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Employer-Assisted Housing: A Proven Strategy for Housing a Competitive Workforce American Planning Association October 14, 2008

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a nonprofit, nonpartisan group of business and civic leaders committed to serving the public interest through development, promotion and implementation of sound planning and policies so all residents have access to opportunity and a good quality of life, the building blocks of a globally competitive greater Chicago region Founded in 1934 60 member, business-based board 24 professional staff Partnership with hundreds of public officials, business leaders, community- based organizations and other stakeholders Who is the Metropolitan Planning Council? Metropolitan Planning CouncilPage 2

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Housing and Growth Facts (informing workforce housing strategy in Illinois)

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2000 Wake-Up Call: Rental Housing is NOT Safe Back-up Plan Metropolitan Planning CouncilPage 4 Supply of housing that is affordable not located in high job growth areas

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Negative public perceptions of affordable housing 1300 different municipalities, statewide, each responsible for housing policy in their own backyard Lack of community support, state leadership Non-economic barriers identified in 2000 Metropolitan Planning CouncilPage 5

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Why is housing an employers issue? Metropolitan Planning CouncilPage 7 Approx. Average Home Price Annual Wage Needed to Buy Approx. Average Month Rent Annual Wage Needed to RentAll Jobs Financial ManagerChemist Child, Family, and School Social Worker Chemist Married to Financial Manager City (County) Northbrook (Cook)$620,911$187,345$1,442.83$57,676$33,653$93,664$55,529$39,302$149,193 Deerfield (Lake)$521,555$157,367$1,474.17$58,923$34,524$89,769$50,328$29,698$140,007 Highland Park (Lake)$766,651$231,318$1,164.11$46,527$34,524$89,769$50,328$29,698$140,007 Highwood (Lake)$598,265$180,512$922.37$36,856$34,524$89,769$50,328$29,698$140,007 Lake Forest (Lake)$1,055,187$318,350$1,398.06$55,866$34,524$89,769$50,328$29,698$140,007 Cannot afford to buy or rent Can afford to rent, not buy Can afford to buy or rent

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The Update: Local Workforce Housing Market Realities Metropolitan Planning CouncilPage 8 Affordability Gap Many workers in our communities cannot afford to live near work because prices are too high and incomes too low. Availability Gap There is a shortage of homes affordable to the workers in our communities. Just 13% of the local housing stock is affordable to workers earning less than $50,000 workers that account for more than two-thirds (69%) of the 5-community area workforce. By 2030, an additional 4,800 rentals and 10,000 for-sale opportunities will be needed for households earning < $75k.

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Excessive housing costs for employees lead to higher turnover rates make it difficult to recruit new talent reduce worker productivity produce costly traffic and congestion reduce investment in and connection to communities The Implications for Businesses Metropolitan Planning CouncilPage 9

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Problem Metro Chicago jobs and population have grown faster -- and in separate locations than -- the supply of workforce housing. Issue Workforce problems result from this Jobs-Housing Mismatch. Solution Employer-Assisted Housing (EAH) Maximizes employee retention by promoting live near work and providing outsourced, easy-to- administer HR benefit. Jobs-Housing Mismatch Metropolitan Planning Council Page 10

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But foreclosure rate among EAH employees is almost 0%. EAH is a proven foreclosure prevention strategy, thanks to homebuyer education and homebuyer assistance. Private sector leadership and dollars are more important than ever. Discussions and pilot initiatives are now exploring EAH as a strategy for re-appropriating neighborhoods that have been devastated by foreclosures.. TodaysWake-Up Call: The Mortgage Market Meltdown Metropolitan Planning CouncilPage 11

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Catalysts for Change

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Metropolitan Planning CouncilPage 13 Catalyst for Change 1: Employer-Assisted Housing REACH model (Regional Employer-Assisted Collaboration for Housing) Counseling/ homeownership education Down payment assistance Rental assistance Small Business Consortium Matched savings for homeownership (IDA) Below market rate loans for purchase or home improvement Forgivable loans based upon tenure Marketing Menu of Options for Employer Engagement Help Employees Access Existing Homes

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Metropolitan Planning CouncilPage 14 Catalyst for Change 1: Employer-Assisted Housing Loan pool investments Land donations Land bank Rental property development/investments For-sale and rental housing development Provide below market loans to developers of workforce housing Advocacy Menu of Options for Employer Engagement: Help Create New Homes for Employees

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System Sensor: An Illinois EAH Pioneer Metropolitan Planning CouncilPage 15 Employer Leadership Piloted REACH model, contracting with local housing expert to provide homebuyer education, credit counseling to employees Employees received up to $5000 in down payment assistance Results Company saved $100,000 annually in reduced turnover and absenteeism, after recouping costs Over 60 System Sensor employees purchased homes near work Pittway Corporation sold the System Sensor Plant to Honeywell, which opted to continue the successful program Leading the trend Program inspired new incentives now available State-wide Over 70 other employers have launched programs, assisting over 1,500 employees to purchase homes in Illinois. - Mr. Harris continued to be among the most persuasive advocates for workforce housing policy and production. King Harris, formerly of System Sensor, utilized the REACH model and became a strong advocate of Employer-Assisted Housing in the business community after experiencing the many benefits of offering housing assistance to his employees.

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Riverdale, Illinois: Three Employers offer Rental Assistance Metropolitan Planning CouncilPage 16 Employer Solution Village of Riverdale, Robinson Engineering, and St. James Health Systems will expand their existing REACH programs to offer $50 per month per employee for rental assistance up to 24 months when homes are completed Employers will also match employee savings for home ownership Results Federal tax credits (LIHTC) secured to assist in mixed- income development by the Developer4 companies benefit (including Developer) Employers obtain EAH tax credits for investment The Connection EAH renters will also have first opportunity to buy in Phase II These 3 employers also offer down payment assistance through the traditional REACH model Rendering of new construction mixed- income homes, first phase expected to be completed in 2008 Troubled Pacesetter Development

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Charter One Bank: Investment in New Initiatives Metropolitan Planning CouncilPage 17 Employer Objectives Attract and retain talented workforce Offer competitive benefit Educate employees about banks loan programs Employer Solution The bank has provided down payment assistance to 140+ employees since launching their program in 2004 From the Company into the Community Experiencing the benefits of offering EAH to their valuable employees was the beginning of the story Charter One Bank then decided to take its level of commitment to the next level by sponsoring the Charter One Workforce Housing Initiative to create new homeowners through new employers joining the cause "Our Employer-Assisted Housing program has given us an edge in attracting and retaining talented people. Over 140 Charter One employees have benefited from this program, enabling them to purchase homes in the Chicagoland area, including homes in redeveloping communities. This important investment in our colleagues exemplifies our continued commitment to the communities in which we live and work. - Scott C. Swanson. President and CEO, Charter One Bank

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