Metropolitan Planning Council Employer-Assisted Housing A Proven Workforce Housing Strategy

Metropolitan Planning Council

www.metroplanning.org

Employer-Assisted Housing A Proven Workforce Housing Strategy

“a nonprofit, nonpartisan group of business and civic leaders committed to serving the public interest through the promotion of sensible growth, economic competitiveness and equity of opportunity”

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

Metropolitan Planning Council Page 2

Who is the Metropolitan Planning Council?

Program Areas

Housing

Regional Development

Transportation

Urban Development

What is the Metropolitan Planning Council?


Research: MPC begins all efforts with primary research.

Policy Development: We formulate independent policies based on our research.

Advocacy/Implementation: We activate change through coalitions, pilot initiatives, technical assistance, and direct lobbying.

Housing and Growth Facts


0 50 100 150 200 250 300 350

Bolingbrook, Will

Union, McHenry

Gurnee, Lake

St. Charles, Kane

Naperville, DuPage

Elk Grove Village, Cook

Cit

y, C

ou

nty

Salary, Housing Value ($1,000)

Attainable Price, 1-Income HH*

Attainable Price, 2-IncomeHH**Average Market Price

Bar 1

* Database Admin. @16.79/hr ** Medical Assistant @$10.69/hr and Database Admin. @16.79/hr

Homeownership in High Job Growth Areas is Out of Reach for the Growing Entry-Level Workforce


SINCE 1978 . . . National increases in

homeownership rates overall 65.2% to 68%

National decreases in homeownership rates for working families 62.5% to 56.6%.

National Trends


:

-4

-2

0

2

4

6

8

10

12

14

16

Percent

Population Employment(1991-2000)

Housing Units Rental Units

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


Rental Housing is NOT a Safe Back-up Plan

Neighborhood/ Municipality

County Median Home Price1

$/Hr. Wage to Buy2

Approx. average monthly rent3,

$/Hr. Wage to Rent

Average $/Hr. Wage4

All Occupations

Waitperson Database Admin.

Medical Asst.

Firefighter

Chemical Technician

Retail Sales Manager

Pre-school teacher

Uptown, Chicago

Cook $265,000

$38.44 $811.00

$17.98 $16.18 $6.94 $30.52 $13.45 $29.34 $20.98 $17.48

$12.34

Near West Side, Chicago

Cook$312,00

0 $45.2

6 $811.00 $17.9

8 $16.18 $6.94 $30.52 $13.45 $29.34 $20.98 $17.48$12.3

4

Oak Park Cook $307,500

$44.61 $921.00

$17.71 $16.18 $6.94 $30.52 $13.45 $29.34 $20.98 $17.48

$12.34

Riverdale Cook (south)

$120,000

$17.41 $574.00

$11.04 $16.18 $6.94 $30.52 $13.45 $29.34 $20.98 $17.48

$12.34

Elk Grove Village

Cook (north)

$211,000

$30.61 $994.00

$19.11 $16.18 $6.94 $30.52 $13.45 $29.34 $20.98 $17.48

$12.34

Naperville DuPage

$320,000

$46.42 $984.00

$18.92 $16.21 $6.86 $36.11 $12.72 $26.78 $17.72 $17.85

$12.42

St. Charles Kane

$368,000

$53.39

$1,119.00

$21.51 $13.98 $6.88 $26.71 $13.11 $25.08 $16.86 $16.46

$13.54

GurneeLake

$264,000

$38.30 $939.00

$18.05 $16.60 $10.37 $29.20 N/A $27.28 $17.07 $18.54

$22.79

Union McHenry

$350,000

$50.77 $709.00

$13.63 $15.20 $7.58 $32.62 $13.15 $16.05 $22.29 $18.25 N/A

Bolingbrook Will

$238,000

$34.53 $924.00

$17.72 $15.22 $6.95 $37.49 $14.84 $24.48 $18.50 $20.24

$11.53


“We need the people who need affordable housing”

Cannot afford to buy or rent

Can afford to rent, not buy

Can afford to buy or rent

Where housing is less expensive, jobs and other opportunities are scarce

3% of all metro Chicago housing permits in the ’90s were for multifamily housing – compared to 22% nationwide.

Stress Indicators


http://images.google.com/imgres?imgurl=www.metro-region.org/images/traffic_24.jpg&imgrefurl=http://www.metro-region.org/letstalk/tradeoffs2.html&h=180&w=290&prev=/images%3Fq%3Dcommutes%26svnum%3D10%26hl%3Den

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


Catalysts for Change


Problem

Metro Chicago jobs and population are growing at a faster rate than the supply of workforce housing.

Issue

Workforce problems result from this ‘Jobs-Housing Mismatch’.

Solution

Employer-Assisted Housing (EAH) – Maximizes employee retention by implementing this outsourced, easy-to-administer employee benefit.

Catalysts for Change 1: Employer-Assisted Housing


An employer investment that pays many times over

Supports institutions and corporations by linking growing workforce with housing near the job

Reduces turnover, hiring and training costs and creates stable workforce

Strengthens communities by promoting investment and reducing traffic

Creates partnerships with non-profits housing developers and corporations (REACH)

Cultivates a new constituency of housing supporters – business leaders!

