It's starting to catch on, thanks to killer commutes and a tight housing supply.
It's Employer-Assisted Housing, a design-it-yourself public/private initiative that helps employers help employees gain the advantages of home ownership ... often including a shorter commute.
More companies are coming forward now that the State of Illinois has stepped up with matching funds and income tax credits to amplify an employer's investment — an investment that quickly pays for itself in reduced employee turnover and training expense.
Employers as diverse as Bank One, the Chicago-based but nationwide bank holding company, and Mount Sinai Hospital on the city's West Side, are launching employer-assisted housing programs. So has Northwest Community Healthcare in Arlington Heights. Even local governments are stepping up, such as west suburban St. Charles and south suburban Riverdale.
But employers and employees aren't the only ones who benefit. When employees buy housing nearer to work or public transportation, thereby shortening or eliminating automobile commutes, everyone in the region benefits. After all, shorter and fewer automobile trips mean less traffic congestion and air pollution.
"The benefits go far beyond the home buyer and the employer," said Gov. George Ryan, who has supported the live-near-work concept as part of his multi-faceted Illinois Tomorrow program for balanced growth.
So what's the catch?
There is none. And that's a big reason why BP of America, on Friday, Dec. 7, will present MPC and its partners in the Regional Employer-Assisted Collaboration for Housing (REACH) with the energy corporation's prestigious Leader Award. Along with a $100,000 grant to strengthen program implementation, the Leader Award is presented annually to "programs that identify areas of need, create constructive solutions and provide tools for change that result in substantial, long-term progress."
The Leader Award caps a year of remarkable progress for employer-assisted housing and for the Council's local REACH partners. The program proved its worth in an initial pilot, received a major boost from the State of Illinois and is now being discovered by more and more employers.
The initial breakthrough was the unqualified success of an employer-assisted housing program prototype launched in late 1999 at System Sensor in west suburban St. Charles. In just the first 12 months, the company helped 16 employees become homeowners by extending to each a $5,000 forgivable loan toward their down payment. Company executives said System Sensor more than recouped its outlays that first year in the form of reduced turnover and training expenses. By the end of 2001, REACH partner Joseph Corporation had helped 32 System Sensor employees buy homes closer to the plant.
Impressed with those results, the Illinois Housing Development Authority (IHDA) last April set aside $268,000 in matching funds to leverage incentives offered by employers working with MPC and its REACH partners. So long as a family of four's income doesn't exceed 80 percent of the Chicago area median (median for that family being $81,075), IHDA will match an employer's contribution up to a maximum of $3,000. For families earning less than 50 percent of median, the Authority will match up to $5,000. That means the total subsidy for some families can reach $10,000, said IHDA Director Peter R. Dwars.
In August, Gov. Ryan authorized another incentive by approving $13 million worth of state income tax credits to promote expanded housing options, including $2 million reserved for employer-assisted housing subsidies and another $1 million for counseling. Though aimed primarily at developers of new or rehabbed housing, the "50-cents on a donated dollar" is also available to employer-sponsored home ownership projects that serve families with incomes of no more than 120 percent of area median.
Employer-Assisted Housing got another boost last summer when Chicago Metropolis 2020, a regional initiative by the area's top business leaders, issued "Metropolis Principles" urging companies to consider transit and affordable housing when deciding where to locate.
Several Chicago area companies, health care institutions and governments have been quick to recognize the possibilities and step up with their own employer-assisted housing program plans, no two of which are exactly alike. Indeed, flexibility may be the program's biggest advantage.
Bank One, the nation's sixth largest bank holding company, will provide $2,500 in purchasing assistance to 150 of its employees nationwide. Up to 25 of the bank's Chicago-area employees are expected to qualify for IHDA matching funds. They will receive counseling and assistance from one of the REACH partners, depending on where they buy, though the bank's program imposes no closer-to-work requirement.
"We want to help all of our employees realize the dream of home ownership," said Jamie Dimon, Bank One chairman and CEO, in announcing the program in October. "These grants coupled with our mortgage products will help our employees' families get over the biggest hurdles to owning a home — a down payment and credit approval."
Mount Sinai Hospital's employer-assisted housing program requires that nurses accepting $4,000 in down payment assistance ($2,000 from Sinai, $2,000 from IHDA) participate in the "Livin' in Lawndale" purchase/rehab program run there by REACH partner Neighborhood Housing Services of Chicago.
In Arlington Heights, Northwest Community Healthcare hopes especially to cut down on long employee commutes. The hospital has set aside up to $50,000 and employee families earning less than 80 percent of median are encouraged to apply for homeownership assistance. North West Housing Partnership will provide counseling.
Two suburbs are structuring programs, but for different reasons. St. Charles, in Kane County, is trying to help potential buyers deal with the suburb's $278,000 average home price. Riverdale in Cook County, assisted by the South Suburban Housing Center, is aiming to spur demand in the housing stock there in order to counter recent economic setbacks.
Motivations and program details vary, but employers who have looked at employer-assisted housing seem to agree on this fundamental: Helping employees achieve homeownership and shorter commutes may be new to most employers, but in the end, it amounts to old-fashioned good business.
Note to reporters: Click here for a list of employer and IHDA contacts. For an overview, contact Robin Snyderman, MPC Housing Director, at 312.863.6007.
Metropolitan Planning Council (MPC)
Illinois Housing Development Authority (IHDA)
Public Affairs Director
Chicago Metropolis 2020