The Problem
Private universities benefit from charitable status under the New York State constitution, yet have morphed into some of the largest land-owners in New York City; in fact, Columbia is the #1 private landowner in NYC. Through this landholding, these institutions grow their profits and far exceed their roles as educational institutions. As our city slashes essential services and CUNY faces perpetual underfunding, we can’t continue to give private university landlords a free pass on their responsibilities to our city.
Cumulatively, private universities in the city receive exemptions costing $659 million, with Columbia and NYU accounting for almost half of this at $321 million. The tax break given to Columbia alone is 50% larger than those at Yankee Stadium, and greater than the combined tax deals for Citi Field and Madison Square Garden.
These exemptions are so massive because Columbia and NYU have rapidly acquired property over the past decade – a direct result of their property tax-exempt status. With this status, these institutions are able to extract more value out of property than others, giving them an advantage in the real estate market. Overall, the value of both NYU and Columbia’s total property holdings has more than tripled since the 1990s; Columbia owns 274 properties, with NYU owning 148. By contrast, Fordham, ranked third for private university tax exemptions in the city, owns a mere 13 properties.
When the property tax exemptions for universities were first written, it was unimaginable that a private university would become the largest private landowner in New York City. While CUNY––which educates almost three times as many students––has suffered from years of austerity budgets, NYU has opened its $1.2 billion building at 181 Mercer Street. Meanwhile, Columbia has finished its business school’s $500 million relocation to Manhattanville – a fraction of its $6 billion planned expansion into Upper Manhattan. According to the Citizens Budget Commission, the number of tax-exempt properties owned by private universities jumped 8% between 2014 and 2023. The amount of total foregone tax revenue nearly doubled in the same time.
In short, the spirit of New York State law is being violated. Columbia and NYU now serve to acquire property, not just to educate their students.
This has far-reaching consequences: each purchase pilfers the state’s tax base of critical revenue. By evading property taxes, Columbia and NYU shrink the collective revenue pot that funds municipal services – services they also rely on, including Sanitation, the Fire Department, public schools and more.
While Columbia & NYU grow their property rolls and rob public coffers, CUNY schools are crumbling and perpetually underfunded. CUNY educates New Yorkers from racially and economically diverse backgrounds – more than 80% of freshmen attended NYC public schools, 80% of undergraduates are students of color and 43% are first generation students, and 50% of undergraduates are from families that earn less than $30,000 per year – and “propels almost six times as many low-income students into the middle class and beyond as all the Ivy League colleges combined.” Nonetheless, 300 unfilled faculty and staff positions have been eliminated, and only 8% of CUNY buildings are in good repair.
The Solution
The State must recognize that Columbia and NYU have developed an objective beyond educational purposes – to enrich themselves by serving as large landowners – and tax them the same as other private landowners.
We have introduced legislation [S7797 & S7798/A8478 & A8479] to end the real property tax exemption for those private universities in New York whose annual property taxes exceed $100 million or more, and to direct the resulting revenues to CUNY. All students in NYC should receive quality education; it’s long-overdue we REPAIR and bring funding back to CUNY!
The exemption is constitutionally enshrined, and will require passing legislation in two consecutive legislative sessions [S7797/A8478] to amend the constitution and winning the resulting state referendum. We then must pass legislation to repeal the exemption at the $100M threshold and direct the resulting revenues to CUNY [S7798/A8479]. While this is a lengthy process, this issue is straightforward for New Yorkers who have seen these universities grow richer without paying their fair share. We’re building a movement to create a New York that works for the many, not the few – join us!