The Politics of Housing

Why Harvard is in the Real Estate Business

Harvard is in the education business. With a faculty full of eminent scholars and a student body full of talent, the University is famous throughout the world for its work in the education business.

Harvard is also in the real estate business. With more rental units to its name than any other property owner in the city, the University and its management company, Harvard Real Estate (HRE), are famous throughout Cambridge for their work in the real estate business.

Turk says the tenants found it impossible to speak with responsible HRE officials about the matter.

Unfortunately for Harvard, that's not the only reason HRE has gained such notoriety among Cantabrigians--it's also noted for the many highly-publicized disagreements between the company and its tenants.

The most recent skirmishes between HRE and Harvard tenant groups have centered around capital improvements the University is making in its Cambridge rental properties. HRE has passed the cost of these improvements--plus a "fair rate of return" on the investment--along to its tenants.

The tenant groups contend that these expensive improvements are only necessary because Harvard allowed its rental properties to deteriorate during the 1960s and early '70s. Because of this, these capital expenditures are known as "deferred maintenance."

The tenant groups have argued that HRE should shoulder the cost of the work without passing it on to tenants because, in their view, it is Harvard's past negligence that has made the capital expenditures necessary.

David M. Rosen, HRE's spokesman, allows that in some cases the University "could or should have done more to preserve buildings," but adds that, for the most part, the properties have simply deteriorated because of their age. Many of Harvard's properties are as many as 100 years old. Rosen says.

In most American cities, all the tenants could really do about the rent increases is get upset. If they got upset enough, they could move away.

But since 1969, the Cambridge city government has regulated the rents landlords can charge. The rents in all apartments that fall under rent control are frozen at either their 1967 or 1970 levels.

Because the city's rent control ordinance gives tenants a chance to present their case to the board before it decides on a rent increase, a dispute between a landford and his tenants can become a public controversy.

HRE has often come before the board to ask for rent increases--many times on the grounds that they are needed to pay for capital improvements. The Harvard Tenants Union and its spokesman, Michael Turk, have been continuing adversaries to HRE in those has also stopped renting out apartments in the building, and the apartment complex now lies vacant.

In the year ahead, the moves could break that stalemate.

In August, the Cambridge City Council

In the meantime, the Rent Control Board's staff, opponents of the rehabilitation and HRE fire planning to hold private negotiation to try to resolve the improve.