Transcript Employer-Assisted Housing: A Proven Strategy for “Housing a Competitive Workforce” American Planning Association October 14, 2008

Employer-Assisted Housing:
A Proven Strategy for “Housing a Competitive Workforce”
American Planning Association
October 14, 2008
Who is the Metropolitan Planning Council?
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
Metropolitan Planning Council
 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
Page 2
Housing and Growth Facts
(informing workforce housing
strategy in Illinois)
:
2000 Wake-Up Call: Rental Housing
is NOT Safe Back-up Plan
16
14
12
10
8
Percent
6
4
2
0
-2
-4
Population
Employment
(1991-2000)
Housing Units
Rental Units
Greatest deficit of housing for households earning below $20,000 per year
Supply of housing that is affordable not located in high job growth areas
Metropolitan Planning Council
Page 4
“Non-economic” barriers identified in 2000
 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
Metropolitan Planning Council
Page 5
Why is housing an employer’s issue?
City
(County)
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
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
Chemist
Married to
Financial
Manager
Cannot afford to buy or rent
Can afford to rent, not buy
Can afford to buy or rent
Metropolitan Planning Council
Page 7
The Update: Local Workforce Housing Market Realities
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.
Affordability Gap
Homes Affordable to Workers by Income Level
Availability Gap
There is a shortage of homes affordable
to the workers in our communities.
35,000
# of Workers or Available Homes
Many workers in our communities
cannot afford to live near work because
prices are too high and incomes too low.
30,000
25,000
20,000
15,000
Workers
29,830
(36%)
27,835
(33%)
Homes
26,358
(69%)
10,000
5,000
1,449
(4%)
3,621
(9%)
13,020
(16%)
6,690
(18%)
12,875
(15%)
0
Less than $25,000 $25,000 to $49,999 $50,000 to $74,999 $75,000 or Higher
Workers' Income Levels
By 2030, an additional 4,800 rentals and 10,000 for-sale opportunities will be needed for
households earning < $75k.
Metropolitan Planning Council
Page 8
The Implications for Businesses
Excessive housing costs for employees

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lead to higher turnover rates
make it difficult to recruit new talent
reduce worker productivity
produce costly traffic and congestion
reduce investment in and connection to communities
Metropolitan Planning Council
Page 9
Jobs-Housing Mismatch
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.
Metropolitan Planning Council
Page 10
Today’sWake-Up Call: The Mortgage Market Meltdown
• 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.
• Metropolitan
.
Planning Council
Page 11
Catalysts for Change
Catalyst for Change 1:
Employer-Assisted Housing
Menu of Options for Employer Engagement
Help Employees Access Existing Homes

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
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Marketing
Metropolitan Planning Council
Page 13
Catalyst for Change 1:
Employer-Assisted Housing
Menu of Options for Employer Engagement:
Help Create New Homes for Employees

