Flickr user Ian Freimuth (cc)
More than 60 percent of Chicagoans live in rental housing.
In the aftermath of the housing market crash, more than 60 percent of Chicagoans are renters, and more than half of Chicago’s renters are cost burdened, meaning they pay more than 30 percent of their incomes toward housing. One solution to this issue that many people do not consider is employee housing benefits.
Since 2001, the Metropolitan Planning Council has promoted Employer-Assisted Housing as a proven strategy that offers counselling and downpayment assistance to employees who live close to work and agree to remain with the employer for a set amount of time. In return, the employers gain competitive advantage over other businesses and save on the high costs of employee turnover.
In the past, employers who have offered the incentive have provided strictly downpayment assistance for homeownership. But in light of the recent trend toward rental, employers like the University of Chicago are starting to expand their horizons and consider offering rental assistance to their employees.
The University of Chicago, including University of Chicago Medicine, is among MPC’s longest participating employers; since 2003, the University has helped more than 240 employees purchase homes near its Hyde Park campus. In response to the changing economy, the University recently evaluated its strategy to find opportunities that better meet the needs of its employees and the surrounding communities. This evaluation led to the development of a new Employer-Assisted Housing program at the University of Chicago that makes benefits more widely available to employees. The University has removed previous income requirements for home purchases, tiered downpayment assistance to encourage employees to invest in the nine neighborhoods surrounding its campus, and instituted a rental pilot for employees moving into a portion of the Woodlawn community.
Employer-Assisted Housing rental benefits pilot
Many employers I’ve spoken with about Employer-Assisted Housing (both participating and prospective) have expressed great interest in offering rental assistance as a part of the benefits for their employees. The University of Chicago’s pilot is an exciting opportunity to test a rental component for the benefit of these employers in the region and beyond.
Here are the highlights of the University of Chicago’s rental pilot:
- Eligible apartments must be rented by employees who are newly locating within the Woodlawn Focus Area, defined by the University as Cottage Grove and Stony Island avenues to the west and east, and 60th and 67th streets to the north and south.
- Renters will be reimbursed for an amount that equals the total value of their first and last month’s rent, up to $2,400, split into two payments over the first year of the rental lease.
- Employees who receive rental assistance can also later receive downpayment assistance if they choose to purchase a home.
This new program is yet another testament to the University of Chicago’s commitment to strengthening neighborhoods that surround its Hyde Park campus. Managed by the Office of Civic Engagement and Facilities Services, the University’s Employer-Assisted Housing strategy has evolved since its inception over a decade ago, keeping pace with market realities and attracting development to neighborhoods that would benefit from home ownership investment while bringing their employees’ closer to work. The University’s $1.7 million investment has leveraged $45 million in employee home purchases in neighborhoods surrounding the campus; this new program broadens the opportunity to attract even more investment. For more information on this new strategy, view the University of Chicago's brochure and FAQs page.
While some employers might think “We don’t have much in common with the University of Chicago, so this strategy is not for us,” Employer-Assisted Housing is a customizable benefit that is designed to suit your individual goals and resources. Rental is particularly suitable for employers with smaller budgets for employee benefits.
MPC is eager to review the outcomes of the University’s rental pilot. With so many employers interested in adding a rental component to their current benefits, this pilot has the potential to spur programmatic and policy initiatives to expand the impact of Employer-Assisted Housing.
Employers: Have you ever considered offering housing benefits to your employees? Would a rental benefit be an attractive option to you and your employees?