December 5, 2018

'Anchor institutions' connect with their communities by investing in programs and initiatives

In the late 1990s, the University of Pennsylvania had a problem: The neighborhood surrounding the university was unsafe. Parents didn’t want to send their kids there, and professors didn’t want to teach there.

Since UPenn officials couldn’t do anything to change their location, they decided to invest in it. They spent millions revitalizing housing and commercial property along Walnut Street, the campus’ main thoroughfare, adding bookstores, hotels, coffee shops and more.

And it paid off. The area became safer, more active and more vibrant.

More than a decade later, Arizona State University School of Geographical Sciences and Urban Planning Assistant Professor Meagan Ehlenz attended UPenn for her doctorate, where the inspiring tale stuck with her.

Recently, she published a paper in the Journal of Urban Affairs titled, “The university and its neighborhood: A study of place-making and change.

Ehlenz surveyed 22 four-year universities in urban settings across the country about what kinds of investments they were making, then compared median home value and median rent in 1990 and 2010 in the surrounding neighborhoods to determine if there was a relationship.

What she found was that university revitalization initiatives are meaningfully correlated with neighborhood change.

“When a university is investing in revitalization measures, the neighborhood surrounding the university behaves differently than all the other neighborhoods in the region,” Ehlenz said. “Median home values and rents appreciate more quickly than you would expect given the trend of neighborhoods in the same region.”

The idea of so-called “anchor institutions” began to catch on in the U.S. over the past 10-15 years, mostly among universities but also with some hospitals.

“Unlike corporations,” Ehlenz said, “they’re anchored in place. They’re not going to pick up and move to the suburbs for tax reasons; they have a different mission and purpose.”

Part of the anchor institution model is to invest in a suite of different programs and initiatives meant to connect them with the community. At ASU, the building of the Downtown Phoenix campus helped to revitalize the area and spur continued growth.

But, as Ehlenz discovered in her study, the results can be quite varied, depending on such factors as the type of revitalization effort — student volunteerism versus real estate investment, for example — as well as the strength of the market in a certain city.

And there is also reason for caution. ASU Now asked Ehlenz more about her findings.

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Meagan Ehlenz

Q: How is ASU a part of this phenomenon?

A: ASU does work in this anchor institution model but we’re a little different. Take the Downtown Phoenix campus for instance. We built a whole brand new campus. That’s not happening at a lot of institutions. So we’re engaging in those revitalization efforts in part by building brand new campuses, and when we’re doing that, we’re also investing in things like Civic Space Park, which is public, but it’s still connected to the campus because we have very open boundaries. ASU is growing in a polycentric model, which means we have multiple campuses and little hubs but we’re one institution. And I’d say that reflects our region; the city of Phoenix is very much like that, too.

Q: Some of the universities you looked at had more of a positive impact on their surrounding neighborhoods than others. What accounts for those differences?

A: If you’re in a strong market, say a place like Boston, Portland (Oregon) or Chicago, where there’s a lot of upward momentum in the regional market, those university neighborhoods saw much more rapid appreciation. In places like Philadelphia, Columbus (Ohio) and Durham (North Carolina), that are in a more moderate market, there was growth but it wasn’t as big of a leap. We still saw positive growth in median home values and rents but it was a little more modest. Then there were cities like Akron (Ohio) and Cleveland, where the market is weak, where there was change, university neighborhoods did see additional appreciation but it was a lot more variable and you couldn’t count on it.

Q: Did you find anything surprising in your study?

A: Something we found that was kind of interesting was that in strong markets, it doesn’t matter what kind of revitalization initiative universities employ. Those neighborhoods automatically saw appreciation. In moderate and weak markets, though, it mattered. Among moderate and weak markets, places that saw positive gain from university investment had to have some kind of place-based investment, whether housing or commercial. If only initiatives like student volunteerism or public amenities improvements were employed, it didn’t necessarily change the tide for that neighborhood. But when universities invested in housing or commercial real estate, it was a signal to the development community that, "We’re here, we’re anchored, we can work together." So the style of investment mattered, especially in moderate and weak markets.

Q: Could there be negative consequences of the anchor institution model?

A: By and large, universities investing in neighborhoods leads to more appreciation, more gain, more positive outcomes from the built environment perspective. However, you also have to look at the people. When you look at the people, it’s a lot more complicated. There’s concern about the neighborhoods gentrifying, and we are seeing more of a turnover of who’s living in these neighborhoods. We see an increase in median income but we also see wholesale demographic shifts. Universities can do a lot to catalyze positive improvement for their neighborhoods, but they need to be cautious. City development organizations and others who represent the local community should be involved. Universities generate a lot of value in the market, and in doing so, they need to remember to protect things like affordable housing and they need to provide opportunities that allow people in university neighborhoods to tap into the growth, not be pushed out by it.

Top photo: Arist rendering of the new Thunderbird School of Global Management building, which is expected to open in January 2021, and will be located at the Downtown Phoenix campus between First and Second streets, just north of Polk Street. Artist rendering courtesy of Jones Studio