module 2 eah as a workforce housing solution - … module 2.pdf... · slide 15 slide 16 slide 17...

EAH

EAH as a Workforce Housing SolutionModule 2

2.1Community and Political Affairs

Module 2: EAH as a Workforce Housing Solution

Module 2: Learning Outcomes

At the conclusion of this module, you should be able to:

• Defineemployer-assistedhousing;

• Discussthedifferenttypesofemployer-assistedhousingbenefits;

• IdentifythevalueofEAHtoemployers,employees,thecommu-nity and real estate agents and the team.

Thismoduleexplainswhatemployer-assistedhousingisandwhyemploy-ers,employees,thecommunityandrealestateagentsandtheirteambenefitfromemployer-assistedhousing.

What is EAH?

Employer-assistedhousingisabenefitofferedbyanemployertohelpmeetthehousingneedsofhisemployees.Ithasalsobeendescribedasavarietyofhousingbenefitsemployerscanoffertohelptheirworkforceaffordhomes.1

Employer-assistedhousingcanhelpemployeestomovebeyondthemostcommonhurdlestohomeownershipandpurchaseorrentahomeinthecommunitywheretheywork.

Employer-assistedhousinghelpsemployersachievebusinessgoalswhileatthesametimehelpingemployeesmeettheirhousingneeds.Notethephrase“helpingtheemployerachievebusinessgoals.”Thisdefinitionemphasizesthebenefitstotheemployer.

Typical Employer Benefits

Manyemployers,typicallythelargeronesandthemoresociallyconsciousones,offeravarietyofbenefitstotheiremployees.Thesebenefitsinclude:

1 Definition Source: Understanding Employer-Assisted Housing: a Guidebook for Employers. Prepared by: Homes for Working Families and the Metropolitan Planning Council.

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2.2 NATIONALASSOCIATIONOFREALTORS®

EMPLOYER-ASSISTED HOUSING

• Healthcare

• Lifeinsurance

• Retirement/401Kplans

Inadditiontothesetraditionalbenefits,manyemployersarealsoofferingmoreinnovativebenefits,suchastuitionreimbursementandeducationprograms,daycareservices,wellnessprogramsandhealthclubmember-ships.Thesebenefitscanhelptheemployercompeteforemployeesinthemarketplaceandhelpwithemployees’work-lifebalance.Employer-assistedhousingcanbeonemorebenefitthattheemployeroffers.

Employeebenefitsweatheredtheeconomicstormwithrelativelymod-estreductions.Mostemployersheldthelineoncorebenefitsand401(k)matchinginthefaceofenormousbottom-linepressure.Fortheirpart,mostemployeesmaintainedtheirbenefitsparticipationandcoverages.Thissug-geststhatbenefitscontinuetobealong-termstrategictoolforaddressingemployerbusinessobjectives,onethatcanbesustainedandeffectiveinbadtimesaswellasgood.2

Employers Who May Offer EAH

Theemployersmostlikelytoofferemployer-assistedhousingarethosewithabusinessneedorstrongsenseofcivicresponsibility.

Employerswhoareexperiencinglaborshortagesorhighturnoverratesarecandidatesforemployer-assistedhousingbenefits,asEAHbenefitsmayhelptheemployerbemorecompetitiveandencourageemployeestostaywiththeemployerlonger. EmployerswhorelocatetheiremployeesmayuseEAHtohelptheirem-ployeesfindandpurchaseahomeinthenewlocations.

Employerswhoseethemselvesassociallyresponsibleindustrytrendsettersarecandidatesforemployer-assistedhousingprograms.

2 MetLife’s 8th Annua l Study of Employee Benefits Trends, http://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/Employee-Benefits-Trends-Study.pdf



Aplace-basedemployer,suchasauniversityorhospital,withalargephysi-calinvestmentintheneighborhoodwheretheycannotpickupandrelocate,mightbeinterestedinEAHtoovercomeacommunity’sstabilityorpercep-tionofsafetyissuesbyencouragingemployeestoliveinthecommunity,investinthecommunityandbecomepartofthecommunity.

