Amid budget woes, colleges look to sell the president’s home

NEW YORK — The president of the New School in Manhattan is about to lose an extraordinary perk: a five-story West Village town house that for decades has served as the college’s head’s official residence.

The school, which projected a $52 million budget shortfall for the 2024 fiscal year, is asking $20 million for the home as it seeks to stabilize its finances. The sale comes as shaky student enrollment, inflation and other forces are threatening smaller colleges in New York City and around the country. To stay healthy, some have sought to sell off real estate assets to shore up their balance sheets.

The New School’s building, on a residential block of West 11th Street, is especially valuable. It has also become a symbol of administrative bloat and arrogance to some at the college, a historically progressive, century-old institution with about 10,000 students.

Nearly 90% of the New School’s faculty members are part-time adjunct professors, some earning as little as about $6,000 per course, union leaders said. Dwight A. McBride, who resigned as the university’s president in the summer, earned a total of $1.4 million annually, according to federal tax forms.

“We can’t even wrap our heads around what would it be like to live in a $20 million house,” said Annie Larson, a union leader who is also a knitwear designer and an adjunct professor at the Parsons School of Design, the largest of the New School’s multiple colleges. “The disparity is incredible.”

When news that the house would be put on the market was announced at a recent faculty meeting, those in the room broke out clapping, said Sanjay Reddy, chair of economics at the university. He has independently analyzed the school’s finances and welcomed the decision.

It was quite a shift from the rancor that erupted during a grueling strike by part-time faculty for better wages in 2022, which shut down classes for three weeks, and the anger that accompanied the school’s decision to lay off 122 clerical and other staff members in October 2020.

“It’s mainly symbolic,” Reddy said of the home’s sale, “but I think it’s still very, very significant because every million counts. As they say, a million here, a million there, and soon you’re talking real money.”

In New York City, major research universities with large endowments like New York University and Columbia have been growing their real estate portfolios and transforming blocks and neighborhoods. But as the number of students heading to college has dropped in the wake of the coronavirus pandemic and as the New School and other less wealthy institutions fight for students, more have been turning to real estate sales as a way to plug budget gaps and buoy endowments.

A sleek new 34-story rental apartment building recently opened on a former playing field on Long Island University’s Brooklyn campus, built through a university deal with a private developer. St. Francis College in Brooklyn sold its campus on Remsen Street in Brooklyn Heights for $160 million in 2023 and moved to new quarters in downtown Brooklyn.

And while the City University of New York still owns hundreds of buildings, it has also recently decided to sell off the homes of some of its college presidents.

Last year, CUNY sold the president’s house at the College of Staten Island for $1.3 million, and in 2022, it sold a $2.3 million condo used by the Medgar Evers College president. It is now in the process of selling similar homes at Queens College and Lehman College.

A CUNY spokesperson, Kathleen Lucadamo, said the sales “were driven by CUNY’s decision to move away from presidential housing as part of recruitment packages for presidents.”

Lacking a large endowment, the New School is heavily dependent on tuition revenue. Located in one of the most expensive neighborhoods in the country, it charges at the top end for American schools, with an estimated total annual cost of $85,000 for a full-time undergraduate student living on campus last school year, according to the National Center for Education Statistics. Nearly all students get some form of financial aid.

To keep its classrooms filled, the New School has been less selective than some of its better known neighbors, admitting 57% of those who applied for the fall of 2022, compared with 12% at NYU, statistics show. More than a third of its students in 2022 were international.

Half of the undergraduate students who entered the school in 2018 did not graduate within four years, its statistics show.

The university has also been spending heavily on debt payments, after borrowing more than $300 million to build a new flagship building on the corner of Fifth Avenue and 14th Street. The school had high hopes that it would generate significant revenue from student dorms, but that has not panned out as well as planned, Reddy said.

This article originally appeared in The New York Times.

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