Institutions of higher education are entering a new era. Once considered enclaves of intellectual pursuit, they now play a much broader role in their neighborhoods and cities. The character of communities near expanding educational institutions drives a need for collaboration between public officials and school administrators.The evolution of universities increases the impact on real estate, land and economic development in their surrounding community. They have become anchor institutions and key partners in contributing to urban economic and community development. Universities and colleges impact cities by expanding their student housing, research and facilities, directly influencing neighborhoods and banking land for future use. Through their ability to produce innovation, attract industry, and revitalize their own neighborhoods, they have a direct impact on employment, spending, and workforce development.The community works to protect its interest in social equity, quality of life in neighborhoods, sustainable development via its planning process and preservation of tax revenues. To meet their expanding missions, institutions often have to reach beyond traditional campus boundaries, and establish more collaborative town–gown relationships. This policy focus report describes the economic role of the university, sources of conflict with the community and positive practices in use by successful city-university partnerships.