Employer-Assisted Housing...Target to preserve affordable housing in the five community areas...

Employer-Assisted Housing: A Proven Strategy for “Housing a Competitive Workforce”

American Planning AssociationOctober 14, 2008

a nonprofit, nonpartisan group of business and civic leaders committed to serving the public interest through development, promotion and implementation of sound planning and policies so all residents have access to opportunity and a good quality of life, the building blocks of a globally competitive greater Chicago region

Founded in 1934

60 member, business-based board

24 professional staff

Partnership with hundreds of public officials, business leaders, community-based organizations and other stakeholders

Who is the Metropolitan Planning Council?

Metropolitan Planning Council

Housing and Growth Facts (informing workforce housing

strategy in Illinois)

:

-4-2

0

24

6

810

12

1416

Percent

Population Employment(1991-2000)

Housing Units Rental Units

Greatest deficit of housing for households earning below $20,000 per year

2000 Wake-Up Call: Rental Housing is NOT Safe Back-up Plan


Supply of housing that is affordable not located in high job growth areas

Negative public perceptions of “affordable housing”

1300 different municipalities, statewide, each responsible for housing policy “in their own backyard”

Lack of community support, state leadership

“Non-economic” barriers identified in 2000


Why is housing an employer’s issue?


Approx. Average

Home Price

Annual Wage

Needed to Buy

Approx. Average

Month Rent

Annual Wage

Needed to Rent All Jobs

Financial Manager Chemist

Child, Family,

and School Social

Worker

Chemist Married to

Financial Manager

City (County)

Northbrook (Cook) $620,911 $187,345 $1,442.83 $57,676 $33,653 $93,664 $55,529 $39,302 $149,193

Deerfield (Lake) $521,555 $157,367 $1,474.17 $58,923 $34,524 $89,769 $50,328 $29,698 $140,007

Highland Park (Lake) $766,651 $231,318 $1,164.11 $46,527 $34,524 $89,769 $50,328 $29,698 $140,007

Highwood (Lake) $598,265 $180,512 $922.37 $36,856 $34,524 $89,769 $50,328 $29,698 $140,007

Lake Forest (Lake) $1,055,187 $318,350 $1,398.06 $55,866 $34,524 $89,769 $50,328 $29,698 $140,007

Cannot afford to buy or rent

Can afford to rent, not buy

Can afford to buy or rent

The Update: Local Workforce Housing Market Realities


Affordability Gap

Many workers in our communities cannot afford to live near work because prices are too high and incomes too low.

Availability Gap

There is a shortage of homes affordable to the workers in our communities.

Just 13% of the local housing stock is affordable to workers earning less than $50,000 – workers that account for more than two-thirds (69%) of

the 5-community area workforce.

Homes Affordable to Workers by Income Level

13,020 (16%)

29,830(36%)

27,835(33%)

12,875(15%)1,449

(4%)3,621(9%)

6,690(18%)

26,358(69%)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Less than $25,000 $25,000 to $49,999 $50,000 to $74,999 $75,000 or H igher

Workers' Income Levels

# of W

orkers

or A

vaila

ble H

omes

WorkersHomes

By 2030, an additional 4,800 rentals and 10,000 for-sale opportunities will be needed for households earning < $75k.

Excessive housing costs for employees

lead to higher turnover ratesmake it difficult to recruit new talentreduce worker productivityproduce costly traffic and congestionreduce investment in and connection to communities

The Implications for Businesses


Problem

Metro Chicago jobs and population have grown faster -- and in separate locations than -- the supply of workforce housing.

Issue

Workforce problems result from this Jobs-Housing Mismatch.

Solution

Employer-Assisted Housing (EAH) –Maximizes employee retention by promoting live near work and providing outsourced, easy-to-administer HR benefit.

Jobs-Housing Mismatch


• But foreclosure rate among EAH employees is almost 0%.

• EAH is a proven foreclosure prevention strategy, thanks to homebuyer education and homebuyer assistance.

• Private sector leadership and dollars are more important than ever.

• Discussions and pilot initiatives are now exploring EAH as a strategy for re-appropriating neighborhoods that have been devastated by foreclosures.

• .

