A front-page article in the Fall 2005 newsletter of Illinois’ Metropolitan Planning Council (MPC) calls attention to a swiftly growing movement among civic leaders, organizations and workers that affects employee benefits packages. In the article, Syed Quadri, an employee of St. Charles, IL-based smoke detector manufacturer System Sensor, praises the merits of the employer-assisted housing (EAH) program he enjoys through a cooperative effort between System Sensor and MPC.
As a System Sensor employee of more than five years, Quadri recently fulfilled his retention commitment to his employer that was a condition of the $5,000 forgivable loan he received to help him buy a house for his family of six. Quadri now lives so close to his employer, he can walk to work when it’s warm. It’s a win-win situation for System Sensor, too: By offering EAH to eligible employees, System Sensor improves its recruitment package for potential hires and experiences greater retention and morale for participating employees.
System Sensor was the first employer in Illinois to offer EAH in 1999. King Harris, president and CEO of Pittway, the parent of System Sensor at the time, understood the need. “Members of a typical working family with a moderate income too often find it impossible to live close to their jobs,” he said. “As a result, our highways are more crowded, families have less time together and employers lose money due to turnover of workers.” Since then, Harris has worked tirelessly to promote affordable housing for low-income families and others in need of affordable housing.
Today 58 employers in Illinois offer some form of EAH, according to MPC Housing Consultant Samantha DeKoven. EAH refers to a variety of ways employers assist their workers with housing. Often, a live-near-work requirement gets workers closer to their workplace, reducing stressful commutes. In some cases, the employer’s assistance leverages state or local dollars, boosting the employee’s home purchasing power.
For information on implementing an EAH program in your workplace, including a list of agencies that can provide assistance, visit our Tool Kits page.
The EAH movement is so strong in Illinois – a state largely recognized as the national leader in EAH programs – that 26 employers jumped on the EAH bandwagon in 2005. This has translated to more than $1.3 million in employer dollars that were provided to employees in 2005 as down payment assistance toward buying or renting a home near their employer. DeKoven, for one, is not surprised by the spike in participating employers statewide in the past year. “EAH programs help employers combat turnover challenges as well as absenteeism and tardiness,” she says.
Besides helping to curb turnover and absenteeism, EAH programs reap other positive rewards for participating employers. In Illinois, the state’s Affordable Housing Tax Credit reduces an employer’s net cost of implementing EAH programs significantly: 50 percent of the employer’s investment comes back through the tax credit. In addition, investment in the program is federally tax deductible.
As EAH programs are used by more employers, and as those employers report increased productivity, the inherent benefits for both the public and private sectors have garnered the government’s attention. Kathy Ryg, 59th District representative for the state of Illinois, was excited to report that on June 28, 2006, Governor Rod Blagojevich signed into law the Business Location Efficiency Incentive Act. Pioneered by Ryg as the “Location Matters” program, the legislation provides incentives for businesses to assist their employees with both housing and transportation options. For instance, employees who stay at their company for five years can qualify for a home down payment of up to $15,000.
DeKoven is quick to point out that MPC didn’t invent EAH – in fact, the group looked to similar programs that existed in other states when it began researching employee barriers to home ownership in Illinois. One resource that emerged was California’s Silicon Valley Leadership Group (SVLG). The group offers first-time home buyer training for its 200 member businesses. There is also a bill in the California Senate that would provide state funds to assist with employees’ home purchases.
Other states are enacting programmatic approaches to EAH that derive financial support from employers and municipalities rather than the state. In Maryland, a “Live Near Your Work” program serves as a good recruitment tool for the city of Baltimore’s employees. And on the federal level, a bill that’s in both the House of Representatives and the Senate shows promise: the Housing America’s Workforce Act.
With EAH assistance at the federal level pending and state and local involvement growing but intermittent, what can an employer do to find out more about EAH programs? DeKoven says that MPC, while located in Illinois, is now available to offer technical assistance to employers across the country. That’s good news for organizations looking to decrease turnover and make their benefits packages more enticing for job applicants. “EAH is appealing to progressive, enlightened business owners who recognize that investing in housing solutions for their workers makes good business sense and can save them money,” DeKoven says.
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