Employer-assisted housing strategies for public workers
San Mateo, Calif.
In San Mateo, Calif. where a median-priced home exceeded $1,100,000 in 2016, the San Mateo Community College District provides affordable homes for its staff and faculty. Through a partnership with a luxury apartment developer and a financial consultant, in combination with strong community outreach efforts, the college district built 44 affordable rental units for employees on a former parking lot owned by the college. Monthly rents in the residential development, called College Vista, are half the cost of market-rate housing in the area. The college district also administers a mortgage assistance program for employees interested in purchasing a home, offering up to $75,000 in the form of an interest-free soft second loan.
Through Maryland’s House Keys 4 Employees (HK4E) program, state government employees can receive assistance in addition to down payment assistance through the Maryland Mortgage Program. The HK4E program provides up to an additional $2,500 in down payment and closing cost assistance from the state in the form of a zero-interest deferred loan. An extra $1,000 in down payment assistance is also available to HK4E employees who purchase a home within 10 miles of their workplace, or in the same county as workplace, or in priority funding area.
New York City, N.Y.
Facing a shortage of qualified teachers, New York City created the Housing Support Program to encourage experienced math, science and special education teachers to work in one of the city’s middle or high schools. Teachers that make a three-year commitment to working for the Department of Education are eligible to receive up to $14,600 in housing subsidies over a two-year period. An upfront award of $5,000, which is fully forgiven over the three-year period, can be applied to mortgage payments or a down payment on a new home or, for renters, to cover broker fees, rental payments and/or security deposits. New residents can also use the funds to help pay for relocation to New York. A monthly stipend of $400 helps reduce ongoing housing costs over the subsequent two years.
The Wyoming Community Development Authority offers mortgage loan financing through the Spirit! of Wyoming Homeownership Initiative to help recruit and retain workers in the social services, education, healthcare and protective service sectors. In 2010, due to limited funding, WCDA limited the program so that only low- and moderate-income veterans and active military are eligible. Program participants receive a 30-year low, fixed-rate mortgage for a home up to $250,000.
Tax credits for participating employers
In Connecticut, employers that make contributions to nonprofit affordable housing programs are entitled to a dollar-for-dollar reduction in their corporate business taxes through the state Housing Finance Authority’s Housing Tax Credit Contribution (HTCC) program. Nonprofit housing providers are responsible for applying to the program and securing commitments for cash contributions from businesses once they have been allocated tax credits. Participating businesses receive a voucher for the credit amount, which can be applied to a range of corporate taxes. Under the HTCC program, a nonprofit corporation can receive up to $500,000 annually in state tax credits, which can then be sold to state business firms in return for cash contributions to the nonprofit corporation’s housing program. Each year CHFA allocates up to $10 million in state HTCC tax credits on a competitive basis to nonprofit corporations.
Florida’s Community Contribution Tax Credit Program, administered by the Office of Tourism, Trade and Economic Development, allows businesses to receive a 50-cent tax credit for every dollar donated to eligible organizations and government bodies that administer community development and low-income housing projects. A business may receive up to $200,000 in credits each tax year, which may be applied to corporate income taxes, franchise taxes or insurance premium taxes. The total annual allocation is $5 million in state tax credits.
In Illinois, the Affordable Housing Tax Credit Program offers a 50-cent state income tax credit for every dollar invested in employer-assisted housing or donated to the creation of affordable homes. Legislation creating the credit, passed in 2001, authorized an initial allocation of $13 million in tax credits and renewed every five years, with $2 million reserved specifically for employer-assisted housing initiatives. There are no restrictions on the number of employees that receive assistance, although to be eligible for the credit the total investment by an employer or group of employers must be at least $10,000. Illinois employers can receive the credit by offering down payment and closing cost assistance, below-market-rate mortgages, mortgage guarantee programs, rent assistance and/or individual development account plans to employees who earn 120 percent of area median income or less.