Today’sWake-Up Call: The Mortgage Market Meltdown


Catalysts for Change


Catalyst for Change 1: Employer-Assisted Housing

REACH model (Regional Employer-Assisted Collaboration for Housing)

Counseling/ homeownership education

Down payment assistance

Rental assistance

Small Business Consortium

Matched savings for homeownership (IDA)

Below market rate loans for purchase or home improvement

Forgivable loans based upon tenure

Marketing

Menu of Options for Employer EngagementHelp Employees Access Existing Homes


Catalyst for Change 1: Employer-Assisted Housing

Loan pool investments

Land donations

Land bank

Rental property development/investments

For-sale and rental housing development

Provide below market loans to developers of workforce housing

Advocacy

Menu of Options for Employer Engagement:Help Create New Homes for Employees

System Sensor: An Illinois EAH Pioneer


Employer LeadershipPiloted REACH model, contracting with local housing expert to provide homebuyer education, credit counselingto employees

Employees received up to $5000 in down payment assistance

ResultsCompany saved $100,000 annually in reduced turnover andabsenteeism, after recouping costs

Over 60 System Sensor employees purchased homes near work

Pittway Corporation sold the System Sensor Plant to Honeywell, which opted to continue the successful program

Leading the trendProgram inspired new incentives now available State-wideOver 70 other employers have launched programs, assistingover 1,500 employees to purchase homes in Illinois.

- Mr. Harris continued to be among the most persuasive advocates for workforce housing policy and production.

King Harris, formerly of System Sensor, utilized the REACH model and became a strong advocate of Employer-Assisted Housing in the business community after experiencing the many benefits of offering housing assistance to his employees.

Riverdale, Illinois: Three Employers offer Rental Assistance


Employer Solution

Village of Riverdale, Robinson Engineering, and St. James Health Systems will expand their existing REACH programs to offer $50 per month per employee for rental assistance up to 24 months when homes are completed

Employers will also match employee savings for home ownership

Results

Federal tax credits (LIHTC) secured to assist in mixed-income development by the Developer—4 companies benefit (including Developer)

Employers obtain EAH tax credits for investment

The Connection

EAH renters will also have first opportunity to buy in Phase II

These 3 employers also offer down payment assistance through the traditional REACH model

Rendering of new construction mixed-income homes, first phase expected to be completed in 2008

Troubled Pacesetter Development

Charter One Bank:

Investment in New Initiatives


Employer Objectives

Attract and retain talented workforce

Offer competitive benefit

Educate employees about bank’s loan programs

Employer Solution

The bank has provided down payment assistance to 140+ employees since launching their program in 2004

From the Company into the Community

Experiencing the benefits of offering EAH to their valuable employees was the beginning of the story

Charter One Bank then decided to take its level of commitment to the next level by sponsoring the Charter One Workforce Housing Initiative to create new homeowners through new employers joining the cause

"Our Employer-Assisted Housing program has given us an edge in attracting and retaining talented people. Over 140 Charter One employees have benefited from this program, enabling them to purchase homes in the Chicagoland area, including homes in redeveloping communities. This important investment in our colleagues exemplifies our continued commitment to the communities in which we live and work”.

- Scott C. Swanson. President and CEO, Charter One Bank

which was founded in 1985, is the only

broad-based coalition working to promote affordable housing

opportunities throughout Illinois."

University of Chicago and University of Chicago Hospitals:

Investment in Loan Pool

Employer Objectives

Preserve existing housing stock for households under 60% AMI who rent in the community

Stabilize surrounding community

Offer alternative resources to sub-prime lending market

Employer Solution

In 2006, made $1 million investment in Community Investment Corporation’s loan pool for rental housing preservation and rehabilitation

Target to preserve affordable housing in the five community areas surrounding the University’s Campus

How it all started

Employer launched traditional REACH program in 2003 with $7,500 down payment assistance for University employees (with help of local housing expert) and has assisted nearly 150 new homebuyers within targeted areas around the campus


Down payment assistance: $5,000-$10,000 Homebuyer educationUp to 25 buyers per yearPromote walk-to-work/community revitalizationEncourage live-near-transit


Loyola University: Promoting walkability and public transit

Employer-assisted housing (EAH) is a cost effective, easy to administer way for employers to help their employees buy or rent homes close to work.

In Illinois, the Metropolitan Planning Council, Housing Action Illinois and more than a dozen counseling agencies --in conjunction with the State --make up REACH IL (Regional Employer Assisted Collaboration for Housing). See www.reachillinois.org for more info.

State incentives, including tax credits and matching funds, are available to employers and employees who work with REACH IL partners.

