Workforce Housing

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Workforce Housing

• Utah League of Cities and Towns
• September 14, 2006

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Workforce Housing

• Housing that is available in the communities
  where the jobs are located and affordable at
  local wages.

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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.

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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?

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

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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

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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

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Rental Assistance

• First months rent and security deposit
• Master Lease/Monthly lease with employer
  (employer rents unit for employee)

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• Workforce
• Housing
• Programs

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Coastal Housing Partnership of Santa Barbara

• Consortium of 15 public and private employers
• Worked out an agreement with a local lender 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

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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.

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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

13
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

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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

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What Does Workforce Housing Look Like?
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Grand Forks, North Dakota
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Billings, Montana
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Missoula, Montana
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St. George, Utah
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Provo, Utah
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Park City, Utah
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City and Town Strategies
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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.

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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

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For More Information

• Phyllis McDonough Robinson
• 435-615-5189
• probinson_at_parkcity.org