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Employer-assisted housing 2002 mid-year report

The employer-assisted housing (EAH) initiative undertaken by the Metropolitan Planning Council (MPC) in collaboration with nonprofit housing organizations and regional employers made strides forward during the first half of 2002.  Started in 2000, a model program provided homes for 36 St. Charles-based System Sensor employees.  In 2001, five new employers signed on to develop EAH initiatives.  The initiative also received broader recognition, including new incentives from the state of Illinois and awards from outside institutions.  During the first half of 2002, three new employers signed on, and the new programs announced in 2001 got off the ground and have begun to produce successful homebuyers.

New Programs

In the first half of 2002, three new employers announced their commitment to launch EAH initiatives for their workers:  Advocate Bethany Hospital, located in the Garfield Park community in Chicago, Chroma Corporation in McHenry County and another McHenry County employer (to be announced at a later date).  MPC and eight non-profit housing counseling REACH partners are working with these employers to determine the targeted employees, define eligibility criteria, prepare the necessary documentation and roll out the programs to employees.

The timing from initial employer interest to the first employee successfully buying a home varies from one employer to another.  Some employers ask all employees to fill out a housing needs survey.  Others undertake internal analyses to consider targeted worker categories.  Preparation and review of documents may involve legal and finance departments.  Employers work with a REACH partner to market the initiative and “launch” it to employees.  The five employers who, in 2001, announced EAH programs are at various stages of these processes:

The City of St. Charles approved a contract with the St. Charles-based Mid-Valley Neighborhood Improvement Association (NIA) to fund counseling and program administration to encourage local employers to offer EAH programs to their workforces.  The City will help reach out to local businesses and host orientation sessions where Mid-Valley NIA will provide information about employer-assisted housing.  The City’s contract with Mid-Valley NIA includes counseling costs for local businesses, to support local companies’ investments in direct support of homeownership for their employees.  The first orientation session for area businesses occurred in August.  MPC and REACH partners have partnered with Mid-Valley NIA to help share experiences and documents and will continue to work together as the program goes forward.

Bank One, based in Chicago, committed $500,000 to providing down payment assistance to 150 employees across the country.  In Chicago, Bank One is partnering with all eight REACH partners to offer credit and homebuyer counseling to its employees throughout the region.  Bank One has set a goal of 25 new homeowners in the Chicago region as part of its pilot program.  Nationwide, 63 employees signed up for the program and 26 bought homes with the bank’s assistance (a $2,500 grant) since the program launched in the fourth quarter of 2001.  Of those, seven were in the Chicago region.  Locally, Bank One launched its partnership with REACH in June, 2002, and two employees (of the seven) qualified for the Illinois Housing Development Authority (IHDA) match, providing a total of $5,000 in down payment and closing cost assistance.  (Some employees may qualify for the Bank One assistance but not for the matching funds, which are limited to families with a household income of less than 80 percent of the region’s Area Median Income, $54,400 for a family of four. See Table 1 below.)

Northwest Community Healthcare (NCH), located in Arlington Heights, a northwest suburban community with an expensive housing market, hopes its EAH program will make it a preferred employer and will retain employees in key health care positions who could not otherwise afford to live near work.  In March 2002, the hospital hosted an informational meeting announcing the program to employees and inviting them to submit application forms.  More than 25 people attended the meeting, and a total of 28 applicants were referred to North West Housing Partnership for counseling.  To be eligible, employees have to have worked at Northwest Community Healthcare for at least a year, earn less than $75,400 and be willing to buy a home within 10 miles of the hospital.  By June 30, two hospital workers bought homes with assistance from their employer.

The Village of Riverdale announced an EAH program for municipal employees as part of its 2001 budget.  When Acme Steel, the south suburban community’s largest employer and taxpayer, filed for bankruptcy, the Village questioned its ability to fund the initiative.  However, continuing to view EAH as a priority reinvestment program which can help strengthen and stabilize the local housing market, the Village approved its 2002 budget with full funding for the EAH initiative.  The program will offer counseling and down payment assistance to encourage municipal employees to buy homes in Riverdale.  The Village is also encouraging local employers in Riverdale to set up employer-assisted housing initiatives for their workers by offering to cover some of their counseling costs. 

Sinai Health Systems in Chicago moved forward with plans to launch a program offering a financial incentive to nurses to purchase homes in the west-side Lawndale neighborhood.  Hospital officials hope the program will help them retain staff, while at the same time strengthening a neighborhood in need of reinvestment.  NHS of Lawndale, Lawndale Business and Local Development Corporation and the University of Illinois at Chicago have provided support to the hospital. 

The following chart describes the program requirements for the two initiatives that have successfully helped employees buy homes in 2002 — Northwest Community Healthcare and Bank One — as well as how they align with the requirements for the IHDA matching funds.

Table 1: Program Parameters for Operational Employer-Assisted Housing Initiatives [click here]

Regional Employer Assisted Collaboration for Housing

MPC and REACH partners work with employers to customize every employer-assisted housing initiative. REACH partners provide program administration, handle homebuyer education and help buyers through the purchase process.  REACH partners include Housing Opportunity Development Corporation (North Shore), Affordable Housing Corporation of Lake County, Joseph Corporation (based in Aurora), Corporation for Affordable Homes of McHenry County (CAHMCO), North West Housing Partnership (NWHP) in Palatine, the DuPage Homeownership Center, Neighborhood Housing Services of Chicago (NHS) and the South Suburban Housing Center. 