REACH IL makes it easy and financially compelling for employers to offer EAH programs to their employees, by

Tailoring a model program for each employer Providing homeownership education, financial counseling and leveraging additional resources Managing the down payment or rental assistance provided by employers

As a result of the 70+ Illinois programs launched since 2000:More than 1,500 employees have bought homesOver 2,500 employees have received counseling/education


Advocate Bethany HospitalAllstate CorporationChase BankCharter One BankChicago Public SchoolsChicago Police and Fire DeptsCity of EvanstonCity of North Chicago City of PeoriaCity of Rock IslandCity of St. CharlesDeLaSalle InstituteHoneywell’s System SensorIllinois College of Optometry

• Illinois Institute of Technology • Lake Forest College

These are some of the companies that have launched EAH programs.

Loyola UniversityMB Real Estate Services Medela Corporation Mercy Hospital and Medical CenterMetropolitan Planning Council Robinson Engineering Rock Island School District Rosenthal Brothers Rush University Medical Center Seaquist Perfect St. James Hospital Swedish Covenant Hospital The John Buck Company The Walsh Group University of Chicago/HospitalsVillage of Riverdale


Understanding Employer-Assisted Housing: A Guidebook for Employers

KEY TOPICSWhat is Employer-Assisted Housing? Far-Reaching Benefits of EAH How to Create and Administer a Program

FEATURED CASE STUDIESAmerican Family Life Assurance Co., Inc. , GA Applied Materials, Inc., CACitizens Financial Group, Inc., RICVS/Caremark, DCHarley-Davidson Motor Company, WIHatch & Parent, A Law Corporation, CANorthrop Grumman Corp., NY and MS The Schwan Food Company, MN System Sensor, ILUniversity of Chicago and University of Chicago

Medical Center, IL


Why Employer-Assisted Housing?

EAH benefits . . .

The EMPLOYEE

The EMPLOYER

The COMMUNITY

The HOUSING POLICY ARENA

EAH is a win for everyone.


Metropolitan Mayors Caucus Housing Task Force Housing Endorsement Criteria Housing Action AgendaWelcome Home: Housing Our Community 12-minute housing video and cable TV segment Homes for a Changing RegionModel Housing PlanSensible Tools for Healthy CommunitiesPlanning 1-2-3Housing 1-2-3Home Grown” best practicesEmerging “Inter-jurisdictionalStrategies

Catalyst for Change 2: The Toolbox Developed by and for Mayors


Legislative Agenda

Communications Strategieswww.housingillinois.org

On-the-ground networks(Technical Assistance and Community Acceptance Strategies)

Catalysts for Change 3: Alignment of Advocates’ Voice


Resulting Statewide Activity

First Ever State Housing Policy DevelopedPrioritizing underserved populationsPromoting affordability & choiceCreating & preserving affordable and workforce housingSupporting state & local leaders in advancing housing solutionsCoordinating state departments to better link housing, economic and transportation development.Implementing administrative and legislative changes - demonstrating that “this is real”

This Plan has been updated and published annually, with semi-annual progress reports released along the way

State leaders responded to business, municipal and community voices


2002 Illinois Affordable Housing Tax Credit2002 Local Planning Technical Assistance

2003 Housing Opportunity Tax Incentive

2004 Federally Subsidized Housing Preservation2004 Affordable Housing Planning and Appeals

2005 Extension of IL Affordable Hsg Tax Credit2005 Rental Housing Support2005 Regional Planning Act

2006 Comprehensive Housing and Planning2006 Business Location Efficiency

2007: Good Housing Good Schools2008: Line item for Housing in State’s Capital Bill

IL Housing Legislation since Implementation of EAH,

Statewide Housing Policy


SB 1078 in the Senate/ HR 1850 in the House

Offers $.50 federal tax credit on every $1 employer invests

Benefits nonprofit employers with transferable credit

Provides $5 million/year for counseling agencies, structured as receding grants – to encourage counseling experts to gradually replace federal dollars with employer contracts

Introduces a change in the tax code so that the money received by employees from their employers for EAH is non-taxable

Reframes the national housing dialogue at a time when private sector investment is especially critical


National Opportunity: Please Support Housing America’s Workforce Act

Perhaps the only silver lining to today’s housing market meltdown -- including the foreclosure crisis -- is that housing affordability is a top of mind issue.The price of gas, climate change and the prospects of a new administration in DC further point toward stronger live near work and affordable workforce housing policesWhat can we do with the next transportation, climate and tax bills in DC?www.t4america.org and Brookings Institution’s Blueprint for American Prosperity are among the thought leaders offering promising suggestions.

Additional Federal Opportunities on the Horizon


For more information on “Housing for a Competitive Workforce:

A Campaign Strategy,”

please visit:

www.metroplanning.orgor

www.reachillinois.orgor

Phone: 312/863-6007

Employer-Assisted Housing...Target to preserve affordable housing in the five community areas...

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