Joining Forces has been researching how the anchor institutions in other communities (those that employ the most residents and contribute the most to their local economies) participate in addressing the shortage of affordable housing. In Evanston, those anchor institutions are Northwestern University and the two hospitals. Joining Forces has completed a study of Northwestern University's role in the shortage of affordable housing and in what peer universities are doing in their communities to solve the problem. We are working on a similar study around the hospitals.
Northwestern University and Affordable Housing in Evanston, Illinois
Northwestern University’s Office of Neighborhood and Community Relations offers a wide array of events and services to connect students and faculty with the Evanston area. The University’s strategic focus on education, child, and youth development; economic and community development; and health and public safety includes several impressive programs. Most notable are the Good Neighbor Fund, the Skilled Trades Training, and the recent Racial Equity and Community Partnership Grant program.
Missing from the mix, however, is a strategy to address affordable housing and a recognition of the role urban universities play in this rising crisis. This omission is especially surprising for a university with increasing enrollment. Growing the student population (and the related staff needed to support it) without building additional dorm space to house them only heightens housing stress on the surrounding community. The situation is exacerbated by student preference for living off campus. Whether by choice or necessity, student rentals impact the cost of housing across entire communities, affecting most significantly lower income families and individuals.
Further, the high cost of housing is impacting Evanston’s diversity, particularly its African American population, which has declined in recent years due to the high cost of living, especially housing. This development has been a major factor in the City’s nationally recognized reparations initiative, the Restorative Housing Program.
The Effect of Universities on Housing Costs
The effect of universities on housing in surrounding communities is the subject of a September 2019 issue of Shelterforce, “the only independent, non-academic publication covering the worlds of community development, affordable housing, and neighborhood stabilization.” The article explains the economic effect that student rentals can have on housing affordability in neighborhoods:
“For landlords, student rentals are an incredibly lucrative real estate opportunity as students pay by the room, allowing landlords to charge more per square foot as there are several roommates paying a monthly rent. As a website for real estate investors recently noted, ‘a home that might rent for $1,000 a month to a single family could be rented by the room for nearly twice that.’ In addition, students sign one-year leases so rents can be raised each year if the market allows...For real estate markets near college campuses, student housing can be transformative as investor capital competes with homeowners, making it so sale prices and rents increase.”
Further, Shelterforce notes, “a 2014 analysis by Tom Laidley of NYU of 20 college towns found that an increase in the size of a college’s off-campus population is associated with higher market rents, particularly in areas that have a relatively high concentration of undergraduate students…A 2017 regional housing study for the Bloomington-Normal Illinois region found that student housing rental rates in university towns drive up housing costs for family renters. Student housing may also attract predatory landlords who rent poorly maintained housing using questionable leasing practices to indiscriminate students.”
The issues outlined by Shelterforce are reflected in reports of the many Evanston commissions and committees that have studied the issue of affordable housing in the past decade. The most recent report by Millennia Consulting in March 2020 on the work of the Affordable Housing Steering Committee reveals firsthand stories from middle- and low-income workers and families:
A Leadership Evanston team further explored this subject in a video that can be viewed here. Leadership Evanston is a program of the Evanston Community Foundation.
Universities and Housing Programs
The percentage of students living on campus can be an indicator of the potential impact a university has on the surrounding community. U.S. News and World Report shows that 60% of Northwestern University undergraduates live on campus, an above average percentage among typical universities. While better than most, Northwestern’s housing of students cannot match Harvard University where 98% of undergraduates live on campus. Even more impressive is Harvard’s recognition and participation in tangible solutions to affordable housing in areas throughout Boston.
A literature search of universities and housing programs reveals contributions made by other colleges and universities to the affordable housing crisis. These are above and beyond contributions to city general funds and school districts.
Harvard has funded more than 7,000 projects throughout the Boston area since the year 2000, contributing more than $40 million through the Harvard Local Housing Collaborative. The funding is dispersed to local intermediary affordable housing organizations including the Cambridge Affordable Housing Trust, BlueHub Capital and LISC Boston.