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
Metropolitan Planning Council
Page 14
System Sensor: An Illinois EAH Pioneer
Employer Leadership
 Piloted REACH model, contracting with local housing
expert to provide homebuyer education, credit counseling
to employees
 Employees received up to $5000 in down payment assistance
Results
 Company saved $100,000 annually in reduced turnover and
absenteeism, 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 trend
 Program inspired new incentives now available State-wide
 Over 70 other employers have launched programs, assisting
over 1,500 employees to purchase homes in Illinois.
- Mr. Harris continued to be among the most persuasive
advocates for workforce housing policy and production.
Metropolitan Planning Council
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.
Page 15
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
Troubled Pacesetter Development
 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
Rendering of new construction mixed-income homes, first phase
expected to be completed in 2008
 These 3 employers also offer down payment assistance through the traditional REACH
model
Metropolitan Planning Council
Page 16
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
"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
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
Metropolitan Planning Council
Page 17
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
which was founded in 1985, is
the only broad-based coalition
working to promote affordable
housing opportunities
throughout Illinois."
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
Metropolitan Planning Council
Page 18
Loyola University: Promoting walkability and public transit
 Down payment assistance:
$5,000-$10,000
 Homebuyer education
 Up to 25 buyers per year
 Promote walk-towork/community revitalization
 Encourage live-near-transit
Metropolitan Planning Council
Page 19
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 homes
 Over 2,500 employees have received counseling/education
Metropolitan Planning Council
Page 20
These are some of the companies that have launched EAH programs.
 Advocate Bethany Hospital
 Allstate Corporation
 Chase Bank
 Charter One Bank
 Chicago Public Schools
 Chicago Police and Fire Depts
City of Evanston
 City of North Chicago
 City of Peoria
 City of Rock Island
 City of St. Charles
 DeLaSalle Institute
 Honeywell’s System Sensor
Illinois College of Optometry
• Illinois Institute of Technology
• Lake Forest College
Metropolitan Planning Council
Loyola University
 MB Real Estate Services
 Medela Corporation
 Mercy Hospital and Medical Center
 Metropolitan 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/Hospitals
 Village of Riverdale
Page 21
Understanding Employer-Assisted Housing: A Guidebook for Employers
KEY TOPICS
 What is Employer-Assisted Housing?
 Far-Reaching Benefits of EAH
 How to Create and Administer a Program
FEATURED CASE STUDIES
 American Family Life Assurance Co., Inc. , GA
 Applied Materials, Inc., CA
 Citizens Financial Group, Inc., RI
 CVS/Caremark, DC
 Harley-Davidson Motor Company, WI
 Hatch & Parent, A Law Corporation, CA
 Northrop Grumman Corp., NY and MS
 The Schwan Food Company, MN
 System Sensor, IL
 University of Chicago and University of Chicago Medical Center, IL
Metropolitan Planning Council
Page 22
EAH is a win for everyone.
Why Employer-Assisted Housing?
EAH benefits . . .
 The EMPLOYEE
 The EMPLOYER
 The COMMUNITY
 The HOUSING POLICY ARENA
Metropolitan Planning Council
Page 23
Catalyst for Change 2: The Toolbox Developed by and for Mayors
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Metropolitan Mayors Caucus Housing Task Force
Housing Endorsement Criteria
Housing Action Agenda
Welcome Home: Housing Our Community 12-minute housing
video and cable TV segment
Homes for a Changing Region
Model Housing Plan
Sensible Tools for Healthy
Communities
Planning 1-2-3
Housing 1-2-3
Home Grown” best practices
Emerging “Inter-jurisdictional
Strategies
Metropolitan Planning Council
Page 24
Catalysts for Change 3: Alignment of Advocates’ Voice
 Legislative Agenda
 Communications Strategies
 www.housingillinois.org
 On-the-ground networks
 (Technical Assistance and
Community Acceptance
Strategies)
Metropolitan Planning Council
Page 25
Resulting Statewide
Activity
State leaders responded to business, municipal and community voices
First Ever State Housing Policy Developed
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Metropolitan Planning Council
Prioritizing underserved populations
Promoting affordability & choice
Creating & preserving affordable and workforce housing
Supporting state & local leaders in advancing housing solutions
Coordinating 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
Page 27
IL Housing Legislation since Implementation of EAH,
Statewide Housing Policy
Metropolitan Planning Council
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2002 Illinois Affordable Housing Tax Credit
2002 Local Planning Technical Assistance
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2003 Housing Opportunity Tax Incentive
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2004 Federally Subsidized Housing Preservation
2004 Affordable Housing Planning and Appeals
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2005 Extension of IL Affordable Hsg Tax Credit
2005 Rental Housing Support
2005 Regional Planning Act
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2006 Comprehensive Housing and Planning
2006 Business Location Efficiency
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2007: Good Housing Good Schools
2008: Line item for Housing in State’s Capital Bill
Page 28
National Opportunity: Please Support Housing America’s Workforce Act

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
Metropolitan Planning Council
Page 29
Additional Federal Opportunities on the Horizon
 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 polices
 What 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.
Metropolitan Planning Council
Page 30
For more information on
“Housing for a Competitive Workforce:
A Campaign Strategy,”
please visit:
www.metroplanning.org
or
www.reachillinois.org
or
Phone: 312/863-6007