Employer-Assisted Housing: A Proven Strategy for “Housing a Competitive Workforce”

1. Employer-Assisted Housing: A Proven Strategy for “Housing a Competitive Workforce” American Planning Association October 14, 2008

2. Who is the Metropolitan Planning Council? • Founded in 1934 • 60 member, business-based board • 24 professional staff • Partnership with hundreds of public officials, business leaders, community-based organizations and other stakeholders a nonprofit, nonpartisan group of business and civic leaders committed to serving the public interest through development, promotion and implementation of sound planning and policies so all residents have access to opportunity and a good quality of life, the building blocks of a globally competitive greater Chicago region Metropolitan Planning Council Page 2

3. Housing and Growth Facts (informing workforce housing strategy in Illinois)

4. 2000 Wake-Up Call: Rental Housing is NOT Safe Back-up Plan Supply of housing that is affordable not located in high job growth areas Metropolitan Planning Council Page 4

5. Negative public perceptions of “affordable housing” 1300 different municipalities, statewide, each responsible for housing policy “in their own backyard” Lack of community support, state leadership “Non-economic” barriers identified in 2000 Metropolitan Planning Council Page 5

7. Why is housing an employer’s issue? Cannot afford to buy or rent Can afford to rent, not buy Can afford to buy or rent Metropolitan Planning Council Page 7

8. The Update: Local Workforce Housing Market Realities Just 13% of the local housing stock is affordable to workers earning less than $50,000 – workers that account for more than two-thirds (69%) of the 5-community area workforce. Affordability Gap Many workers in our communities cannot afford to live near work because prices are too high and incomes too low. Availability Gap There is a shortage of homes affordable to the workers in our communities. By 2030, an additional 4,800 rentals and 10,000 for-sale opportunities will be needed for households earning < $75k. Metropolitan Planning Council Page 8

9. The Implications for Businesses Excessive housing costs for employees • lead to higher turnover rates • make it difficult to recruit new talent • reduce worker productivity • produce costly traffic and congestion • reduce investment in and connection to communities Metropolitan Planning Council Page 9

10. Jobs-Housing Mismatch Problem Metro Chicago jobs and population have grown faster -- and in separate locations than -- the supply of workforce housing. Issue Workforce problems result from this Jobs-Housing Mismatch. Solution Employer-Assisted Housing (EAH) – Maximizes employee retention by promoting live near work and providing outsourced, easy-to-administer HR benefit. Metropolitan Planning Council Page 10

11. Today’sWake-Up Call: The Mortgage Market Meltdown • But foreclosure rate among EAH employees is almost 0%. • EAH is a proven foreclosure prevention strategy, thanks to homebuyer education and homebuyer assistance. • Private sector leadership and dollars are more important than ever. • Discussions and pilot initiatives are now exploring EAH as a strategy for re-appropriating neighborhoods that have been devastated by foreclosures. • . Metropolitan Planning Council Page 11

12. Catalysts for Change

13. REACH model (Regional Employer-Assisted Collaboration for Housing) • Counseling/ homeownership education • Down payment assistance • Rental assistance • Small Business Consortium • Matched savings for homeownership (IDA) • Below market rate loans for purchase or home improvement • Forgivable loans based upon tenure • Marketing Catalyst for Change 1: Employer-Assisted Housing Menu of Options for Employer Engagement Help Employees Access Existing Homes Metropolitan Planning Council Page 13

14. Loan pool investments • Land donations • Land bank • Rental property development/investments • For-sale and rental housing development • Provide below market loans to developers of workforce housing • Advocacy Catalyst for Change 1: Employer-Assisted Housing Menu of Options for Employer Engagement: Help Create New Homes for Employees Metropolitan Planning Council Page 14

15. System Sensor: An Illinois EAH Pioneer • Employer Leadership • Piloted REACH model, contracting with local housing expert to provide homebuyer education, credit counseling to employees • Employees received up to $5000 in down payment assistance Results • Company saved $100,000 annually in reduced turnover and absenteeism, after recouping costs • Over 60 System Sensor employees purchased homes near work • Pittway Corporation sold the System Sensor Plant to Honeywell, which opted to continue the successful program Leading the trend • Program inspired new incentives now available State-wide • Over 70 other employers have launched programs, assisting over 1,500 employees to purchase homes in Illinois. - Mr. Harris continued to be among the most persuasive advocates for workforce housing policy and production. King Harris, formerly of System Sensor, utilized the REACH model and became a strong advocate of Employer-Assisted Housing in the business community after experiencing the many benefits of offering housing assistance to his employees. Metropolitan Planning Council Page 15

