University Loan Program Opposed By City Officials

The "Cambridge Option" plan allowing tenured faculty to purchase housing near the University at low-interest, long-term mortgage terms may adversely affect the Cambridge real estate market, city officials said yesterday.

City Councillor Mary Ellen Preusser said yesterday the plan will lead to higher housing costs throughout the city. "We've had an inflated market and have had so for 30 years and this will have a devastating effect," she said.

The plan, approved by the Harvard Corporation on November 15, offers 40-year loans at a six per cent interest rate. The plan includes a $2 million fund to be allocated on a percentage basis to tenured faculty in each school of the University.

A minimum of twenty $100,000 loans will be offered to the faculty this year, Thomas O'Brien, financial vice-president, said yesterday.

O'Brien said the program would not significantly effect the Cambridge housing situation. "With 30,000 dwelling units in the city, I don't think 20 loans will dent the market," he said.

More Cash

The loans may harm local residents by "creating a large pool of available money," David Vickery, the director of the Cambridge Community Development, said yesterday.

O'Brien said that even if the University were to extend loans to 400 faculty members, "which it won't do," the effect would still be minimal.

The plan also gives the University the "right of first refusal," allowing Harvard a one-month option of purchasing property owned by a faculty member under the plan.

"This recapture clause is unfair because Harvard will buy more land," City Councillor Saundra Graham said yesterday, "and who knows what they'll recapture it for."

O'Brien said the University has no intention of exercising the option. The only purpose of the clause is to allow faculty the chance to find out first about available housing, O'Brien added.

Don't Cross the Line

Graham said she also feared the University might use the clause to expand beyond the boundaries previously agreed to by University officials. O'Brien said, however, Harvard would not cross the line even if it exercised the purchasing option.

Violating the Spirit

The University could have avoided any impact on the city's housing market, Preusser said, by expanding the loan program to cover a ten community radius.

O'Brien said, however, that an expanded version of the loan program would "defeat one purpose of the plan, which is to keep faculty members close to the students."