Employer-Assisted Housing 2005 Year-End Report

MPC’s employer-assisted housing activities and successes in 2005.

REACH Illinois
2005 Accomplishments

In 2005, employer-assisted housing initiatives in Illinois took great strides forward, with the Metropolitan Planning Council (MPC) and its REACH partners expanding efforts in the Chicago region, and Housing Action Illinois (formerly Statewide Housing Action Coalition) and new REACH partners gearing up statewide. REACH Illinois not only supports bottom-line savings for employers investing in workforce housing, but it improves employees’ lives and helps open doors to housing solutions.

Following is a summary of the year’s successes:

• Housing America ‘s Workforce Act of 2005 was introduced into the U.S. Senate. Using Illinois ’ employer-assisted housing program as a model, the legislation provides tax credits for employer investments in EAH and grants for nonprofit housing counseling organizations. It would also treat housing as a tax-free employee benefit. This federal incentive supplements the Illinois incentives, increasing the bottom-line benefit for employers.
• The Illinois General Assembly approved a bill extending the Illinois Affordable Housing Tax Credit program for another five years, through 2011. State tax credits, which provide a $.50 credit for each $1 an employer invests in an EAH program, will continue to be available to employers that help their employees with down payment assistance, rental assistance, Individual Development Accounts (homeownership savings programs), reduced interest mortgages, and mortgage guarantees.
• The Illinois Housing Development Authority (IHDA) continued to make available matching funds (up to $5,000 per eligible buyer), to support counseling and technical assistance, and to administer the Illinois Affordable Housing Tax Credits. In 2005, IHDA matching dollar leveraged $15.50 in private support of homeownership for each IHDA matching dollar spent. This does not include additional investments made by employers who have not yet begun to take advantage of the matching funds.
• In 2005 , a total of $1,348,500 in employer dollars was provided to employees as down payment assistance through employer-assisted housing initiatives.
• The U.S. Dept. of Housing and Urban Development approved the REACH Illinois model in conjunction with Federal Housing Administration (FHA), enabling buyers to benefit from an employer’s down payment assistance along with an FHA mortgage.
• A new Small Business Consortium launched with six businesses in Chicago in partnership with the Local Employment and Economic Development (LEED) Council. This model will provide a cost-effective, hassle-free way for businesses to share the costs of counseling and technical assistance among participating employers.
• In 2005, 26 new employers signed on to offer EAH, bringing the total to 58, including employers in Peoria , Ill. , Rock Island , Ill. , and Rockford , Ill.
• With 15 employers signed on to focus on the Chicago Housing Authority mixed-income communities, there are now 23 companies supporting the CHA Plan for Transformation.
• Seven new programs launched in 2005 and are now up and running, with employees receiving financial and homebuyer counseling in preparation for new home purchases. These new EAH employers are: the City of Peoria , Mercy Hospital , Rush University Medical Center , St. James Hospital and Health Center , Swedish American Medical Foundation, the John Buck Company, and the Small Business Consortium in Chicago.
• Over the course of the year, 269 employees bought homes with assistance from their employers, bringing the total to 553 since MPC launched the EAH model in 2000. There were nearly as many successful buyers in 2005 as in the previous four years combined. Overall, more than 1200 employees have benefited from EAH since 2000, including those receiving credit counseling, homeownership education, and down payment assistance.
• In 2005, the median employee income was $41,000, median household income was $50,000, and median home purchase price was $189,000 (based on available data).
• Eight employees have already purchased homes in CHA Plan for Transformation communities, and nearly 20 others have put money down on contracts to purchase when the new homes become available.
• 15 nonprofit REACH partners across Illinois manage EAH programs for employer partners. These experienced nonprofit housing counseling organizations span the Chicago region and the rest of the state to provide services to employers wherever they are located.
• Housing Action coordinated trainings to build capacity for these housing organizations, including expertise in homeownership counseling and EAH program administration. At least 26 community-based organizations across the state benefited from these trainings.
• Improved partnerships with the Dept. of Commerce and Economic Opportunity (DCEO), the Illinois Dept. of Employment Security (IDES), Critical Access Network, public housing authorities, professional organizations, chambers of commerce, and other business associations have yielded new forms of communication to introduce the REACH Illinois model to employers throughout the state. REACH Illinois has been bundled with other state and federal economic development incentives to stimulate housing development, increase homeownership, and strengthen local businesses in rural areas. A new statewide marketing brochure is now available (it can be viewed online at http://www.reachillinois.org), and DCEO has its own EAH marketing information (Visit http://www.ildceo.net/dceo/Bureaus/Workforce_Development/Resources/).

The Metropolitan Planning Council thanks the following whose support made this work possible: the Illinois Housing Development Authority, City of Chicago Department of Housing, The Partnership for New Communities, Polk Bros. Foundation, Washington Mutual, Sara Lee Foundation, the John D. and Catherine T. MacArthur Foundation, and McCormick Tribune Foundation.