Workforce Housing

1. Workforce Housing Utah Housing Coalition September 14, 2006 Cornucopia of Workforce Housing Cornucopia of Workforce Housing

2. Workforce Housing Housing that is available in the communities where the jobs are located and affordable at local wages. Term of Art Term of Art

3. Housing Affordability in the West Housing prices consistently outpace wages, creating a housing affordability gap. Rocky Mountain states experienced a 24 � 45 percent increase in cost burden, compared to 12% nationally. Renter cost-burden decreased during the 1990s nationally � yet increased in communities throughout the west. West is going through dramatic changes. Within the constraints of changing demographics and changing economy, housing is getting more difficult to provide to lower-income households As communities grow, housing prices skyrocket without commensurate wage increase. Western wages are a fraction of national averages. A housing-income gap has emerged that undercuts communities once affordable to working families. West is going through dramatic changes. Within the constraints of changing demographics and changing economy, housing is getting more difficult to provide to lower-income households As communities grow, housing prices skyrocket without commensurate wage increase. Western wages are a fraction of national averages. A housing-income gap has emerged that undercuts communities once affordable to working families.

4. Workforce Housing Challenge How can communities remain affordable to working families as growth, changes in local and regional economies, and demographic trends create high cost, low wage economies? Workforce housing has been an issue in Park City since the early 1990s. In 1995, Park City adopted its first set of housing policies defining incentives for production and outlining a near term and long-term action plan. Since that time, the City has participated in the development and preservation of affordable housing. There are 395 units of deed restricted affordable housing in Park City. The high price of housing presents a distinct set of problems for Park City. Local employees suffer economic stress as housing prices outstrip wages and salary incomes. Employees must live in smaller residences or prolong the purchase of a home. In other instances employees move out of the area (or leave the economy all together), substituting an alternative location where housing is more affordable. Workforce housing has been an issue in Park City since the early 1990s. In 1995, Park City adopted its first set of housing policies defining incentives for production and outlining a near term and long-term action plan. Since that time, the City has participated in the development and preservation of affordable housing. There are 395 units of deed restricted affordable housing in Park City. The high price of housing presents a distinct set of problems for Park City. Local employees suffer economic stress as housing prices outstrip wages and salary incomes. Employees must live in smaller residences or prolong the purchase of a home. In other instances employees move out of the area (or leave the economy all together), substituting an alternative location where housing is more affordable.

5. Barriers Lack of down payment for a house Lack of first months� rent and/or security deposit Lack of relocation funds Lack of available/affordable rental housing in the community Lack of available/affordable single-family housing in the community An employer who decides to offer housing benefits today is likely to find that lenders and builders are interested in sharing the costs and risks of offering the benefit; that non-profit housing organizations are interested in cooperating with the employ to publicize, administer or otherwise advantage the benefit program; that federal and/or state government officials are interested in providing resource (which can reduce employer�s contributing); and the significant and generally positive media attention will accompany the introduction of the program.� An employer who decides to offer housing benefits today is likely to find that lenders and builders are interested in sharing the costs and risks of offering the benefit; that non-profit housing organizations are interested in cooperating with the employ to publicize, administer or otherwise advantage the benefit program; that federal and/or state government officials are interested in providing resource (which can reduce employer�s contributing); and the significant and generally positive media attention will accompany the introduction of the program.�

6. Housing Assessment and Affordability Analysis

7. Key Steps Economic Profile of the Community Conduct Employer Housing Surveys Conduct Employee Housing Surveys Develop Demographic Profile

8. Projected Workforce Housing Needs Projected new demand � does not take into account current needs. Projected new demand � does not take into account current needs.

