For Mount Sinai Hospital on Chicago's West Side, it is a way to "bond" registered nurses to the institution who might otherwise jump elsewhere for more pay.
For Bank One, the Chicago-based national financial giant, it is a way "to help all of our employees realize the dream of home ownership."
For suburban St. Charles, it is a way to help modestly paid municipal employees get a toe-hold in the pricey west suburban housing market.
"It" is employer-assisted housing, a public/private home-purchasing initiative that can be tailored to fit the needs of individual employers and employees, but also benefits virtually everyone in the region.
An employer-assisted housing initiative was launched two years ago by MPC, along with a coalition of community-based homebuyer education groups called the Regional Employer-Assisted Collaboration for Housing, or REACH. The idea is to combat the Chicago metropolitan area's worsening jobs/housing mismatch. That is, the mismatch between the bounty of jobs being created in suburban corridors and the lack of housing being developed nearby for the average wage-earner. Virtually everyone in Chicagoland suffers from one symptom of this mismatch: worsening rush-hour traffic jams and auto-related air pollution, as more and more workers drive longer and longer distances from housing they can afford to jobs they can't easily reach.
The first employer-assisted housing pilot program was launched in late 1999 at System Sensor, a maker of smoke alarm systems in west suburban St. Charles. The key player there was then-CEO King Harris, an MPC board member and senior adviser with the business leadership organization called Chicago Metropolis 2020. Harris was convinced that helping workers buy houses a short drive from the factory would pay dividends in the long run. He was right. Results from the program's first year, in which 16 workers received forgivable loans of up to $5,000 each for down payments on houses, showed the company recouped its entire investment within 12 months and saved $100,000.
How? Reduced turnover, for one thing, because employees faced with 90-minute one-way commutes tend to be always on the prowl for a job closer to home. Less turnover quickly translates into increased productivity and decreased training costs. There's also reduced absenteeism and tardiness among program participants, not to mention a discernable increase in morale.
The latter is understandable, for suddenly an employer-assisted homebuyer has less road stress, more time to spend with his or her family and, most important of all, a home, with all the psychic and economic advantages ownership brings.
State matching funds and tax credits
Early success at System Sensor, where by Oct. 31, 2001 32 employees had purchased homes via employer-assisted housing, demonstrated that MPC and its REACH partners have a workable model.
Another breakthrough occurred last April, when the Illinois Housing Development Authority (IHDA), impressed with System Sensor's results and the potential of employer-assisted housing, voted to sweeten the program's benefit. Specifically, IHDA's board set aside $268,000 to match incentives offered by employers involved with MPC and REACH. So long as an employee's family income doesn't exceed 80 percent of the regional median ($52,500-a-year for a family of four), IHDA will match the employer's contribution up to a maximum of $3,000. For families earning less than 50 percent of median, IHDA will match up to $5,000, meaning the total downpayment assistance can be as much as $10,000.
In October, Gov. George Ryan added yet another incentive when he approved $13 million worth of state income tax credits to promote housing options. Though aimed primarily at developers of new or rehabbed housing, the "50-cents on a donated dollar" tax credit is also available for employer-sponsored home ownership programs that serve families with incomes of less than 120 percent of the area median.
No two programs exactly alike
No two programs are exactly alike in scope or detail, with each customized to meet the employer's and employees' needs.
The most comprehensive program being launched is at Bank One. The nation's sixth largest bank holding company is offering $500,000 in benefits to eligible employees nationwide (families with incomes below 80 percent of the regional median). First-time homebuyers everywhere will be eligible for a $2,500 cash grant toward a down payment. In Illinois, IHDA will be tapped to supply another $2,500.
Mount Sinai Hospital is building a strong location requirement into its program, which, at the outset, is being offered only to members of its nursing staff. By providing a $4,000 down payment subsidy ($2,000 from Sinai, $2,000 from IHDA) the West Side hospital hopes to boost RN participation in "Livin' in Lawndale," a purchase-and-rehab program run by Neighborhood Housing Services of Lawndale, MPC's local REACH partner.
At Northwest Community Healthcare in Arlington Heights, the main goal is cutting down on long employee commutes. Affordability of housing in the northwest suburbs was a big issue that emerged from an ownership fair and survey conducted by the hospital. So Northwest officials are setting aside money for down payment assistance, with any employee and family within "80 percent of median" eligible. MPC REACH partner North West Housing Partnership will be doing the counseling.
St. Charles is up against a classic jobs/housing mismatch, in that the suburb's $278,000 average home price is beyond the reach of many who work for the municipality, especially younger families.
The Village of Riverdale, meanwhile, sees employer-assisted housing as a local redevelopment tool. "When Acme Steel closed we just knew we needed to try other ways to redevelop the town," said Mayor Zenovia Evans. So the blue-collar south suburb approved start-up funds to give up to $3,000 in down payment assistance to employees purchasing or building in Riverdale.
State match will need to be replenished
Now that employer-assisted housing is catching on, it is becoming apparent that IHDA's initial $268,000 set aside for northeastern Illinois employers will be exhausted sometime in 2002.
Does funding for employer-assisted housing stand a chance in this spring's tough budget negotiations? It does, insists MPC Housing Director Robin Snyderman. But only if state lawmakers stop to consider the cost-effectiveness and widespread benefit of helping workers buy housing closer to work.
For more information on employer-assisted housing, contact MPC Housing Associate Samantha DeKoven at 312.863.6021.