxes, Wylie said, adding that the six per cent annual interest rate "is vastly better than you would pay at any bank."
Louis Armistead, Harvard's assistant vice president for community relations, agreed last night that the loan program is "an advantage" for Harvard professors. But Armistead said the option plan "does not inflate the price which people pay for a house."
"It has a very minimal effect," Armistead said, adding that because buyers involved in the loan program are still operating in a competitive market, "they won't try to bid it up."
Harvard will probably be able to furnish the city assessors with the list the council requested, Armistead said, he noted that the information is already part of the public record.
Wylie said his request was designed to protect the neighbors of Harvard personnel, "but will probably end up to some extent helping the buyers themselves," by insuring that they do not pay inflated property taxes.