When New York’s Biggest Private Landlords Are Columbia and NYU

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Columbia University is the largest private landowner in New York City. The school’s 320 properties are valued at almost $4 billion, and it pays very little in property taxes thanks to an exemption written into the state constitution 200 years ago. As the New York Times reported this week, this is a fairly costly arrangement. Columbia, along with New York University, another top landlord, saved $327 million on property taxes this year alone.

A new bill introduced this week would amend these exemptions through a statewide ballot and funnel those property taxes to the almost perennially strapped City University of New York system, which Eric Adams has also eyed for more cuts. Assemblyman Zohran K. Mamdani, one of the bill’s sponsors, told the Times that he sees these schools acting as “landlords and developers” and wants to tax them accordingly. (The bill would only affect Columbia and NYU, since the tax-exemption threshold would be set at $100 million.) But how did we even get here in the first place? To better understand the context behind the bill, we spoke to Samuel Stein, housing analyst at Community Service Society and author of Capital City, about the rise of the university landlord.

This interview has been edited and condensed for clarity.

So who are the biggest private landowners in the city? 
It’s the private universities. The Catholic Church is another one; so is Trinity Church. The four together are interesting — these nonprofit, nontraditional capitalist enterprises that own a huge amount of land and have for a long time. NYU is in some ways the outlier because it’s not nearly as old as the other three institutions. And the square footage for these universities … have you seen this?

Yes! The Real Deal estimated around 14 million square feet for both last year. 
It’s nuts. It’s also orders of magnitude over every other university in New York City. Some of this is following a trend of megauniversities in cities, like University of Chicago or Yale University in New Haven that have taken over tremendous amounts of space. They end up becoming major landlords to both their students and faculty and to others either as a revenue-building stream or as a way of holding property until they can take it over.

That kind of ownership changes a lot. 
They become a major police presence also. I was just reading this interview with Davarian Baldwin, who wrote In the Shadow in the Ivory Tower, and he says that the University of Chicago is one of the largest private police forces in the world. So there’s the policing, there’s the housing, there’s jobs.

So kind of everything. 
They become the major employer in a lot of places and then they’re not paying taxes. So we’re talking about hundreds of millions of dollars in uncollected taxes, which is a problem for New York and an existential problem for a place like New Haven.

How do universities-as-developers operate? 
They have real-estate divisions. There are professional staff who work for these organizations who probably come out of corporate real-estate firms and manage their portfolios. And that’s about acquiring more, about collecting rents from what they have, and that’s selling for a profit where they can. So in that sense they’re just like any other corporate real-estate player.

I’m guessing this is a pretty different mode of operating than what was happening 200 years ago when the exemption was written. 
Well, the scale of the universities was much smaller. They were generally confined to actual campuses rather than the city being the campus that they continue to expand into. And their primary business was education. That’s still where their primary reputation is, but they are now involved in all sorts of other businesses. So people are always joking that NYU is a real-estate company that also gives out diplomas, but there’s some truth to that in terms of where the money actually comes from.

Is there a specific moment when universities kind of shifted and became these massive real-estate operators? 
I don’t know if there was a moment when it escalated significantly. But I was working for SEIU 32BJ during the Columbia rezoning, and we were interested in that because we were organizing security guards at universities. Columbia had bought up most of the buildings that it intended to expand into, and so it was a landlord of probably thousands of apartments on the west side of Harlem. And these Dominican groups and political organizations would show up to protest the rezoning because they knew that if Columbia were allowed to change the zoning, it would demolish their buildings or evict them. The school got its rezoning, and it did end up tearing down a lot. I would imagine that all of this was building up for a long time kind of quietly. But once the rezoning happened, Columbia could let ’er rip.

Why has this taken so long? It seems like it’s just money on the table. 
In some ways, it should be easier for New York City to address this than a place like New Haven, where they’re something of a Yale company town. And Yale does pay what’s called PILOTs, payments in lieu of taxes, an arrangement similar to what this bill would force on Columbia and NYU. Yale has more power in New Haven than those universities have here — the state should be able to tax those institutions with less consequence. Also, I think there’s zero chance that a school called New York University moves to New Jersey.

What do you think of the bill? 
It makes sense to me personally. Wealthy non-tax-paying institutions should pay taxes on principle. There’s a lot of city needs, not just CUNY, that could benefit from this, though I understand tying it to CUNY. One thing that I thought about was that I don’t want the fiscal health of my public university tied to the fiscal health of my private universities, so these should be supplemental payments on top of what’s already there. I wouldn’t want to see the public budget for CUNY cut because now suddenly there’s this windfall payment from Columbia and NYU.

Do you think it stands a chance of getting through? 
I think the schools could muster a lot of resources, both in terms of money to flood the airwaves with ads and then also connections to influential people. So not just powerful people, but people whose voices have a lot of sway. We certainly saw this in the Columbia rezoning. I remember being at a community-board hearing where David Dinkins and Hazel Dukes and other very highly respected Harlem leaders were vouching for Columbia University. I assume that they’d be able to pull off that kind of high-profile support if this went to a ballot. On the other hand, I think most people think that the largest private landowners should pay taxes. I don’t actually think it would be that hard of a sell to the public.

Although I could see people being like, “Oh, well, of course we should support universities.”
But most people don’t work for Columbia and NYU, right? And there’s a huge population of CUNY graduates who remain in New York City and who vote. Telling somebody else to pay taxes is always easier than telling yourself to pay taxes.

When New York’s Biggest Private Landlords Are Universities