Boston is facing a ‘wealth spiral’ thanks to President Donald Trump’s war with the beating heart of its economy – Harvard University. 

The Ivy League institutions saw a freeze on more than $2.2 billion in funding from the White House after they declined the government’s requests to revise their hiring, admissions, and educational methods to combat antisemitism on campus.

Harvard faced scrutiny last year regarding antisemitism on its campus during Israel’s conflict with Hamas. This pressure led to then-President Claudine Gay stepping down due to increasing external demands.

The repercussions of these events are now being felt in Boston and the nearby city of Cambridge, where Harvard’s campus extends.

Harvard employs more than 20,000 people and harbors connections to almost every major economic sector in the local economy, including biotechnology, real estate and hospitality. Experts have warned that these sectors are now under threat. 

Evan Horowitz, executive director for Tufts University’s Center for State Policy Analysis, dubbed it the ‘wealth spiral effect’ caused by people tied to Harvard pulling back on spending.  

‘These aren’t distributed jobs—they’re concentrated, so we could see strong local effects,’ he told the Wall Street Journal. 

Boston is facing a ‘wealth spiral’ thanks to President Donald Trump ‘s war with the beating heart of its economy – Harvard University

Donald Trump’s administration has frozen more than $2.2 billion in funding to the Ivy League after it rejected demands from the government to reform its hiring, admissions and teaching practices in order to help fight antisemitism on campus

Even Cambridge’s ritzy real estate market won’t be immune to the turmoil, experts have said. 

Lauren Holleran, a vice president at Gibson Sotheby’s International Realty in Cambridge, said that wealthy buyers are pulling out of deals, and some are holding off on listing their properties. 

‘They’re saying, let’s see how things shake out,’ she told the Wall Street Journal. 

Meanwhile, vacancy rates for life-sciences buildings in the Boston region reached 30 percent at the end of 2024 as demand for lab spaces plummets, according to brokerage firm Cushman & Wakefield.

Earlier this week, the Department of Education’s Joint Task Force to Combat Anti-Semitism announced the freeze of $2.2billion in multi-year grants and $60million in multi-year contract value to Harvard after it refused to comply with reform demands. 

The department said that the school is not taking the problem of campus antisemitism seriously and must ‘commit to meaningful change if they wish to continue receiving taxpayer support.’

Current Harvard President Alan Garber, in a letter to the Harvard community Monday, said the demands violated the university’s First Amendment rights and ‘exceed the statutory limits of the government´s authority under Title VI,’ which prohibits discrimination against students based on their race, color or national origin.

‘No government – regardless of which party is in power – should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue,’ Garber wrote, adding that the university had taken extensive reforms to address antisemitism.

‘These ends will not be achieved by assertions of power, unmoored from the law, to control teaching and learning at Harvard and to dictate how we operate,’ he wrote. 

‘The work of addressing our shortcomings, fulfilling our commitments, and embodying our values is ours to define and undertake as a community.’

Donald Trump’s education department put the hammer down on Harvard, freezing over $2.2billion in funding after they rejected a list of demands from the federal government

Harvard announced via a letter to the White House Monday that it won’t comply with the requests from the Trump administration as part of its campaign against antisemitism

The school came under great scrutiny over campus antisemitism in response to Israel’s war against Hamas , forcing then-President Claudine Gay to resign amid mounting pressure from forces outside the university

A spokesperson for the White House told DailyMail.com that Harvard’s funding is now at risk. 

‘President Trump is working to Make Higher Education Great Again by ending unchecked anti-Semitism and ensuring federal taxpayer dollars do not fund Harvard’s support of dangerous racial discrimination or racially motivated violence,’ Harrison Fields said. 

‘Harvard or any institution that wishes to violate Title VI is, by law, not eligible for federal funding.’

In a letter to Harvard Friday, the administration called for broad government and leadership reforms, a requirement that Harvard institute what it calls ‘merit-based’ admissions and hiring policies as well as conduct an audit of the study body, faculty and leadership on their views about diversity.

The demands, which are an update from an earlier letter, also call for a ban on face masks – which appeared to target pro-Palestinian protesters. 

They also pressure the university to stop recognizing or funding ‘any student group or club that endorses or promotes criminal activity, illegal violence, or illegal harassment.’

The demands on Harvard are part of a broader push of using taxpayer dollars to pressure major academic institutions to comply with President Donald Trump´s political agenda and to influence campus policy. 

The administration has also argued that universities allowed what it considered to be antisemitism to go unchecked at campus protests last year against Israel’s war in Gaza; the schools deny it.

Harvard is one of several Ivy League schools targeted in a pressure campaign by the administration, which also has paused federal funding for the University of Pennsylvania, Brown, and Princeton to force compliance with its agenda. 

However, Harvard – which holds the largest university endowment in the world – appears to be prepared to stand its ground against the Trump administration. 

The demand letter is similar to the one that prompted changes at Columbia University under the threat of billions of dollars in cuts.

Harvard announced Monday that it won’t comply with the demands from the Trump administration as part of its campaign against antisemitism, which could put almost $9 billion in funding at risk

The Trump administration demands prompted a group of alumni to write to university leaders calling for it to ‘legally contest and refuse to comply with unlawful demands that threaten academic freedom and university self-governance.’

‘Harvard stood up today for the integrity, values, and freedoms that serve as the foundation of higher education,’ said Anurima Bhargava, one of the alumni behind the letter. ‘Harvard reminded the world that learning, innovation and transformative growth will not yield to bullying and authoritarian whims.’

It also sparked a protest over the weekend from members of the Harvard community and from residents of Cambridge and a lawsuit from the American Association of University Professors on Friday challenging the cuts.

In their lawsuit, plaintiffs argue that the Trump administration has failed to follow steps required under Title VI before it starts cutting funds, and giving notice of the cuts to both the university and Congress.

‘These sweeping yet indeterminate demands are not remedies targeting the causes of any determination of noncompliance with federal law. Instead, they overtly seek to impose on Harvard University political views and policy preferences advanced by the Trump administration and commit the University to punishing disfavored speech,’ plaintiffs wrote.

The position stands in stark contrast to their Ivy League siblings at Columbia, who caved to Trump weeks ago. 

The Trump administration pulled the grants and other federal funding, and had threatened to cut more, over the university’s handling of rampant protests against Israel.