16. Riverdale, Illinois: Three Employers offer Rental Assistance Employer Solution • Village of Riverdale, Robinson Engineering, and St. James Health Systems will expand their existing REACH programs to offer $50 per month per employee for rental assistance up to 24 months when homes are completed • Employers will also match employee savings for home ownership Results • Federal tax credits (LIHTC) secured to assist in mixed-income development by the Developer—4 companies benefit (including Developer) • Employers obtain EAH tax credits for investment The Connection • EAH renters will also have first opportunity to buy in Phase II • These 3 employers also offer down payment assistance through the traditional REACH model Troubled Pacesetter Development Rendering of new construction mixed-income homes, first phase expected to be completed in 2008 Metropolitan Planning Council Page 16

17. Charter One Bank: Investment in New Initiatives "Our Employer-Assisted Housing program has given us an edge in attracting and retaining talented people.  Over 140 Charter One employees have benefited from this program, enabling them to purchase homes in the Chicagoland area, including homes in redeveloping communities.  This important investment in our colleagues exemplifies our continued commitment to the communities in which we live and work”. - Scott C. Swanson. President and CEO, Charter One Bank • Employer Objectives • Attract and retain talented workforce • Offer competitive benefit • Educate employees about bank’s loan programs Employer Solution • The bank has provided down payment assistance to 140+ employees since launching their program in 2004 From the Company into the Community • Experiencing the benefits of offering EAH to their valuable employees was the beginning of the story • Charter One Bank then decided to take its level of commitment to the next level by sponsoring the Charter One Workforce Housing Initiative to create new homeowners through new employers joining the cause Metropolitan Planning Council Page 17

18. University of Chicago and University of Chicago Hospitals: Investment in Loan Pool • Employer Objectives • Preserve existing housing stock for households under 60% AMI who rent in the community • Stabilize surrounding community • Offer alternative resources to sub-prime lending market Employer Solution • In 2006, made $1 million investment in Community Investment Corporation’s loan pool for rental housing preservation and rehabilitation • Target to preserve affordable housing in the five community areas surrounding the University’s Campus How it all started • Employer launched traditional REACH program in 2003 with $7,500 down payment assistance for University employees (with help of local housing expert) and has assisted nearly 150 new homebuyers within targeted areas around the campus which was founded in 1985, is the only broad-based coalition working to promote affordable housing opportunities throughout Illinois." Metropolitan Planning Council Page 18

19. Loyola University: Promoting walkability and public transit • Down payment assistance: $5,000-$10,000 • Homebuyer education • Up to 25 buyers per year • Promote walk-to-work/community revitalization • Encourage live-near-transit Metropolitan Planning Council Page 19

20. Employer-assisted housing (EAH) is a cost effective, easy to administer way for employers to help their employees buy or rent homes close to work. In Illinois, the Metropolitan Planning Council, Housing Action Illinois and more than a dozen counseling agencies --in conjunction with the State -- make up REACH IL (Regional Employer Assisted Collaboration for Housing). See www.reachillinois.org for more info. State incentives, including tax credits and matching funds, are available to employers and employees who work with REACH IL partners. REACH IL makes it easy and financially compelling for employers to offer EAH programs to their employees, by • Tailoring a model program for each employer • Providing homeownership education, financial counseling  and leveraging additional resources • Managing the down payment or rental assistance provided by employers As a result of the 70+ Illinois programs launched since 2000: • More than 1,500 employees have bought homes • Over 2,500 employees have received counseling/education Metropolitan Planning Council Page 20

21. These are some of the companies that have launched EAH programs. • Advocate Bethany Hospital • Allstate Corporation • Chase Bank • Charter One Bank • Chicago Public Schools • Chicago Police and Fire Depts • City of Evanston • City of North Chicago • City of Peoria • City of Rock Island • City of St. Charles • DeLaSalle Institute • Honeywell’s System Sensor • Illinois College of Optometry • Illinois Institute of Technology • Lake Forest College • Loyola University • MB Real Estate Services • Medela Corporation • Mercy Hospital and Medical Center • Metropolitan Planning Council • Robinson Engineering • Rock Island School District • Rosenthal Brothers • Rush University Medical Center • Seaquist Perfect • St. James Hospital • Swedish Covenant Hospital • The John Buck Company • The Walsh Group • University of Chicago/Hospitals • Village of Riverdale Metropolitan Planning Council Page 21

