Mayor Richard M. Daley honored the University for the success of its Employer Assisted Housing (EAH) Program in a May 15 event.
With 165 home closings and over 450 counseling sessions to boast, the University of Chicago and University of Chicago Hospitals possess the highest number of home closings of any employer in the state of Illinois .
Designed both to provide families the opportunity to live in the communities in which they work and to strengthen the neighborhoods surrounding the University, this program was also featured as a national model for EAH programs in the recent Homes for Working Families publication "Understanding Employer-Assisted Housing: A Guidebook for Employers."
Launched in May 2003 to promote homeownership and investment in targeted redeveloping neighborhoods surrounding the University, this EAH program provides homebuyer assistance in the form of interest-free forgivable loans, as well as credit and homebuyer counseling services.
Of the 165 families who have closed on their homes through the University’s EAHP, only one has faced foreclosure – a fact that speaks volumes about the stability of these loans and the strength of this program.
At a breakfast ceremony on May 15, business leaders from across the city convened to celebrate the accomplishments of the University and learn about methods of implementing similar programs at their respective institutions.
Through the investment of employees who have purchased homes in the community, the University’s EAH program has contributed to the revitalization of the Kenwood, Oakwood Shores, Hyde Park and Woodlawn communities.
“Employer Assisted Housing has allowed us to make a meaningful investment in our employees, and in the communities where they live, work and play,” said Michelle Olson, Director of Community and Civic Affairs.
Eligible employees receive an interest-free $7,500 loan toward down payment and closing costs when they purchase a home within the program’s target areas. The assistance is forgiven over five years provided the employee resides in the house as a primary home, continues to be employed by the University or Medical Center, and participates in homeownership counseling. In addition, an employee must contribute 3 percent of the purchase price of the home toward the down payment.
The program encourages employees to buy homes in neighborhoods in transition by allowing a higher income cap (up to $106,000 for a family of three) and purchase price limits, as well as allowing repeat buyers to receive the assistance. First-time homebuyers with lower incomes (capped at $87,000 for a three person household) are eligible to purchase in either zone.
“Employer Assisted Housing is one more way that we can continue working together for a better Chicago. It helps give residents the stake of homeownership in our city, it helps promote mixed-income communities that enhance the lives of our residents and it helps the participating companies prosper,” Mayor Richard M. Daley said at this morning’s ceremony.
The Metropolitan Planning Council of Chicago designed the University’s program, assisted with its initial implementation and remains involved as a technical adviser. Neighborhood Housing Services of Chicago provides educational workshops as well as one-on-one homeownership counseling, and helps package financial assistance for home purchases.
The success of the EAH program led the University in 2006 to invest $1 million in a nonprofit loan fund to preserve rental housing. These funds are available as low-interest loans for rental property owners to rehabilitate buildings in the EAH program’s target areas.
Across the country, the cost of purchasing a home continues to exceed what most working families can afford, with one in seven households paying in excess of 50 percent of their income on home costs. Housing costs (including shelter, utilities and energy, and household operations), which represent the single largest household expense, increased 23.1 percent between 2000 and 2005. In contrast, the median household income nationwide increased only 10.2 percent during those same five years.
Chicago serves as no exception to this rule. According to the Guidebook published by Homes for Working Families, the median home price in Chicago is currently $278,500. While the income necessary to purchase a median priced home is $80,389, the average salary of a nurse in the Chicago area is roughly half that amount – making evident the ever widening gap between income and home affordability.
EAH programs meet the needs of employees and companies alike. The programs increase staff satisfaction while simultaneously improving an employer’s bottom line. Higher morale leads to greater productivity, reducing turnover and expenses associated with recruitment and training.
In addition to boosting employee morale, broader benefits of implementing these programs typically include safer neighborhoods, increased investment in the local area and community stabilization.