The Oregon Agriculture Workforce Tax Credit (AWHTC) program, formerly known as the Farmworker Housing Tax Credit Program, provides a 50-percent state income tax credit to individuals or organizations that invest in the construction, installation or acquisition and rehabilitation of farmworker housing. One-quarter of the beneficiaries of the tax credit are growers who build housing for their employees, with developers, community development groups and other organizations making up the balance of awardees. Total annual costs for all approved projects may not exceed $7.25 million (approximately $3.6 million in state tax credits are available each year). To be eligible, housing must only be occupied by farmworkers and their immediate families.
Organizational support for interested employers
Working families in Charlottesville, Va., are benefiting from an affordable housing trust fund established by the Charlottesville Area Association of Realtors (CAAR). The trust fund finances the CAAR Workforce Housing Plan, a program that provides no-interest second mortgages to help local teachers, police, nurses and firefighters bridge the gap between the cost of housing and the amount they can afford. Homes must be purchased in the jurisdiction where the borrower works. The loan is due upon sale of the home, and the funds are then available to assist another family. The program demonstrates the capacity of Realtors® to assist in working families’ search for affordable homes. Contributors to the trust fund include foundations, corporate donors, individuals and CAAR.
In Illinois, nonprofit organizations Housing Action Illinois and the Metropolitan Planning Council work with a network of more than a dozen other partners in the Regional Employer-Assisted Collaboration for Housing (REACH). Employers that contact REACH are paired with one of more than two dozen partner organizations that help develop a customized housing program that meets the company’s needs and budget. The program is then fully implemented by the REACH partner organization, with technical assistance and program review from Housing Action Illinois and the Metropolitan Planning Council. REACH has launched a special effort to target small businesses that need assistance implementing housing benefit programs. The program has helped over 1,800 households become homeowners since 2000.
In the late 1990s in Rochester, Minn., employers like the Mayo clinic recognizing the need for more affordable homes for its employees and other community residents. To address the situation, in 1999 the Mayo Clinic pledged $7 million toward a region-wide affordable housing effort. The leaders of First Homes raised $19.5 million total, including the donation from the Mayo Clinic, $3 million in contributions from other local employers, $1 million from local foundations, $3 million from the state’s housing finance agency, and $5.5 million in financing from the Greater Minnesota Housing Fund. The initiative offered down-payment assistance to area workers and finance the construction of affordable housing targeted to low-income workers. By 2007, the Initiative exceeded its goal of creating 500 affordable single-family homes and 375 affordable rental homes. Local leadership by the city of Rochester and the Rochester Area Foundation were key to the success of the project. As the housing crisis in Rochester eased, the focus of First Homes shifted to creating a community land trust to preserve affordable housing in the region.
Since 1994, the city of Seattle, Wash., has partnered with HomeStreet Bank to offer the Hometown Home Loan Program, an employer-assisted housing benefits program. Any area employer can offer the Hometown Home Loan Program as a no-cost benefit for their employees, which includes free homeownership education, savings on purchases and refinances and access to down-payment assistance programs.
General program profiles
Baltimore’s Live Near Your Work program helps local workers become homeowners by matching contributions from participating employers with grants between $2,000 and $5,000 per employee that may be applied to settlement and closing costs. The grant cost is divided equally between the City of Baltimore and the participating employer. Recipients must also contribute at least $1,000 towards the purchase of the home. Over 75 area employers participate in the program
San Jose, Calif.
The Silicon Valley Leadership Group is a business-related organization whose members are senior executives drawn from more than 200 companies in the area. Founded in 1977, the group was convened to address regional public policy issues, including housing. Through the Housing and Land Use Committee, business leaders encourage the construction of new homes near transit and employment opportunities, assist local workers in attaining homeownership and advocate for appropriate funding for housing at all levels of government.
In 2006, the committee co-chaired a successful statewide campaign to pass Proposition 1C, the Housing and Emergency Shelter Trust Fund Act, which brought nearly $3 billion in bond funding for housing for lower-income residents. The group has been active more recently in advocating for additional sources of sustainable funding for affordable housing, adoption of inclusionary housing policies, and promotion of transit-oriented development.