Employerswhoarelocatedincommunitieswithhighhousingcostsrelativetoincomes—forinstance,aresortcommunityorhigh-incomemunicipali-ty—maywanttohelptheiremployeesaffordahomewithinthecommunityandclosetotheworkplace.

Employerswhomayhaveemployeesnotfullyfocusedontheirworkbe-causeofforeclosurefearsmaybelookingforwaystohelptheiremployeeskeeptheirmindsontheirwork.

Finally,employerswhoarelocatedindeterioratingneighborhoodsorincommunitiesreceivingNeighborhoodStabilizationProgram(“NSP”)fundingmightbeinterestedinofferingemployer-assistedhousingtoiniti-ateorcontinuerevitalizationefforts.

I see some of my employees working real hard and I just felt that it would be a great plan, a great thing if we could help our employ-ees get further in life through housing…you will get an employee who will give you everything he or she has, and that’s dedication. It creates a tremendous bond between employer and employee, and it feels good.” - Leonard Pereira, President, Air Around the Clock, Florida

EAH Benefits to the Employer

Employer-assistedhousingbenefitscanprovideapositivereturntothecom-pany’sbottomline.EAHcanoftenbeimplementedatlittleornocosttotheemployer,andyettheemployerreapsthebenefitsofamoreproductivework-force,loweremployeeturnover,andagreaterabilitytoattractnewemployees.

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Manyemployershaverecognizedthelinkagesbetweencertainemployeebenefitsandkeybusinessobjectives,suchasincreasingproductivityandimprovingemployeeretention.

Accordingtothe8thAnnualMetLifestudyofEmployeeBenefitsTrends3, publishedin2010,employerscitethesetopobjectivesrelatedtobenefits:

• Controllinghealthandwelfarebenefitcosts—53%• Retainingemployees—47%• Increasingemployeeproductivity—42%

Also,asnotedinaComptrolleroftheCurrencyreport,someemployershavefoundthatprovidingemployer-assistedhousingbenefitshelpsthemachieveavarietyofgoals,suchasimprovingrecruitmentandretentionofemployees.4

AnEAHbenefitcanhelpretainemployeesandreduceturnoverrates,especiallyifcombinedwitharequirementthattheemployeeneedstostaywiththeemployerforacertainnumberofyears.Employeeturnovercanbeexpensive.Infact,areportbytheGreaterPhiladelphiaUrbanAffairsCoali-tionstates,“Onaverage,itcostsafirm25percentoftheposition’sannualsalaryplus25percentofthecostofbenefitstoreplaceanemployee.Oneanalysisfoundthatitcosthalfoftheemployee’sannualwage,or$12,750peremployee,tohireanewentry-levelsalesorcustomer-relationsemployeeatacallcenter.”

Thereportarguesthatanemployer-assistedhousingbenefitcanhelpanemployerreduceturnover.Itreports,“BankofAmerica’semployer-assistedhousingprogram,whichprovidesworkingfamilyemployeeswithafor-givableloanofupto$5,000fortheinitialcostsofhomeownership,hasreducedturnoverratesamongparticipatingemployeesby10percent.”5

Studieshavealsoshownthatasworkersareforcedtolivefartherfromtheirworkplace,theirproductivitydeclines.Oneexplanationcanbethat

3 MetLife’s 8th Annual Study of Employee Benefits Trends, http://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/Employee-Benefits-Trends-Study.pdf 4 Individual Development Accounts: An Asset Building Product for Lower-Income Consumers, http://www.occ.treas.gov/news-issuances/news-releases/2005/nr-occ-2005-25a.pdf 5 Connecting Working Families to Economic Opportunities in the Philadelphia Region: The Role of Employers” - http://www.community-wealth.org/_pdfs/articles-publications/state-assets/paper-treuhaft.pdf

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employeeshavelongerdrivesand,withgreaterregionaltrafficcongestion,spendmoretimestuckintraffic;thismakesthemmorelikelytoarriveatworklateaswellastiredandfrustrated.

