With debate between Georgetown and its neighbors over the 2010 campus plan still heated, experts in urban planning and development are attempting to measure the effect that forcing the University to build elsewhere or cap enrollment would have on the District’s economy.
The total effect is difficult to quantify, experts say, but Georgetown’s presence in D.C. makes a positive contribution to the local economy several ways: employing people who live in the area, drawing students and faculty to purchase real estate in the area, through University members making purchases and spending money in the surrounding community, and by contributing to the knowledge economy of the area by producing highly educated graduates.
Joshua Drucker, a professor in the Department of Urban Planning and Policy at the University of Illinois at Chicago, said he uses a kind of “econometric estimation” software in his calculations.
“First you input how many students there are, how many employees there are where students live, if students live on campus and if they spend more on campus than off campus,” he said.
Other areas of economic impact are more difficult to quantify. The impact of the University on the knowledge economy can differ if the school is producing graduates in the social sciences versus the hard sciences, Drucker said.
Furthermore, the impact Georgetown’s contribution to the knowledge economy of D.C. is unique because of the nature of the city.
“The D.C. area already is a knowledge economy and that depends more on the presence of the federal government and supporting agencies than the role of universities,” Annette Steinacker, a former Georgetown employee and current director of Urban Affairs and Public Policy Program at Loyola University Chicago, wrote in an email.
Harvey Goldstein, a professor and the Dean of the Public Governance at the University of North Carolina at Chapel Hill, agreed with Steinacker.
“Georgetown University’s contribution in terms of graduates and research activities is small compared to the size of city’s knowledge economy, but is still positive,” Goldstein wrote in an email. “There are probably certain niche skills that the university contributes to — for example in particular biomedical areas of research and technology — which is not redundant with other institutions that contribute to the city’s knowledge economy.”
Drucker said that some small towns, like Chapel Hill, wouldn’t exist without their universities. He also said UNC has a cooperative relationship with the town around it: the University doesn’t pay local taxes, but it gives the city money and advice.
“I don’t think it’s atypical,” Drucker said. “I think universities tend to work with local towns. Certainly university towns work on university planning [with the school].”
Still, Georgetown’s location within an urban center lessens the dependency of the surrounding community on the University.
“The large number of tourists who visit Georgetown and the number of well-to-do residents who choose to live in Georgetown but may not have anything to do with the university are large contributors to the economy,” wrote Goldstein.
However, Georgetown’s on-campus dining program can also contribute to the local economy by hiring local workers.
“I found some evidence that there is spillover effect from faculty and students who commute to the campus and then make purchases from surrounding businesses, usually restaurants,” Steinacker wrote. “Universities also attract faculty and students to live in the area, when they would not otherwise, which can increase expenditures on certain goods, leading to support of some types of businesses.”
Finally, there is the issue of property taxes—universities do not pay them, but many, such as Harvard and Yale, have “Payment in Lieu of Taxes” arrangements with their cities. Georgetown does not pay PILOT.
“Without these, there is an argument made by opponents that the institution costs the city more than any benefits it brings in,” Steinacker wrote. “D.C. is, of course, interesting in that so much of its property base is exempt because of the federal land use. In comparison, Georgetown’s contribution would be relatively small.”
However, Drucker said Georgetown’s issues have more to do with politics than with monetary issues like PILOT.
“The fact of life is that politicians need money, they tend to cater to people with money,” said Drucker. “There is lots of revenue from nice areas like Georgetown and [they] don’t want to risk upsetting residents [who] can move out to suburbs. People in the inner city near Penn are not going anywhere.”
Reporting by Fatima Taskomur and Eileen McFarland.
