The study suggests that by taking on too much risk universities added to the economic troubles of their communities rather than helping shore them up. “Allston is the worst-case scenario in terms of the social cost,’’ Joshua Humphreys, a Harvard history lecturer said
Link to the report -
Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System - which contains the following:
The sudden postponement of planned construction projects, most notably Harvard’s ambitious Allston Initiative, translates into lost jobs, broken promises, and diminished opportunities for community economic development. Based solely on potential earnings from the anticipated jobs that fail to materialize from the Allston delays, the report conservatively estimates that more than $860 million in expected economic activity will be lost over the next three years. Longer delays will deepen community economic losses.
Harvard’s Allston Initiative promised to transform the neighborhood and create unprecedented economic, recreational, and cultural opportunities. Harvard’s decision to suspend the initiative will have negative impacts on the neighborhood and throughout the region due to the loss or postponement of expected jobs, stalled economic development, and the on-going underutilization of land Harvard the university has aggressively acquired over the last two decades. The Allston delay has also created considerable uncertainty among residents and area businesses and further soured already strained relations with the community.
we estimate that a one-year delay in moving forward with the initial Phase 1A projects would result in lost direct earnings of more than $85 million and a total economic impact for the region of approximately $275 million. A two-year delay would result in lost short-term earnings estimated at more than $170 million, and a total economic impact of approximately $550 million. With a three-year delay, the figures increase to more than $270 million in lost earnings and a total regional economic impact of more than $860 million over the first three years. These impacts are driven solely by the forgone earnings of construction workers and permanent employees; they do not include the impacts of the lost procurement spending for construction materials and equipment that would have occurred in the region. Our estimates are therefore conservative in nature.
Harvard’s neighbors in Allston will pay the highest price for Harvard’s thwarted ambitions, in lost community development, shuttered businesses, and a desolate landscape of under-utilized property.