Employer-assistedhousingcanalsoincreaseproductivitythroughimprovedmorale,anenhancedemployeework-lifebalanceanddecreasedabsentee-ism.Furthermore,homebuyerandhomeownershipeducation,whichmanyemployersofferasanextendedEAHbenefit,canhelpaddressthestresssomeemployeesmaybefacingwithconcernsaboutlosingtheirhomes.

ImplementinganEAHbenefitcanhelpemployersbuildvaluewithintheirorganizationsandenhancetheirreputations.

The Prescription for Homeownership program has been great for the company and our employees. When an employee purchases a home, they want to work harder and strive for a promotion so that they maintain that home. - Steve Wing, Director of Government Programs, CVS

In 2001, we began to think about home ownership for our em-ployees and how we could assist them…We provide the employee with a $2,500 loan that is forgiven after three years of continuous employment. What better way to build loyalty and pride, than to create an avenue for home ownership? - Advance Food Company

OfferinganEAHbenefitmayprovideformoreemployeestoworkinthecommunitiesinwhichtheylive.Thereby,theymaybetterknowthecustom-erstheyserve.Forexample,CVSoffersanEAHbenefitsothatmoreoftheiremployeescanliveincommunitieswheretheirstoresarelocated.Ac-cordingly,theiremployeesknowsomeoftheircustomersastheymayalsobe their neighbors.

Employer-assistedhousingbenefitscanalsogeneratepositivepublicityfortheemployerandcreategoodwillinacommunity.Employer-assistedhousingcanhelpsetacompanyapartinthecommunityandinthemindsof customers.



Employersthatofferemployer-assistedhousingareseenastrendsettersandsociallyresponsibleorganizations.Thiscanhelpmakethemattractiveplacestowork.

Employersareincreasinglyseeingaconnectionbetweenthehealthofacommunityinwhichtheyarelocatedandthestrengthoftheirbusiness.Fortheseemployers,employer-assistedhousingbenefitscanbeusedaspartofaprogramtostabilizeandrevitalizeneighborhoodsclosetotheworkplace.Astabilized,safeneighborhoodisparticularlyimportantforemployerswhorelyoncustomerandclientaccesstotheirbusiness.Asnotedabove,hospi-talsanduniversities,withmajorphysicalinvestmentsinacommunityarelikelytobeveryinterestedinthequalityofthesurroundingneighborhood.

Employersthatofferinnovativebenefitsbuildloyaltyfromtheirwork-force.Thisloyaltytranslatesintoreducedturnoverexpensesandin-creasedproductivity.

Aurora Health Care EAH Case Study

Aurora Health Care, a healthcare provider that operates 13 hospitals in the Milwaukee area, responded to recruiting and retention challenges by creating an EAH program, in partnership with the nonprofit Select Milwaukee, to help their employees purchase homes in the city of Milwaukee. Aurora found that while 70 percent of employees stay with the organization for less than 10 years, EAH participants have an average length of service of 14.7 years with the organization. EAH participants also had significantly lower turnover rates than non-participat-ing employees. In 2007, the turnover rate for all Aurora em-ployees was 11.8% while the turnover rates for employees who participated in the EAH benefit program was 4.8%.6

EAH Benefits to Employees

Employer-assistedhousingbenefitstheemployeesaswell.EAHcanhelpem-ployeesovercomesomeofthehomeownershipbarrierspreviouslydiscussed.

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6 “Quantifying the Value Proposition of Employer-Assisted Housing: A Case Study of Aurora Health Care”, http://www.nhc.org/media/documents/Quantifying_EAH.pdf.