9. Renter Household Needs

10. Pent up Demand for Homeownership

11. PROMOTING WORKFORCE HOUSING

12. Benefits Improve recruitment Decrease turnover and associated costs Decrease recruitment/retraining costs Improve employee morale Reduce loss of productivity and need for overtime as a result of employees covering vacancies Provide positive PR for company In a recently survey of industries in resort areas, the annual average turnover percentage was 21.4 CHFA estimates that the turnover costs for a $15 an hour job is approximately $10,000. Includes decreased productively of existing staff plus cost of temporary help, cost of staff time in the hiring process, initial decreased productivity cost for first six months to be as proficient as previous employee. The third category is the cost for the first six months of training. For a professional position earning approximately $48k pre year, the up front turnover costs are $32,000 with an additional $15,600 in training costs for a total turnover cost of $47,720 or roughly the cost of the position. This does not include any relocation assistanceIn a recently survey of industries in resort areas, the annual average turnover percentage was 21.4 CHFA estimates that the turnover costs for a $15 an hour job is approximately $10,000. Includes decreased productively of existing staff plus cost of temporary help, cost of staff time in the hiring process, initial decreased productivity cost for first six months to be as proficient as previous employee. The third category is the cost for the first six months of training. For a professional position earning approximately $48k pre year, the up front turnover costs are $32,000 with an additional $15,600 in training costs for a total turnover cost of $47,720 or roughly the cost of the position. This does not include any relocation assistance

13. Homeownership Assistance Downpayment loan that is interest free for five years Five year forgivable down payment Employer-guaranteed mortgage Trade off of an annual wage increase to obtain employer guarantees Mortgage rate buydown Group mortgage discount on closing costs Group mortgage discount on mortgage rate Assistance with closing costs Low rate mortgage with appreciation on the house shared with employer Workforce Housing is a Term of Art Reflects the challenges in providing housing for moderate income households Workforce Housing is a Term of Art Reflects the challenges in providing housing for moderate income households

14. Rental Assistance First months� rent and security deposit Master Lease/Monthly lease with employer (employer rents unit for employee)

15. Workforce Housing Programs

16. Coastal Housing Partnership of Santa Barbara Consortium of 15 public and private employees Worked out an agreement with a local ender to secure favorable financing for their employees in return for certain corporate banking relationships Employees are eligible for an 80% first mortgage at a favorable rate Lender makes a second mortgage to the employees at a rate 2 points above cost of funds plus one point. Employee has a 10% down payment

17. Stanford University Provides a second mortgage of up to 10% of the purchase price of a home as well as points with rates comparable to a ten-year treasury note Interest only loans for up to 50% of the purchase price of a home. Loans are provided at a 3.5% interest rate and do not require payment on the principal Equity gained upon resale is shared proportionately between homeowner and University.

18. North Sioux City South Dakota Master leases 20 apartments units and owns six town homes near its facility Provided to new employees and contract consultants and are completely furnished Employees reimburse the company for rent but do not have to cover deposits or utilities Goal is to reduce stress and increase productivity of new employees

19. Eagle River Water and Sanitation DistrictVail, CO ? Rental assistance program provides a two-year zero-interest loan for first, last and security deposit payment; ? Provides rental units at below market rates for up to two years in District owned units

20. Park City Municipal CorporationPark City, Utah Provides a $200/$250 per month housing allowance for FTRs within school district boundaries Provides a $10,000 second mortgage at 5% with payments deferred for first five years For city-owned property provides a second mortgage up to 17% of purchase price Owns and leases rental units to city employees at below market rates

21. What Does Workforce Housing Look Like?

22. Grand Forks, North Dakota Let�s take a quick tour of workforce housing modelsLet�s take a quick tour of workforce housing models

23. Billings, Montana

24. Missoula, Montana

25. St. George, Utah

26. Provo, Utah

27. Park City, Utah

28. City and Town Strategies

29. Community Strategies Conduct focus groups with business community to assess current and anticipated workforce housing needs. Partner with Chamber of Commerce for Employee/Employer Surveys. Create a Workforce Housing Taskforce. Conduct focus groups with lending community. Enlist assistance from the State to identify funding opportunities. Assess housing affordability gap. Develop partnerships with nonprofit and for profit housing developers to create housing that meets local needs. How interested are employees in housing assistance as compared to other benefits? Probe the barriers to employees ability to afford housing. Determine employee preferences regarding different types of housing assistance Try to uncover additional incentives that might attract employees to live nearer work How interested are employees in housing assistance as compared to other benefits? Probe the barriers to employees ability to afford housing. Determine employee preferences regarding different types of housing assistance Try to uncover additional incentives that might attract employees to live nearer work

30. Regulatory Strategies ? Include economic demand analysis of current and projected workforce needs as component of Housing Element ? Promote inclusionary programs to increase the stock of affordable housing ? Permit Accessory Dwelling Units to increase the stock of rental housing ? Encourage innovation in mixed-use design and adaptive re-use of historic buildings ? Upgrading infrastructure to encourage development ? Land assembly ? Deferral or waiver of fees

31. For More Information Phyllis McDonough Robinson 435-615-5189 probinson@parkcity.org