Teachers overcome tough housing market - Metropolitan Planning Council

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Teachers overcome tough housing market

Chicago Public Schools' employer-assisted housing (EAH) program demonstrates the value of counseling and employer support.

The nation's housing crisis has not dampened participation in the Chicago Public Schools' Teacher Homebuyer Assistance Program. The number of buyers who purchased in 2006 and 2007 stayed relatively the same, despite concerns that the slowing housing market would interfere with the program.  According to a data analysis by MPC, buyers in 2007 were able to purchase more single-family homes, with more incentives from the sellers, banks and government sources. “More importantly, we know that our teachers are secure in their purchases and understand the responsibilities of homeownership” said CPS CEO Arne Duncan.

 

As CPS Teacher Housing Director Diana Johnson explained, “The Board of Education launched this program in April of 2005 as a strategy for improving teacher retention.  We’d found that if we can bridge a teacher through a fifth year at CPS, then we’ve likely secured a career teacher.” 

 

Since its launch, the CPS program has helped 524 teachers buy homes in the city of Chicago . With the idea of teacher retention in mind, the assistance is given in the form of a forgivable loan. As long as the teacher remains an employee of CPS and stays in the home for five years, the loan is forgiven.

 

Rogers Park Community Development Corporation provides homebuyer education and counseling that is essential to the sucessful EAH program, ensuring the employees make sound decisions, understand the various lender programs available to them, and leverage the CPS support to obtain additional financial assistance.  

 

“The counseling is critical to ensuring that teachers not only understand the process, but know how to protect themselves and their investments once they  purchase. The teachers have been able to take advantage of a buyers market and not only get good homes, but better financing as well,” said Caleb Sjoblum of Rogers Park CDC.

 

To date, there has been only one teacher who has had any problems maintaining the home purchased through the program, and 12 who have left CPS employment.

 

The Chicago Public Schools' Teachers Homebuyer Assistance Program was structured with financial support from the City of Chicago Dept. of Housing and The Partnership  for New Communities, as well as the technical assistance from  MPC.  MPC also helped CPS obtain and sell  state EAH tax credits . This was a key incentive for CPS to create a program because it helped the district recapture a portion of its investment. CPS received tax credits on the first $500,000 invested in EAH, which sold for about $200,000, thus reducing the cost of the program by 40 percent.

 

“The success of CPS' program, particularly in this housing market, underscores what an incredibly effective workforce stability tool EAH can be," said Robin Snyderman, MPC vice president of community development. "Beyond achieving its original teacher retention goals, the CPS story is also about how EAH prevents employees from falling prey to predator loans or, worse, foreclosures."

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