First,theemployeesoftenreceivehomebuyerandhomeownershipeduca-tion,includingfinancialliteracyandforeclosurepreventioneducation,aswellascounselingservicesaspartofanemployer-assistedhousingbenefit.Thisprovidesthemtheknowledgeandconfidencetopurchaseahome,preparesthemtopurchaseandmaintainahome,andenablesthemtotakethestepsnecessarytoavoidforeclosure.

Additionally,manyemployer-assistedhousingbenefitsofferfinancialassistancetotheemployeethatcanhelpclosethefinancinggaponahomepurchase.

Everyone should take advantage of the housing benefit. Once I completed the application, my benefit coordinator helped me apply for other funds and walked me through the whole process. Advance Food Company is very generous to offer this benefit. Without it, I would not have been able to purchase my home. - Advance Food Company employee

Inmanyinstances,employer-assistedhousingbenefitsaredesignedtoallowtheemployeetoliveinthecommunityinwhichtheywork.Thisallowsemployeestospendlesstimecommutingandmoretimeathomewiththeirfamilies,thusenhancingtheirqualityoflife.

Finally,employeeswhopurchasehomeshavetheopportunityforequityappreciationastheirhomevalueincreases.

And,asnotedinanNARreport,homeownershipbooststheeducationalperformanceofchildren,induceshigherparticipationincivicandvolun-teeringactivity,improveshealthcareoutcomes,lowerscrimerates,andlessenswelfaredependency.

Inadditiontotangiblefinancialbenefits,homeownershipbringssubstantialsocialbenefitsforfamilies,communities,andthecountryasawhole.Be-causeofthesesocietalbenefits,policymakershavepromotedhomeowner-shipthroughanumberofchannels.HomeownershiphasbeenanessentialelementoftheAmericanDreamfordecadesandcontinuessoeventoday.7

7 Social Benefits of Homeownership and Stable Housing http://www.realtor.org/wps/wcm/connect/ca3a708048be35b9b1e2ff0c8bc1f2ed/Social+Benefits+of+Stable+Housing.pdf?MOD=AJPERES&CACHEID=ca3a708048be35b9b1e2ff0c8bc1f2ed



EAH Benefits to the Community

Communitiescanalsobenefitwhenemployersofferemployer-assistedhousing.

First,employer-assistedhousingoftenallowsworkerstoliveandworkinthesamecommunity.Peoplewholiveandworkinthesamelocationtendtobecomeinvestedinthecommunityandbecomemoreactiveincivicandvol-unteeractivities.Additionally,employeeslivingandworkingnearbyequalslesstrafficcongestionandlessairpollution.

Second,employer-assistedhousingbenefitsallowcriticalworkersandemer-gencyresponders,suchaspolice,fireandmedicalpersonnel,topurchasehomesinthecommunitieswheretheywork.Theydonothavetotravelgreatdistancestorespondtoanemergency.

Finally,ascommunitiesarerevitalized,thebaseofthecommunitycanbestabilized,sothepopulationandcommunitytaxbasewillincrease.Employ-eeswillspendmoreoftheirmoneyinthelocalcommunity,supportinglocalmerchantsandfurtheraddingtotheeconomicvitalityofthecommunity.

Community Revitalization Case Study

The aforementioned Greater Philadelphia Urban Affairs Co-alition Policy Link report presents some strong data on the community benefits from the University of Philadelphia’s efforts to revitalize West Philadelphia using EAH and other programs. These efforts helped revitalize the housing market and the com-munity. Housing prices increased from $78,500 to $175,000 between 1996 and 2002. Community benefits included 25 new retail stores, an 86 percent increase in foot traffic on local streets, a 40 percent reduction in crime, and 200 new jobs for local residents.

“The interdependence between businesses, workers, and communi-ties positions employers as key partners when it comes to advancing policies and programs to alleviate the barriers to working families’ economic success.”8

8 Policy Link: Greater Philadelphia Urban Affairs Coalition – Connecting Working Families to Economic Opportunities in the Philadelphia Region: The Role of Employers).