Employer-Assisted Housing Participating Buyers

The following table provides information about the employers that have successfully helped employees buy homes through their new EAH initiatives.

Table 2: Employer-Assisted Housing Participants [click here]  

Table 3 below further details who has participated in employer-assisted housing programs.  This table includes data on two Northwest Community Healthcare employees, two Bank One employees who were eligible and accessed the state match and one System Sensor employee. As shown in Table 1, there were an additional 25 Bank One employees who bought homes through the program not included in this chart.  All participating employees were first-time homebuyers.

 

Table 3: Employee Homebuyer Profile [click here]

State Incentives for Employer-Assisted Housing

In 2001, the State of Illinois approved new incentives for employer-assisted housing programs, raising significant interest among businesses across the region. In Aug. 2001, Gov. George Ryan signed a state donations tax credit into law.  By year’s end, IHDA and the Chicago Department of Housing had finalized the regulations to implement the new Act, issued applications and announced 2002 deadlines to access the tax credits within the State’s 2002 Fiscal Year.  Through this tax credit, participating Illinois corporations and individuals will receive a $.50 credit toward their state income tax for every $1 in cash, land or property donated for affordable housing creation, including employer-assisted housing. 

On June 20, 2002 IHDA awarded the first round of tax credits for employer-assisted housing.  Two REACH employers, Chroma Corporation in McHenry County and Northwest Community Healthcare (NCH) in Arlington Heights, were among the recipients.  Their local REACH Partners, Corporation for Affordable Homes of McHenry County and the North West Housing Partnership (respectively) submitted proposals for their employer-partners to receive tax credits toward their investment in employer-assisted housing. 

And in April 2001, IHDA approved $268,000 to stimulate private investment in employer-assisted housing in Northeastern Illinois by making available funds for down payment and closing costs to match employer commitments dollar-for-dollar and to reimburse the homebuyer education costs for successful buyers.  This initial state allocation is reserved for employers working with MPC and REACH partners in the Chicago region. 

Bank One became the first employer to access the State Matching Pool for EAH, which became available during the second quarter of 2002.

Endorsement from Mayors and Gubernatorial Candidates

MPC has worked successfully with the Metropolitan Mayors Caucus Housing Task Force to develop and adopt Housing Endorsement Criteria3 and a Housing Action Agenda.  The Housing Action Agenda includes an objective to “establish and maintain support from the private sector,” including promoting the implementation of employer-assisted housing by companies and municipalities.  Two active mayors, Zenovia Evans of Riverdale, co-chair of the housing task force, and Sue Klinkhamer of St. Charles have both moved forward with employer-assisted housing initiatives in their communities, as described above.  The U. S. Conference of Mayors has also endorsed employer-assisted housing as a tool to help working families access homeownership.  The two gubernatorial candidates addressed housing issues at MPC’s Annual Meeting in June, where Rod Blagojevich highlighted the need for “state leadership on the issue of housing,” and Jim Ryan pointed to the state’s participation “in a demonstration program to encourage employer-assisted housing. [He went on to say:] I think it’s important that we look at creative ways to encourage affordable housing [such as] using tax credits to encourage businesses that help employees to be able afford a home.”

Employers as Engaged Advocates for Broader Housing Options

REACH efforts to expand employer-assisted housing initiatives have already yielded not only new homeowners living closer to work, but also engaged advocates for affordable housing among employers.  In February of 2002, the Village of Arlington Heights and the Arlington Heights Housing Commission hosted a Summit on Affordable Housing in the northwest suburbs.  Ron Buch, a vice president with Northwest Community Healthcare, presented the hospital’s new employer-assisted housing initiative and their commitment to helping employees buy homes closer to work.  Over 150 people attended, including representatives from more than a dozen northwest communities. 

King Harris, as CEO of Pittway Corporation, championed the employer-assisted housing program at System Sensor. Now a senior executive with Chicago Metropolis 2020, he has focused on exploring housing issues in the region, summarized in Recommendations for Developing Attainable Workforce Housing in the Chicago Region, published in July by Chicago Metropolis 2020.  He provided an early presentation to the Metropolitan Mayors Caucus Housing Task Force and invited their input. He has also continued to tirelessly reach out to area corporations, encouraging them to invest in employer-assisted housing for their workforces.

Public Attention to Employer-Assisted Housing

Harris and Mayor Rita Mullins of Palatine, the other co-chair of the Mayors Caucus Housing Task Force, also participated in a roundtable televised on CLTV as part of the Chicago Matters: Inside Housing series which ran on WBEZ, CLTV, the Chicago Reporter and the Chicago Public Library in April, May and June.  This media attention to housing issues served to educate the public more broadly about housing needs throughout the region. It also provided some recognition to corporations which have begun to pay attention to housing issues.  For instance, a clip of Northwest Community Healthcare’s employer-assisted housing roll-out to employees was televised.  In addition, picking up on MPC’s Winter 2001 Regional Connection newsletter, which featured employer-assisted housing, CLTV interviewed both MPC President MarySue Barrett and new EAH partner Caroline Goldstein of Bank One.  Also included in the show was one of the first Bank One employees to secure a home through this program.  Employer-assisted housing also received coverage in the Chicago Tribune, Daily Herald, the Courier News and the Chicago Reporter .

For more information:

Samantha DeKoven , housing associate, Metropolitan Planning Council, at 312/863-6021.

MPC is deeply grateful to the following whose funding made this work possible:

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