At a school that can be nonchalant about a Nobel and relaxed about a Rhodes, University administrators are almost giddy about the "Innovation in Fair Housing Award," it received from the city of Cambridge earlier this year.

"This is a great honor...the University has been around for 350 years, and I don't think we've ever received anything like it," says Susan K. Keller, Harvard vice president of residential real estate.

In the past, Harvard has been widely criticized for its real estate and tax status in Cambridge, particularly from Cantabrigians who feel that the world's richest university does not give enough back to the community.

The award was given to the University after it agreed last summer to sell 100 units of its formerly rent controlled housing to the city at a reduced price. In exchange, the city now allows the University to house exclusively Harvard affiliates in its remaining such apartments.

The prize is a recognition of what administrators and city officials see as a major thawing of town-gown relations.

"Some of our past critics are now our biggest supporters," says James H. Rowe III '73, vice president for government community and public affairs.

Thawing the Ice

Last spring, only a few months before the city council voted to purchase Harvard's housing units, many city officials were upset by the University's decision to eliminate a series of kiosks in the Holyoke Center arcade.

At the time, City Councillor Francis H. Duehay '55 said Harvard's treatment of the arcade was typical of its dealings with the community.

"This is the latest and most serious in a series of events," Deuhay said last year.

But Harvard's recent actions have left Duehay--who feels the city got a major boon from the agreement--noticeably more sanguine.

"The city is getting something that no other landlords have agreed to," he says. "They didn't need to do this for the city and they did."

Duehay is quick to add that Harvard has much to gain from the deal, but he says that on the whole, relations between Cambridge and Harvard have changed.

And beyond Duehay, a broad cross-section of city officials and activists are pleased by the agreement reached with Harvard.

City Councillor Michael Sullivan believes that with Cambridge tax payers getting a $40,000-$50,000 savings per housing unit, the deal's advantages are clear.

"Considering we paid $30,000 per unit...I feel we did pretty well," Sullivan says.

President of Cambridge's Small Property Owner's Association (SPOA) Lenore M. Schloming '59 says that Harvard did not need to sell its housing for such reduced rates and is impressed by the University's generosity in this case.

"As a little owner...I would say why does Harvard want to give up so much?" Schloming asks.

Many, like Peter Daly, executive director of the non-profit organization which now owns the 100 units of housing sold by Harvard.

Over the past two years, the issue of low income housing has shot to the top of the city's agenda.

With diminishing federal funds flowing toward low income housing; escalating prices of market rents in the city; and the final death of rent control protections, Cambridge is now facing a shortage of roughly 2,000 units of low-income housing.

This same set of factors led Harvard to begin rethinking its strategy of residential real estate management after a state-wide referendum eliminated rent control two years ago.

While the University was seeking to downsize real estate holdings to facilitate the management process, its primary goal was to ensure that even after rent control's demise, Harvard affiliates would have access to Harvard housing at affordable prices.

Keller says that these goals ultimately led the University to reach an agreement with the city.

"Our reason for doing this was to have affiliate access in the main units...besides the fact that we think its the right thing to do," Keller says.

The Issues

The agreement reached by Harvard and the city addresses three primary issues.

First, current Harvard tenants who qualify as "protected"--a designation given to needy families, the elderly and the disabled--will be able to remain in their apartments for as long as their households remain qualified under city standards.

Units occupied by these tenants will only reach the market rate after protected tenants voluntarily leave their apartments.

Second, Harvard agreed to sell 100 apartments at below market value (approximately $30,000 per unit).

The units are to be owned and managed as permanent low-income housing by a local non-profit organization.

Third, the city will allow Harvard to devote its remaining units exclusively to Harvard affiliates, allowing the University to provide students, staff and faculty with affordable housing.

Of the original 700 units Harvard owned under rent control, 100 have now been sold to the city, approximately 40 have been sold at market rates and the remaining 560 are still owned and managed by Harvard.

Of the roughly 560 that remain under Harvard control, approximately half are protected status tenants entitled to remain in their apartments for as long as they choose, and half are Harvard affiliates.

Rowe says this agreement helps Harvard to achieve two of its goals.

"We had to balance two issues, one is our institutional commitment, the other is the commitment to the community," he says.

While most are happy with the resolution, for some the issue is not over.

"I think its great," says City Councillor Katherine Triantafillou. "I just want to see more."