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EAH Benefits to the Real Estate Professional and Team

Therearealsobenefitsfromemployer-assistedhousingtoarealestateprofessionalandhisteam.Thebenefitsincludeanexpandedclientandcustomerbase,anewsourceofreferrals,increasednamerecognitionandapositiveimageandincreasedvisibilityinacommunity.

Participationonanemployer-assistedhousingteammayalsohelpthenon-profitreachouttothepopulationitservesandbeasourceofreferralsforthenonprofitorganization’sotherservices.

Theremaybeanaddedbenefitforthelendertobepartoftheteam.TheCommunityReinvestmentAct(CRA)isdesignedtoencouragecom-mercialbanksandsavingsassociationstomeettheneedsofborrowersinallsegmentsoftheircommunities,includinglow-andmoderate-incomeneighborhoods,typicallydefinedasatorbelow80percentofareamedianincome.Alender'sparticipationonateammayhelpitmeetitsCRAgoals,especiallywhentheemployees'incomesarewithintheCRAincomerange.

“UnderstandingEmployer-AssistedMortgagePrograms:APrimerforNationalBanks”(http://www.occ.gov/static/community-affairs/insights/2007-88a.pdf )discussesthisandotherbenefitsforabankin-volvedinmakingmortgagesforborrowersparticipatinginemployer-assistedhousingbenefitprograms.Italsolooksathowbankscanofferloanproductstocomplementemployer-assistedhomepurchaseprogramanddiscusseshowtheseprogramscanbeofferedintheconventionalsecondarymortgage market.

ArealestateagentcanuseanEAHprogramasasourceofcredibility.Throughtheirpartnershipswiththeteam,therealestateagentcanshowacommitmenttopreservingandrevitalizingthecommunity,andashavinganinterestinthewelfareofthecommunity’sworkforce.

Employer-assistedhousingshouldbeviewedasalong-termbusinessstrat-egyforarealestateagent.Developinganexpertiseinemployer-assistedhousingandcallinguponemployerstoimplementthebenefitrequiresan

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initialtimecommitmentonthepartoftheagent.Oncetherealestateagenthasestablishedanemployer-assistedhousingbenefitwithanemployer,theagenthascreatedalong-termsourceofclients.

Atatypicalemployer,onlyabout10percentofemployeesuseanemployer-assistedhousingbenefitatanyonetime.However,asexistingemployeesturnoverandarereplacedbynewemployees,andindividualfinancialandfamilysituationschangeovertime,theemployeewhodoesnotusethebenefitthisyear,mayuseitnextyear.

Inmanycases,thetransactionprocessstartslongbeforeaconsumerpicksupthephonetocallarealestateprofessional.Thechallengeistostayintouchwithclientstocementarelationshipwithatruebuyer.Tobecomeatrustedadvisor,arealestateagentneedstobeatthecenterofanyconversa-tionaboutrealestatewellbeforetheconsumerbuysahome.Thismeansbuildingenduringrelationshipsthatstartbeforeasaleandcontinuebeyondclosing —inotherwords,makingsurethatthetransactionneverends.

Participatinginanemployer-assistedhousingbenefitplancanhelpyoubuildthistypeofrelationshipwithclients.Byperiodicallyconductinghomebuyerandhomeownershipclassesfortheemployer,therealestateagentandteamhavetheopportunityforregularintroductionstonewclients and customers.

Employer-assistedhousingbenefitstakesometimetodevelop,butthereisalong-termpayoff.



Module 2 Summary

Module2begantofocusonemployer-assistedhousing.Thismoduleincluded:

• Adefinitionofemployer-assistedhousing(EAH);

• Adiscussionofthetypesofemployerslikelytobeinterestedinemployer-assistedhousing;

• AsummaryofthebenefitsofEAHto:

• Theemployer

• Theemployee

• Therealestateprofessionalandteam

• Thecommunity.

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