By Sharanya Shiram
August 19, 2014
Anchor institutions can play an important role in affecting societal change. From universities, such as the University of California, Berkeley, to hospitals and school districts, anchors have the capacity to change measures of four key indicators that were defined by the Democracy Collaborative: economic development, community building, education, and health, safety and environment. In environments where residents are struggling with the adverse effects of economic downturns or home loss, local anchor institutions need to rise to the challenge and adopt certain practices to ensure the longevity of the community and its historical demographics.
When businesses leave a region because of capital mobility or economic hardships such as in the midwestern Rust Belt, they leave a job vacuum. Anchor institutions, however, are rooted. If properly equipped, anchors are able to provide a constant source of economic and regional stability by providing services such as business incubation and local hiring. This model has served well in cities such as Cleveland and Detroit, which were majorly affected by the recent economic downturn.
In Cleveland, anchor institutions such as Case Western Reserve University, University Hospitals, the municipal government and Cleveland Clinic have formed an alliance through the Cleveland Foundation. Aided by the Democracy Collaborative, these institutions supported the installation of the Evergreen Cooperatives within the University Circle neighborhood in Cleveland to promote institutional local procurement for industrial laundry services.
Detroit was affected particularly negatively by the 2008 recession. In its aftermath, a partnership between Detroit Medical Center, Wayne State University and the Henry Ford Hospital has invested in purchasing from local businesses, redirecting over $16.5 million of the procurement budgets since 2010. In addition, the Henry Ford Hospital utilizes a policy that pays local workers in advance to provide working capital for services that may not be affordable before the payment.
Universities have also seen measurable success in changing institutional policy to benefit the surrounding communities. The University of Pennsylvania, for example, instituted a “Buy West Philadelphia” program, and from 1987 to 2009, they increased local procurement spending from $2.1 million to $90 million. The University of Virginia has implemented policy that outlines a rise in small businesses and women and minority-owned businesses by five percent each year.
UC Berkeley holds a dynamic position as an anchor. Especially with the proposed extension and construction of the Richmond Bay Campus in the nearby city of Richmond, Calif., the university’s policies impact communities that are affected by the adverse consequences of gentrification in the Bay Area. As wealthier residents move into historically low-income neighborhoods and refurbish the housing to reflect “ideal” housing environments, current residents are pushed out or forced to pay ever-increasing rents to remain in their current housing situations. Gentrification and the consequent rise in local property values pose a serious threat to the area’s lower-income residents as they have to relocate to less expensive areas. They face longer commutes, job displacement, reduced access to educational opportunities and, likely, a dearth of public amenities such as local parks and street cleaning services.
Therefore, UC Berkeley should make changes to its current housing policies as a long-term model for potential affordable housing initiatives in the Richmond Bay Campus area. One option that the university could propose is a framework similar to the current Berkeley Student Cooperative, a student-run affordable housing organization that is separate from university-endorsed housing. Subsequently, UC Berkeley should support other cooperative housing developers such as community land trusts so the local residents benefit from university-funded community development. By capitalizing on the success exemplified by the BSC, UC Berkeley could endorse or institute similar organizations around its campus, as well as in the future Richmond Bay Campus area.
Additionally, the university can invest in affordable housing development with properties surrounding the Richmond Bay Campus, offering properties at lower rent for local residents. This could potentially align with policies promoting local hire percentages for the campus – another important goal for anchors. Employees at the campus would have housing options at affordable prices, located close to work.
UC Berkeley could also make strides with another measure, namely procurement. Since UC Berkeley and Lawrence Berkeley National Lab, the two collaborators for the Richmond Bay Campus, are both funded in part by federal and state grants, they have certain procurement requirements for small businesses, minority and women-owned businesses and other disadvantaged businesses.
In fiscal year 2011, LBNL spent $22 million locally within the city of Berkeley, attempting to successfully promote and incubate local businesses. Furthermore, they spent 49.7 percent of 2011’s procurement dollars on small businesses, as designated by the funding from the U.S. Department of Energy. A similar partnership could prove beneficial to the community of Richmond. If leveraged correctly, local and small businesses will look to supply materials to the new campus under these requirements, and the area will be able to continue increasing community and economic opportunities for its citizens.
In the realm of anchor institutions, UC Berkeley, partnered with LBNL, can make a lasting impact and serve as a role model for universities nationwide for implementing measures that improve the surrounding communities while furthering an institutions’ particular missions. The construction of the Richmond Bay Campus as a new anchor will certainly change the way anchor institutions are perceived by the communities they affect.
The ideas expressed on the Haas Institute blog are not necessarily those of UC Berkeley or the Division of Equity & Inclusion, where the Haas Institute website is hosted. They are not official and not of one mind. Thoughts here are those of individual authors. We are committed to academic freedom, free speech and civil liberties.