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How UC Berkeley used public power to become a private developer

In March, the city of Berkeley made national headlines after a California Supreme Court ruling threatened to force UC Berkeley to drastically reduce in-person enrollment. At the center of the story was the controversial use of California’s Environmental Quality Act, known as CEQA, to blame rising listings for negatively impacting surrounding neighborhoods. In the aftermath of the ruling, it appeared to all as if a small group of disgruntled landlords had managed to find a way to use the courts to halt the growth of higher education.

The response was swift and overwhelming.

UC Berkeley Officials argued that they were being prevented from fulfilling the university’s mission to increase access to public education, especially for first-generation students and students of color. Others pointed out that this use of the CEQA gave disputed owners the power to usurp public authority. State lawmakers responded by passing a CEQA exception that exempts increased student enrollment from being considered a “project” that has a detrimental environmental impact on neighborhoods.

And that was largely it. A benevolent public university was once again free to resume its plans for the development of its surrounding community without local interference from NIMBY.

Problem solved? Barely.

While it is true that the CEQA lawsuit in question may have been brought for selfish reasons, the debate surrounding this lawsuit has consistently failed to mention the danger of entrusting UC Berkeley with carte blanche development privileges.

Consistent with national trends, California funds only about 13% of UC Berkeley’s operating budget. Passage of Proposal 13 in 1978 capped property taxes, which helped initiate a series of budget cuts across the University of California system. Over the years, UC Berkeley has looked to increased enrollment and profitable land transactions to support its public mission.

But UC Berkeley played a role in the development game long before the state funded abandonment of public higher education.

After World War II, cities faced the so-called “urban crisis” of growing black and Latino populations. In 1959, an urban university lobby group helped pass the “Item 112 Credits” — a federal program that triggered additional funds for urban renewal projects on or near a college or university. This has helped make higher education the friendly face of urban renewal projects across the country. These efforts demolished black and brown neighborhoods in campus areas.

Berkeley was no exception.

In 1954, UC Berkeley used this program to acquire large areas immediately south and north of campus. This included the village of Codornices, which had been developed for mostly black residents who lived in low-cost housing built for shipyard workers during the war; 1,900 homes were demolished. The land was purchased below market value and largely intended for student housing. However, the university has consistently rented units at above-market average rents, driving students into off-campus housing and inflating land values ​​in town. To date, UC Berkeley only houses 23% of its students, and landlords have seized on this captive market by turning single-family homes into lucrative “mini-dorms” that are expensive for low- and middle-income families.

UC Berkeley used public power to become a private developer. But for what public good?

UC Berkeley’s own press materials boast “employ a private developer mindset.” Last year, Berkeley Capital Strategies, the university’s real estate arm, bought a 112 year old rent controlled building. After months of protests, the roughly 12 tenants reluctantly agreed to buyout packages that failed to cover the costs of replacement accommodation in the area. As a state institution, UC Berkeley was able to override city rent control protections and built high-end student housing on the property. Furnished one bedroom apartments will be start at $4,400 per month. Marketers have been savvy enough to plant this complex such as tackling the housing crisis by targeting suburban students forced to live away from campus and offering scholarships to students eligible for the Pell Grant. However, there are no units for low-income students.

UC Berkeley has also taken advantage of the university land tax exemption to negotiate profitable development deals for itself and its business partners. For instance, West Berkeley Way is a new building where private companies like Microsoft can benefit from low-cost research and development by graduate students, while sheltering overhead costs by sitting on property tax-exempt land. These buildings are occupied by private contractors for cleaning and catering services that allow the university and its partners to circumvent campus unions. Meanwhile, acres of campus land remain vacant or filled with profitable data centers as the university targets utility properties like People’s Park for its on-campus accommodation.

The CEQA lawsuit that captured national attention may have derived from selfish ends. But the ensuing enrollment controversy has largely ignored the embarrassing system where the state starves public education and the costs are passed on to host communities.

There is a devastating toll when our public universities become private developers.

Davarian L. Baldwin is Professor of American Studies and Founding Director of the Smart Cities Research Lab at Trinity College. His most recent book is “In the Shadow of the Ivory Tower: How Universities are Plundering Our Cities”.

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