Workforce Housing Utah Housing Coalition September 14, 2006 Workforce Housing Housing that is available in the communities where the jobs are located and affordable at local wages. 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. 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? Barriers • Lack of down payment for 90 a house 80 • Lack of first months’ rent 70 and/or security deposit 60 • Lack of relocation funds 50 East • Lack of 40 West available/affordable rental 30 North housing in the community 20 • Lack of 10 available/affordable 0 single-family housing in 1st 2nd 3rd 4th the community Qtr Qtr Qtr Qtr Housing Assessment and Affordability Analysis Key Steps • Economic Profile of the Community • Conduct Employer Housing Surveys • Conduct Employee Housing Surveys • Develop Demographic Profile Projected Workforce Housing Needs Park City Population Projection 2010 9,752 Less: Park City Population 2005 8018 Equals: Total New Residents 1,734 Locational Substitution 34% Multiplied by Total New Residents 1,734 Equals: Total New Residents Employed Locally 590 Total New Residents Employed Locally 590 Multiplied by % of jobs in Core Sectors 82% Equals: Total New Residents in Core Sectors 484 Divided By: Workers per Household 1.5 Equals: 2010 Workforce Housing Demand 323 units Renter Household Needs Total Renter Households 1,060 % of Cost Burdened Renter Household 39 percent Number of renter households paying 30 – 104 34% of income for rent Number of renter households paying 35 – 75 39% of income for rent Number of renter households paying 40 – 86 49% of income for rent Number of renter households paying 50 153 percent or more of income for rent Pent up Demand for Homeownership Renter households with incomes >$35,000 (minimum 550 households income necessary to qualify for a deed restricted homeownership.) Multiplied By: % of renters interested in 88 percent homeownership Equals: Potential pent up home ownership demand 484 households Percentage of households with incomes between 40 percent households with incomes between $35,000 - $50,000 Percentage of households with incomes between 40 percent $50,000 - $75,000 PROMOTING WORKFORCE HOUSING 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 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 Rental Assistance • First months’ rent and security deposit • Master Lease/Monthly lease with employer (employer rents unit for employee) Workforce Housing Programs 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 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. 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 Eagle River Water and Sanitation District Vail, 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 Park City Municipal Corporation Park 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 What Does Workforce Housing Look Like? Grand Forks, North Dakota Billings, Montana Missoula, Montana St. George, Utah Provo, Utah Park City, Utah City and Town Strategies 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. 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 For More Information • Phyllis McDonough Robinson • 435-615-5189 • firstname.lastname@example.org
"Utah Renters Lease Agreement"