Left to right, Cambridge Mayor Francis Duehay, Cambridge City Manager Robert Healy, Harvard University President Neil L. Rudenstine, and Boston Mayor Thomas Menino at the announcement of a $21 million Harvard program to promote affordable housing. Photo by Justin Ide, Harvard News Office

President Neil L. Rudenstine announced a multifaceted $21 million affordable housing initiative Wednesday (Nov. 10) that will use Harvard’s intellectual and fiscal capital to support Cambridge and Boston nonprofit agencies in their efforts to ease the affordable housing shortage.

Officials from Boston and Cambridge joined state legislators and nonprofit agency leaders in praising the program, which they said would create or preserve thousands of housing units for both low- and middle-income residents.

New Initiative Builds on Past Housing Innovations The new Harvard University affordable housing partnership builds on an established foundation of support to Boston and Cambridge. In addition to housing 99 percent of its undergraduates and close to 40 percent of its graduate students on campus, the University has worked to support other city housing priorities. Click here for details.

"What Harvard University did today is step up to the plate and give us the tools to provide affordable housing to our residents," Boston Mayor Thomas Menino said during a ceremony to announce the initiative Wednesday morning at the Kennedy School of Government’s Taubman Building. "What today’s announcement means is Harvard cares about those people too."

The initiative is designed to combat an unwelcome side effect of the region’s booming economy: a scarcity of reasonably priced housing.

Median home prices in Massachusetts are currently twice the national average and have increased more than 233 percent since 1980. Rents have skyrocketed, with the rent for a two-bedroom apartment in the area up 64 percent in the last two years.

Despite those increases, residential vacancy rates are at about 1.6 percent, a 10-year low.

"Harvard benefits from the attractiveness of Cambridge and Boston, but that will erode if people can’t find places to live," Rudenstine said. "If [price increases] continue unabated . . . we’ll see an exodus of talented minds."

The initiative, designed to assist both low- and middle-income residents, consists of three distinct programs:

• Harvard 20/20/2000: a $20 million low-interest loan program that will be managed by Cambridge and Boston nonprofit agencies.

• Housing Innovation and Policy (HIP): a $1 million fund for one-time grants.

• Harvard Housing Advisory Committee: a faculty-based research and advisory group to support nonprofits in their affordable housing efforts.

A new report examining affordable housing issues in Cambridge and Boston, Opportunities for Partnerships in Affordable Housing, is available online.

Harvard 20/20/2000 is the cornerstone of the University initiative. The program consists of a $20 million capital loan fund. The fund will provide 20-year loans to area nonprofit agencies, to be repaid at 2 percent interest. The new funding provided by Harvard will be managed by three Cambridge and Boston housing intermediaries that provide resources to nonprofit organizations.

Working through Boston Community Capital (BCC), the Cambridge Affordable Housing Trust (CAHT), and the Local Initiatives Support Corporation (LISC/Boston Chapter), Harvard will provide $10 million in loans to Cambridge nonprofit agencies and $10 million in loans to Boston nonprofit agencies.

The nonprofits, in turn, will use the money to create or preserve housing for Massachusetts residents, who are coping with the nation’s most rapidly rising housing costs.

"Make no mistake, this is a giant step forward for affordable housing in Boston and Cambridge," said Cambridge Mayor Francis Duehay. "The economic tide that swept this area has made it difficult even for middle-income people. Many of the people who built this community can no longer afford to live here."

Cambridge City Manager Robert Healy said the affordable housing initiative builds on the active interest Harvard has taken in the community in the past. The new money, he said, will allow agencies like the Cambridge Affordable Housing Trust to reach out to groups not served by current programs.

"This loan will allow the Cambridge Affordable Housing Trust to look creatively to see if we can address income levels that we haven’t addressed before," Healy said.

The second of the three programs, the Housing Innovation and Policy (HIP) program, is a $1 million fund to award one-time grants to nonprofits that have a successful track record of developing new approaches and innovative solutions to the affordable housing crisis. City Housing and Planning Associates and the Massachusetts Association of Community Development Corporations are the first two recipients.

The initiative’s third facet, the Harvard Housing Advisory Committee, backs the University's monetary commitment with an intellectual one. The committee will bring together Harvard faculty and staff from the Kennedy School of Government, Business School, Law School, the Hauser Center for Nonprofit Organizations, Hale and Dorr Legal Services Center, the Joint Center for Housing Studies, the Graduate School of Design, Harvard Planning & Real Estate, and the Office of Government, Community, and Public Affairs.

The advisory group will meet with developers, city staff, policymakers, and elected officials to learn about key issues challenging housing production locally. The group will be able to commission research and policy analyses to provide technical and organizational support to the nonprofits that do much of the day-to-day work developing affordable housing.

The Harvard affordable housing initiative was developed after an extensive review of housing needs with dozens of Cambridge and Boston housing experts. The review highlighted issues specific to Cambridge and Boston and became the basis for the Harvard 20/20/2000 framework.

"This is a challenge and a model for other universities and institutions in the community," said Eva Clarke, president of the Boston Community Loan Fund. "Today Harvard has set a new standard for community responsibility."

Harvard 20/20/2000, HIP, and the Housing Advisory Committee build on an established foundation of support to Harvard’s host communities. A number of existing Harvard-affiliated housing development and renovation projects exemplify the goals of the new housing initiative. These include: Putnam Square Apartments, the Housing Emergency Loan Program (HELP), The Riverway at Mission Park, and the recent sale of 100 Cambridge units at well below market value in response to the end of rent control in Cambridge.