In 2005, Smith entered into a 30-year development agreement with Northampton to help fund affordable housing through the college’s Affordable Housing Fund and contributed $800,000 to the Valley Community Development Corporation.
Since 2014 Princeton has made $22 million in unrestricted cash contributions to the municipality, as well as $6 million in voluntary tax payments for properties eligible for property tax exemption, additional funds above and beyond tax payments donated to the school district annually, annual financial contributions to fire department, local nonprofits and more. Funding has supported affordable housing construction by Princeton Community Housing and Habitat for Humanity. The university also donated land to the Princeton Housing Authority for development of affordable units.
University of California at Berkeley
Berkeley has proposed using the area known as People’s Park to build approximately 1,000 below-market rate apartments for undergraduates. It will also provide a land lease to the city of Berkeley for construction of supportive housing for homeless and low-income people. Services will be provided by the appropriate social service agencies in the city. The university has the lowest percentage of available student beds in the UC system.
Stanford has committed $3.4 billion over roughly two decades to develop 2,172 workforce housing units on university land, without encroaching further into town. This development includes 575 front-loaded units of below-market-rate housing. This housing will address needs of students, faculty, staff, and postdoctoral scholars, and is anticipated to free up a significant number of housing units in the community.
University of Virginia
UVA announced in 2020 it would support the development of 1,000 – 1,500 affordable housing units over the next decade on land owned by the University and the UVA Foundation. The president noted, “As an anchor institution, we feel a responsibility to be a good neighbor. One of the most pressing needs in our region is affordable housing, and we are looking forward to doing our part to help increase the supply.”
Becoming Part of the Solution
What can Northwestern University do to help alleviate the affordable housing landscape in Evanston? The following options represent a few ideas of many that can be considered.
Increase On-Campus Housing
By increasing the percentage of students housed on campus to 80%, Northwestern can reduce pressure on the housing inventory in the surrounding area.
Contribute to the City of Evanston’s Affordable Housing Fund
This fund supports the City’s affordable housing efforts and can be used as gap funding for development of affordable housing, rental assistance programs, affordable housing preservation, and many other uses related to affordable housing.
Contribute to the Local Reparations Fund
This fund supports the Restorative Housing Program to assist housing purchases or repairs to those impacted by documented discriminatory housing policies and practices in Evanston from 1919-1969.
Contribute to a Rental Assistance Fund
Connections for the Homeless, a local nonprofit organization, offers financial assistance to renters experiencing financial hardships who are behind on their rent or at risk of eviction. A contribution to this fund will help prevent eviction and homelessness.
Partner with Evanston Nonprofit Developers
Evanston is home to nonprofit developers experienced in affordable housing. Reba Place Development Corporation, Community Partners for Affordable Housing, Impact Behavioral Health, and Housing Opportunity Development Corporation have been working on the challenge of housing and helping people in need for decades.
Establish a Flexible Housing Fund with Other Evanston Anchor Institutions
In addition to universities, hospitals and health centers are increasingly recognizing their role in addressing the social determinants of health, including access to housing. A partnership among Evanston’s anchor institutions (City of Evanston, Northshore University Healthcare System, and AMITA Health Evanston) could establish a flexible housing fund to assist a variety of housing situations, including eviction prevention and homelessness. Such a fund could be a powerful force in improving the lives of Evanston residents reeling from the high cost of housing.
Affordable housing is one of the most complex challenges facing urban areas across the country. As anchor institutions with direct impact on housing in surrounding communities, universities carry some responsibility in addressing the situation. Several of the nation’s leading universities are recognizing this role and are engaging in finding solutions in concert with city governments, community institutions, and nonprofit organizations. Northwestern University has an opportunity to join this growing list of the nation’s most highly regarded educational institutions and assist its home community in addressing the affordable housing crisis.