Employer-Assisted Housing


Company contracted with both MPC and local REACH partner

Employees received down payment assistance and homeownership counseling

Company saved $100,000 annually in reduced turnover

60+ homeowners purchased within 15 miles of work

Company sold to Honeywell Inspired new incentives now

available through State and the engagement of over 60 other employers

Approximately 1,000 employees have since purchased homes, thanks to employer assistance

System Sensor: How One Success Story Leveraged Resources, Partners, Supporters


An EAH program can: Assist employees to afford housing in high cost areas

Encourage employees to live in the community

Engage employees in neighborhood life

Support community development and reinvestment

Employer-Assisted Housing helps with neighborhood reinvestment.


Employer Role

Identifies targeted population and approximate budget

Provides small grants to employees or local loan pool for housing assistance

Contracts with non-profits for technical assistance, education and counseling services and evaluation

How it Works

REACH (nonprofit counseling) Partner Role

Administers the EAH program

Provides credit counseling and housing education to employees

Connects buyers and renters with financing products, financial institutions and realtors

Applies for, administers state tax credits

Financial Partner and Developer Roles

May offer special loan products or other incentives

May provide program support for REACH partners

Assists in marketing efforts for employees

Can purchase tax credits Are often leading EAH employers

Metropolitan Planning Council Role

Supports partnership development

Provides assistance in program design, ongoing t.a. and resource development

Coordinates program evaluation

Facilitates outreach to companies

Assists in marketing and publicityMetropolitan Planning Council Page 16

State Matching FundsState match of $1 for each $1 of down payment/closing cost

assistance provided to an employeeReimbursement of some counseling costs for successful home

purchases by employeesParticipating buyers’ income restricted to 80% Area Median Income

Illinois State Income Tax Credits50 cent tax credit for $1 invested in EAH, for both rental and

homeownership models, for households earning up to 120% AMICredit is “transferable” if donating entity does not have tax liability

Private, Municipal and County ProgramsFirst-time homebuyer programs, Federal Homeloan Bank AHP dollars,

other matching resources

Federal Tax BenefitsFederal tax benefit for contributing to non-profit organization

“Housing America’s Workforce Act”

Nonprofit partner can leverage numerous resources


Advocate Bethany Hospital Allstate Corporation Bank of America Bank One/Chase Charter One Bank Chicago Draperies and Carpet Chicago Public Schools Chicago Police and Fire Depts Christie Weber Landscaping City of Evanston City of North Chicago City of Peoria City of Rock Island City of St. Charles DeLaSalle Institute Draper and Kramer First Midwest Bank Honeywell’s System Sensor Illinois College of Optometry

Sampling of Companies that have launched EAH programs Illinois Institute of Technology Lake Forest College MB Financial Bank MB Real Estate Services Medela Corporation Mercy Hospital and Medical Center Metropolitan Planning Council Midway Moving Northwest Community Healthcare 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


EAH in support of the Plan for Transformation

Rent Subsidies and IDAs

EAH Small Business Consortia

Inter-jursidictional EAH programs

EAH as preservation or development investments

Emerging EAH Models


Why Employer-Assisted Housing?

EAH benefits . . .

The COMMUNITY

The EMPLOYER

The EMPLOYEE

The HOUSING POLICY ARENA

EAH is a win for everyone.


Metropolitan Mayors Caucus Housing Task Force

Housing Endorsement Criteria Housing Action Agenda “Sensible Tools for Healthy

Communities” Model Housing Plan “Welcome Home: Housing Our

Community” 12-minute housing video and cable TV segment

“Homes for a Changing Region” Employer-Assisted Housing

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


Legislative Agenda

Communications Strategies Housing Illinois www.housingillinois.org

On-the-ground networks Community Acceptance Strategy

Catalysts for Change 3: Alignment of Advocates’ Voice


http://www.housingillinois.org/

Resulting Statewide Activity


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.

Examples of administrative and legislative changes demonstrating that “this is real”

Catalysts for Change 3: Alignment of Advocates’ Voice


2002 Illinois Affordable Housing Tax Credit

2003 Housing Opportunity Tax Incentive Act

2004 Federally Subsidized Housing Preservation Act

2004 Affordable Housing Planning and Appeals Act

2005 Extension of Illinois Affordable Housing Tax Credit

2005 Rental Housing Support Bill

2006Comprehensive Housing and Planning Act

2006 “Location Matters” Act

Illinois Housing Legislation since 2000


National Opportunity: Please Support Housing America’s Workforce Act

S1330 in the Senate/ HR 3194 in the House

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

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.

It reframes the national housing dialogue at a time when private sector investment is especially criticalMetropolitan Planning Council

Page 26

For more information, please visit

www.metroplanning.orgor

www.reachillinois.org

http://www.metroplanning.org/

http://www.reachillinois.org/

Documents

Metropolitan Planning Council Employer-Assisted Housing A Proven Workforce Housing Strategy