What do universities owe communities? An interview with Davarian Baldwin

Earlier this year, a coalition of organizations launched Durham Rising, a campaign calling on Duke University to invest in its host city of Durham, North Carolina, and raise wages of Duke employees to $25 an hour. Like all universities, Duke — the largest landowner in Durham County — is largely exempt from property taxes. Durham Rising is urging the school to make Payment in Lieu of Taxes (PILOT), as universities like Brown, Harvard, and Yale have done, to support schools, affordable housing, and other community needs.

Prof. Davarian L. Baldwin, a historian and urbanist at Trinity College, Connecticut, examines how universities reshape city economies, often exacerbating gentrification and inequality, in his 2021 book In the Shadow of the Ivory Tower. He has also advised cities pursuing PILOT initiatives, including two visits to Durham in the last year. Chris Kromm, publisher of Facing South, spoke with Baldwin this month about the role of universities and how to improve their relationships with communities. The interview has been lightly edited for clarity.

You describe an increasingly “parasitic” relationship between universities and their host communities. How has the relationship evolved, especially with elite universities, and what are some of the key aspects of that relationship today?

The present relationship goes back to the founding of universities in America in the colonial era, because they were built by enslaved peoples, and universities were built on stolen indigenous land. But when we think about the present, the real inflection point comes around the Cold War. The university took on a much greater role in the political economy, providing the research and development for military weaponry for the war, but also they’re expanding their footprint in the surrounding communities.

Universities became a friendly face of urban renewal in that time period because they wanted to protect the land values of their increased footprint … So the university became a much more central locus in facilitating, controlling power, resources, and labor. And at the center of that labor, when you're talking about low-wage labor, we're talking about increasingly Black and Brown folk, and particularly women.

Then when we get to the 1990s, we have a shift in the political economy. Universities are becoming the central piece in the rise of what we call the knowledge economy, which people in the [North Carolina] Triangle know very well. Big industry is leaving the Global North, going to the Global South, and knowledge, services, information, culture, are becoming the primary levers of the economy, with the university sitting at the center. And so they're not just doing research development; they're creating a lifestyle on or around their campuses.

And so if a university had previously built walls, they're now trying to figure out how to branch out …. The neighborhoods that have previously been seen as dangerous, they had to figure out how to turn them into being attractive, and so they began to get involved in building university lifestyle, not just for faculty and students, but for the broader workforce and the broader real estate industry.

[With the university’s] central role in the political economy, it has a certain status that allows it to not just profit, but to exploit the surrounding community. For example, for quite some time their land has been property-tax exempt … It's taken out of the tax rolls. Where would that property tax go? To things like public schools, public infrastructure.

So the wealth and prosperity that we celebrate on these campuses wasn't just from the genius created on campuses. It was being taken from the wealth that was normally supposed to go to the host community.

We tend to think of universities in terms of their lofty academic pursuits, and that's definitely how universities project themselves. You encourage us to think of them as centers of economic power, which is fitting in places like Durham, where Duke is the largest employer and landowner. In your view, how does that shift in perspective help us see the role of the university more clearly?

In their public briefs, universities celebrate what they call economic impact: the jobs that they create, the wealth that they bring to the community where they sit, how the city would be different without them. But what are your labor practices? Do you support unionization? Do you provide living wages? What are your practices around the real estate that you own? Do you offer affordable housing or low-wage housing or workforce housing on these properties that you own?

There's this health care that you control in the whole region, and you receive an additional tax exemption for that academic medical center, in exchange for providing indigent care to the communities. Do you actually do that?

If you want to celebrate your economic impact, that economic impact comes with responsibilities. The economic impact that you generate is coming from certain laws, tax exemptions, the status of labor that is unique to the educational enterprise.

Another aspect you talk about is the "company town" and how the community is encouraged to see the university as a benevolent supporter — as in, “Look at all we do for you.” What's your response?

Yeah, you do a lot for us, but we're paying for it, right? So your prosperity comes from the suppressed wages that graduate students and low-wage workers have on your campuses. You partner with pharmaceutical companies and biomedical firms that [benefit] because the [facilities] are property-tax exempt. The discoveries that you produce on your campuses that produce millions of dollars for the national economy comes because some 90% of the research and development that takes place on a campus comes from federal grants.

Yeah, so you are profoundly prosperous. But in the same way that you could say what would Durham be without Duke, the question could also be said, what would Duke be without Durham?

We see in places like Durham the amazing lifestyle, retail, and nightlife that are going on, yet all the people that make it go can no longer afford to live there. They're being pushed out into the county, into the broader region. It wants its workers at an arm's length. It wants these Black and Brown folks to work for them. But it doesn't want them to live nearby.

There isn’t affordable housing, there aren’t living wages. But it’s our suppressed wages, our poor schools, it’s our labor and our sacrifices that make this lifestyle possible.

In addition to researching these issues, you also talk about solutions like PILOT, Payment in Lieu of Taxes. You’ve been involved in PILOT campaigns across the country. What, from your experience, are some ingredients of successful PILOT campaigns?

I’ve been working on PILOT campaigns everywhere, from Ithaca, New York to New Haven, Connecticut, to Baltimore, Winston-Salem, St. Louis, Chicago, Berkeley and Miami. This is a national story: People realizing that their metropolitan budgets are struggling, yet universities aren’t paying taxes — and haven’t been for decades.

One lever to try and rectify this is payment in lieu of taxes. Every state in the union has designated universities and their medical centers as nonprofits, which means they are property-tax exempt. They’re not completely tax exempt, but they are property-tax exempt.

New Haven is the biggest example. They already paid the largest PILOT ... in the country, $14 million dollars a year. But that is compared to their $40 billion endowment. PILOT is amazing because it allows municipalities to provide some kind of compensation and rectify that.

In Philadelphia, residents and activists found that the public schools still had asbestos in the walls, so they put together a campaign called Penn for PILOT. The goal is to directly address taking the asbestos out of the walls. So [the University of Pennsylvania] pledged $10 million a year for 10 years to directly address that issue. They made a direct link between the fact that they can’t do [asbestos removal] because the biggest employer and land holder doesn’t pay taxes that go to public schools.

Endowments are another issue. A place where all this money can be stored, but the university says, “We can’t touch it …”

Endowments have additional tax exemptions that require the school to spend five percent of its endowment a year. But they spend more than that on the money market manager that manages the endowment.

They also say, “We can’t touch the endowment, it’s been earmarked for certain things.” But those decisions are part of their capital campaign. Who makes the capital campaign? The university. You could, as part of the capital campaign, say we need money for community benefits.

There have been escalating political attacks on universities from the Trump administration — at Duke, there have been lawsuits and cuts to research funding. Duke is in the midst of cutting around $350 million from its budget. What do you say to the claim that now isn’t the time to press for PILOT or other campaigns for accountability?

The reason why these universities are under attack is because of their poor relationships with the community. Most of the voters and residents don’t know the schools based on the classes that are taught or the research that’s produced. They know these schools based on having to move from their communities because the university came in. They know these schools because of the suppressed wages their aunties and uncles get paid by Duke cafeterias.

That’s what made them vulnerable to attack. If they had been leaning into community benefits, when the current administration came to attack the universities, the community would have said, no, we view them as stewards of the community, as those that protect us, that do right by us. The current attack never would have landed. They created this current vulnerability by not offering community benefits. This is the exact time they should be doing it.