22. Understanding Employer-Assisted Housing: A Guidebook for Employers KEY TOPICS • What is Employer-Assisted Housing? • Far-Reaching Benefits of EAH • How to Create and Administer a Program • FEATURED CASE STUDIES • American Family Life Assurance Co., Inc. , GA • Applied Materials, Inc., CA • Citizens Financial Group, Inc., RI • CVS/Caremark, DC • Harley-Davidson Motor Company, WI • Hatch & Parent, A Law Corporation, CA • Northrop Grumman Corp., NY and MS • The Schwan Food Company, MN • System Sensor, IL • University of Chicago and University of Chicago Medical Center, IL Metropolitan Planning Council Page 22

23. EAH is a win for everyone. Why Employer-Assisted Housing? • EAH benefits . . . • The EMPLOYEE • The EMPLOYER • The COMMUNITY • The HOUSING POLICY ARENA Metropolitan Planning Council Page 23

24. Catalyst for Change 2: The Toolbox Developed by and for Mayors • Metropolitan Mayors Caucus Housing Task Force • Housing Endorsement Criteria • Housing Action Agenda • Welcome Home: Housing Our Community 12-minute housing video and cable TV segment • Homes for a Changing Region • Model Housing Plan • Sensible Tools for Healthy Communities • Planning 1-2-3 • Housing 1-2-3 • Home Grown” best practices • Emerging “Inter-jurisdictional Strategies Metropolitan Planning Council Page 24

25. Catalysts for Change 3: Alignment of Advocates’ Voice • Legislative Agenda • Communications Strategies • www.housingillinois.org • On-the-ground networks • (Technical Assistance and Community Acceptance Strategies) Metropolitan Planning Council Page 25

26. Resulting Statewide Activity

27. First Ever State Housing Policy Developed Prioritizing underserved populations Promoting affordability & choice Creating & preserving affordable and workforce housing Supporting state & local leaders in advancing housing solutions Coordinating state departments to better link housing, economic and transportation development. Implementing administrative and legislative changes - demonstrating that “this is real” This Plan has been updated and published annually, with semi-annual progress reports released along the way State leaders responded to business, municipal and community voices Metropolitan Planning Council Page 27

28. IL Housing Legislation since Implementation of EAH, Statewide Housing Policy • 2002 Illinois Affordable Housing Tax Credit • 2002 Local Planning Technical Assistance • 2003 Housing Opportunity Tax Incentive • 2004 Federally Subsidized Housing Preservation • 2004 Affordable Housing Planning and Appeals • 2005 Extension of IL Affordable Hsg Tax Credit • 2005 Rental Housing Support • 2005 Regional Planning Act • 2006 Comprehensive Housing and Planning • 2006 Business Location Efficiency • 2007: Good Housing Good Schools • 2008: Line item for Housing in State’s Capital Bill Metropolitan Planning Council Page 28

29. National Opportunity: Please Support Housing America’s Workforce Act • SB 1078 in the Senate/ HR 1850 in the House • Offers $.50 federal tax credit on every $1 employer invests • Benefits nonprofit employers with transferable credit • Provides $5 million/year for counseling agencies, structured as receding grants – to encourage counseling experts to gradually replace federal dollars with employer contracts • Introduces a change in the tax code so that the money received by employees from their employers for EAH is non-taxable • Reframes the national housing dialogue at a time when private sector investment is especially critical Metropolitan Planning Council Page 29

30. Additional Federal Opportunities on the Horizon • Perhaps the only silver lining to today’s housing market meltdown -- including the foreclosure crisis -- is that housing affordability is a top of mind issue. • The price of gas, climate change and the prospects of a new administration in DC further point toward stronger live near work and affordable workforce housing polices • What can we do with the next transportation, climate and tax bills in DC? • www.t4america.org and Brookings Institution’s Blueprint for American Prosperity are among the thought leaders offering promising suggestions. Metropolitan Planning Council Page 30

31. For more information on “Housing for a Competitive Workforce: A Campaign Strategy,” please visit: www.metroplanning.org or www.reachillinois.org or Phone: 312/863-6007