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Vacation homes calls into question NYU goals

A recent New York Times piece has exposed NYU’s second-home loans policy, or monetary aid given to top faculty and administrators for purchasing vacation properties. This new data on the luxury apartments and beach houses that NYU buys for a privileged few shows that there is a great disparity in compensation between those at the top and the rest. The revelations also shed new light on the university’s opaque decision-making process, giving more credence to NYU President John Sexton’s critics and fueling the ongoing debate over university governance.

The regular housing loan program, which is intended to attract and recruit faculty by making it easy for them to buy housing in New York City, has been in place for a long time. This program however, is not available to all faculty — rather, select faculty members are chosen based on certain criteria detailed in the Faculty Housing Policy. Non-tenured faculty, such as LSP professors, are given the least priority.

All this is clear. What is not clear is at what point a decision was made to fund the purchase of vacation homes. An article from AlterNet reports that “numerous NYU professors have country homes financed by the NYU School of Law Foundation or NYU” in places like the Hamptons, Fire Island and Connecticut. An email from Martin Dorph to the NYU community indicated that the university and the law school currently have 168 outstanding loans through both of the loan programs, totaling about $72 million or, an average of about $430,000 per loan. And some of these loans are forgivable over time.

According to the Faculty Housing Policy guidelines, priority for the regular housing loan program is given to tenured and tenure-track faculty. The policy guidelines do allow “full time, non-tenure track faculty and administrators” to receive loans “in exceptional circumstances only.”

However, nowhere in the faculty housing policy is there a mention about the possibility of loans going for the purchase of second homes or vacation homes. In rare cases, the regular housing options are available to administrators — but again, these regular options do not extend to the purchase of vacation homes. Therefore, this policy is a new realm of investment that has thus far been kept a secret from students and faculty.

Because the housing policy did not provide for such loans, it seems that at the least, these new loans are contrary to the original intention of the policy and violate its spirit “to create a
 residential urban academic campus with members of its faculty living and working in New York
 City.” Providing loans for luxurious vacation properties on Fire Island and Connecticut is not part of addressing the need to provide housing in the most expensive housing market in the city.

University spokesman John Beckman staunchly defended the loan policy, asserting that it fulfills NYU’s foremost goal of  sustaining  “the academic momentum that has transformed the university in a generation from a decent regional university into a world-class residential research university.” He explained that the loan programs enable NYU to attract world-class faculty and help expand housing options for them.

Although Beckman backed the loans in general, he did not specifically address the unusual nature of these new loans for second homes, especially ones given to administrators. Comparable colleges do not have the same practices. Ariel Kaminer, in her New York Times piece, says, “Aid for vacation properties … is all but unheard-of in higher education, several experts in university pay packages say.”

In an interview, NYU politics professor and Faculty of Arts and Science Senator Christine Harrington expressed her shock to these stunning revelations, saying that it is humiliating and embarrassing that something like this can happen at NYU. The professor acknowledged the importance of having a program that ensures good quality access for faculty housing, as long as certain rules and procedures are followed. She added,  “I don’t believe there has ever been a view that this would go for purchasing second homes.”

The revelations also call into question the university’s dedication to its academic goals. Professor Andrew Ross says, “So far the administration has not made a credible explanation of how purchasing vacation homes — how this reflects the core educational mission.”

Indeed, NYU is a nonprofit institution and there are rules that govern nonprofits, and the primary rule is that the institution’s funds are supposed to be expended on the core mission of the institution. Of course, the only organization in the country that can call into question the nonprofit legal status of the university is the IRS, which makes determinations about such a status.

Edward Radzivilovskiy is deputy opinion editor. Email him at [email protected]

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1 Comment

One Response to “Vacation homes calls into question NYU goals”

  1. sansantiago on July 8th, 2013 7:02 am

    NYU is being run like a REIT & mortgage company. There are serious ethical & moral problems with the continued expansion which makes education secondary to its mission.

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NYU's Independent Student Newspaper
Vacation homes calls into question NYU goals