The steep cost of living in some college and university towns can significantly dent employees’ spending power, fueling economic inequity and union strikes. This “invisible housing crisis” can also disrupt efforts to attract and retain talented faculty and staff, according to a report last year from the Consortium of Universities of the Washington Metropolitan Area.
“Simply put, wages are not keeping pace with housing costs,” reads the study, which focuses on affordable rental housing in the Washington, D.C. area. “Without sufficient preservation goals and increased production of affordable housing, the region is falling short of its housing needs.”
What if, instead of scouring for affordable rents, employees could rely on financial assistance in buying a home? Some bold colleges and universities are expanding homeownership programs to keep faculty and staff in the community.
The University of Rochester, with help from the city and four local lending institutions, announced earlier this month it will grant qualifying full- and part-time employees, residents and fellows a $20,000 forgivable loan toward their first home purchase. Created in 2017 as a $9,000 grant, the Home Ownership Incentive Program has helped 560 employees close on a home and dispersed more than $1.6 million in financial assistance, per a university press release.
“The real estate market in Rochester continues to be really competitive,” says Michelle Barrett, senior director of University Benefits at the University of Rochester. “We want to be able to provide this advantage while it’s still hot.”
The Rochester Business Journal forecasts a 7.5% rise in home prices in Greater Rochester over the next year, one of the highest price hikes across the country.
“As the region’s largest employer, we want to retain our employees and ensure they can easily live and work in the Rochester area,” Barrett says. “This program has really helped in that regard.”
Eligible employees must earn less than $135,000 in total household gross income. For the loan to be forgiven, employees must work for the university and live in their new home for five years. The percentage of the loan employees must repay if they don’t meet the time requirement decreases the closer they get to fulfilling the contract. The school will pay half of the grant, while the city and one of the participating lenders cover the remainder.
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Other exciting homeownership programs
The University of Maryland’s employee homeownership program isn’t too far behind Rochester with its glowing success story. As of February, the College Park City-University Partnership offered a 10-year, $15,000 forgivable loan to full-time faculty and staff who purchased a home in College Park. Eighty-three employees purchased a home over the past nine years and over $1.2 million in financial assistance was dispersed, according to a statement from the nonprofit.
“Like many areas across the U.S., elevated interest rates, limited supply and a competitive housing market have put pressure on prospective homebuyers,” David Varnado, senior program and operations manager of the College Park City-University Partnership, said in an email.
The average median home price in College Park is now $420,170, a 70% increase since 2014, according to the City of College Park’s Economic Development Department. Varnado says he hopes the program will also help strengthen community bonds and uplift the city’s economy.
The university’s homeownership incentive program has since expanded to all city employees working and living in College Park. Like Rochester, the citywide initiative now covers all university employees, is worth $20,000, must be used for primary residence and follows a similar timescale for repayment.
Occidental College began its very own homeownership program this summer. The Faculty Home Loan Program Fund provides tenure-track faculty with up to $150,000 through a 12-year forgivable loan for those seeking to settle within a 50-mile radius of the private Los Angeles institution. The program also extends to all tenured faculty who have yet to participate in another Occidental housing assistance program and is open to non-first-time homebuyers. Three faculty have been approved so far, said Suzy LaCroix, vice president of Institutional Advancement at Occidental College.
The University of Alabama at Birmingham just reintroduced a five-year pilot homeownership program for full-time employees who want to settle in the North Titusville neighborhood, west of campus. The Blazer Home Neighborhood Living Initiative will offer five, five-year grants of up to $15,000 with similar preconditions as Rochester, Maryland and Occidental.
School officials hope the program will help revitalize the area that borders the university. “We are excited to support employees on the path to homeownership, while also strengthening the relationship between the university and our community,” David Dada, the university’s director of government relations, said in a press release.
