University officials say they are hopeful that a plan can be developed which will satisfy most of the neighbors who now say they'll accept 150 units, but no more, on the lot. Harvard is not now planning, however, any compromise on the number of units. "I think the real compromise has already been made-between 500 and 150," Gruson says.

The final decision on Shady Hill, however, rests with the Corporation. If neighbors are adamant in their refusal to accept more than 150 units, it is possible the Corporation might decide to compromise on numbers, rather than face the embarrassing prospect of having to fight against some of Harvard's more distinguished Faculty members when the Univer-

sity's request for a zoning change goes to the City of Cambridge.

There will, however, be plenty of time to try to develop a design for 300 units that is acceptable to the neighborhood, for the Shady Hill plans are facing yet another delay on a different score: that of money.

The plans are facing two types of financial difficulties-rising construction costs and difficulties in the financing plan.

According to various estimates, construction costs in the Greater Boston area are rising by up to 15 per cent a year. The preliminary designs for Shady Hill are now too expensive to construct, so University officials and architects have been reviewing the projects, trying to find ways to save money. L. Gard Wiggins, administrative vice-president of the University, describes the situation like this:

"We've been working with the architect, making all the kinds of cost savings that our people or the architect can come up with. Construction costs are so high today that unless you get some kind of an offset, such as a lower interest rate, you end up with rents that many faculty members will be unwilling to pay, even for the privilege of living in Cambridge."

To date. Wiggins says. the revisions in plans have not been enough to get anticipated rents down to the level Faculty members would like. Harvard is planning for the project to be fully tax-paying and self-supporting so, aside from the construction savings, the only possible savings are in the method of financing. And here Harvard has been disappointed to date.

The University is planning to finance the project under Massachusetts's newly-established Health and Higher Education Facilities Authority. In essence, this authority helps universities, hospitals. etc. to finance construction at the rate of interest for tax-exempt bonds, rather than at the higher market interest rate. The authority issues bonds to finance the construction, owns the project when it is completed, and rents it to the University for a nominal fee. The bonds are then retired out of the revenues of the project-rents in the case of Shady Hill.

The problem is that the authority has just been established, has not financed any projects to date, and when it does, may require higher interest rates than it would have a few years ago. Present high interest levels, a flooding of the tax-exempt bond market by new issues, and investors' uncertainty of what the current tax reform proposals will do for tax-exempt bonds have all contributed to drive up the rate on this kind of bond. "We'd like to talk about five per cent, but we're forced to talk about seven per cent. When you're trying to construct a self-sustaining dormitory at Harvard or anywhere else, over a period of years, that two per cent could make a considerable difference," comments Jack Donaghue, director of the authority.

University officials reject another method of financing-paying for the project out of the University's endowment funds. Though the GSD suggested that Harvard could loan money from its endowment at five per cent interest, Harvard officials point out that endowment funds currently gain about 7 per cent a year and argue that it is vital to keep this return high in an era when all divisions of the University are increasing their demands for funds. "If you take unrestricted money which is now earning interest and use it to meet operating expenses, you just increase the size of the deficit; it's a vicious circle." Wiggins says.

So, for the present, Harvard is concentrating on cutting construction costs, hoping that the state authority will soon be underway and able to finance construction at an interest rate which will permit rents to be set low enough for most junior faculty members.

The question of how high the rents will be is particularly importane, because it will largely determine what kinds of University personnel live in the Shady Hill project. That in turn has major implications for the impact of the project on the neighborhood.

Take the schools for an example. Estimates have been made that anywhere from only a few to over 300 new children will come from the 300 Shady Hill units into the Agassiz School which serves the district and now holds some 240 pupils. Just how many actually come depends on whether older or younger Faculty members live in the project, whether the Agassiz School retains its position as one of the leading grammar schools in the city, and whether, as one Agassiz parent puts it, "the parents don't accept the myths about the Cambridge schools and instead take a look for themselves."

The Agassiz School is old (build in 1915) and is scheduled to be replaced by a new school in 1971. Though some Agassiz parents hope construction of the new school can be coordinated with the development of another Harvard-owned parcel of land in the area and others have suggested a community school on Shady Hill itself, it is difficult to begin planning for the new school when no one can yet tell how many children will be attending it as a result of the Shady Hill construction.

Thus, though the Shady Hill project has been debated for over 15 years, the character of the project and its impact on the neighborhood remain to be seen. Much still has to be settled during the coming months of negotiation and cost-cutting.

Given the difficulties of financing and winning neighborhood acquiescence, it will be some time-probably at least a year-before bulldozers actually begin work on Shady Hill. Whatever detailed plan is finally adopted, the University may end up losing more friends than it makes through the Shady Hill project. Too many divergent interests are involved-from those of junior faculty anxious for lower rents through neighbors wanting a park or design improvements that cost more money to low-income community residents anxious for a piece of the Shady Hill pie.

Deciding among these interests will not be easy; what pleases one is only to likely to offend another. In fact, one observer of the situation recently suggested that the only action that could win the University friends, in the short run at least, would be to open up the area as a park until final plans are developed.