Welcoming home college faculty

Working on a campus near the coast with sunny, 70-degree weather year-round is an appealing prospect to many people.

It’s also why real estate in Southern California is among the most expensive in the nation—placing housing there out of the reach for academics seeking a first or new teaching opportunity.

This reality motivated the University of San Diego to offer housing assistance to new faculty. The institution owns 25 units near campus—including condos and single-family homes—that are rented to incoming faculty for up to two years as they settle into the community. Occupancy is 100 percent.

Sidebar: Faculty housing programs at various colleges and universities

“For a school our size, I think our inventory is pretty sufficient,” says MaryAnne Kremicki, the institution’s budget director, adding that the program is well received by the faculty.

Nationwide, the scope of faculty and staff housing programs varies as much as campus locations do. Options for colleges and universities can range from renting out on-campus condos or off-campus single-family homes to providing supplemental home loan assistance.

Getting settled

Providing a reasonably priced place to live on or near campus—or helping new faculty find a home—can be an attractive benefit when it comes to recruiting.

“We run into sticker shock all the time—Southern California real estate is extremely nuts,” says University of San Diego real estate manager Mary Timm, who manages the rental properties and a home-buying assistance initiative. An annual rental survey ensures the university’s units are in line with the local market.

In helping new faculty transition into the area, officials at the institution don’t want to overcharge, but they also don’t want to create a false sense of local housing prices. The university does not supplement local rent, as some institutions do.

Approximately $100,000 is budgeted annually toward the maintenance of rental units, which comes out of the rental income received on the units.  

Timm works with 10 to 12 incoming faculty in any given year, although not all end up in university rentals. Faculty with children, for example, sometimes prefer neighborhoods in certain school districts.

Timm shares floor plans and pictures of available units, accompanies faculty on walk-throughs, and refers those who need different accommodations to relocation specialists. As a native San Diegan, she serves as a go-to resource for all things local.

“I like being able to share that knowledge with new faculty when they’re trying to find a place to live,” Timm says. “I can help them get an idea about where they would be most comfortable.”

Relieving rural barriers

Institutions in less populated areas face some of the same issues when it comes to faculty housing—but scarcity, rather than affordability, is the main hurdle.

Finding a place to live within a 40-minute drive of Middlebury College in Vermont, for example, is especially challenging for faculty and staff new to the area.

The institution owns 75 rental units—a mix of apartments and single-family houses—that it leases exclusively to employees, at a range of prices. All tenants sign year-to-year leases on the units, with a limit of six years, or one year after the faculty member gets tenure, whichever is less.

The units average 95 percent occupancy, says Matt Curran, Middlebury’s director of business services.

He oversees the faculty and staff housing program and is assisted by an operations manager who handles day-to-day tasks (including general maintenance, payroll deductions for rent, and tenant communication).

“For these faculty and staff members, you’re their landlord in addition to being their employer, so it’s an interesting dynamic,” says Curran. For example, he cites the proximity of some units to student housing that can raise issues about noise complaints.

Incoming Middlebury faculty and staff enter a lottery in which they rank available rentals by preference. Curran and his assistant try to match units with applicants, but draw names from a hat if more than one person is interested in the same property.

All applicants will end up with housing, and if they want a different unit, they can apply to move in March.

Supporting buyers and renters

A number of institutions help new faculty buy homes. The residential purchase plan at Princeton, for example, helps eligible faculty and staff purchase homes near campus at a fair-market price directly from the university.

The program is managed by Princeton’s Housing and Real Estate Services office and comprises 160 properties bought and sold exclusively among the institution’s faculty and staff.

Columbia University, located in New York City, offers the Provost’s Housing Assistance Program to help eligible faculty purchase or rent a property within commuting distance of the institution.

The program includes an income supplement (including $40,000 for a down payment or $22,000 annually for housing costs); a forgivable 10-year loan program in which the principal and interest is forgiven in equal annual installments; and a second-mortgage program.

Middlebury College also has a second-mortgage program to help faculty and staff buy their first home in the area. The resident is responsible for securing a first mortgage on the house in the Middlebury area, usually for 50 percent of the value.

The college then works with the faculty member to secure another mortgage of up to $150,000 or the amount of the first mortgage (whichever is less), and offer that at an annual interest rate of 2 percentage points less than their first mortgage.

Applicants must be approved by the institution and a local bank before signing a 25-year note and having payments deducted via payroll automatically.

Curran estimates about 20 to 40 current employees have taken advantage of the program.

University of San Diego faculty can borrow 15 percent, at a competitive loan rate, toward the down payment of a median-price home through the Faculty Home Buying Assistance Program. They can choose their own lender but must put 5 percent down.

The university has earmarked $1 million toward the program, which covers the annual debt forgiveness, interest rate subsidies and the closing cost allotment. Faculty often use the program to move on from university rental housing. Since its start in 2011, the program has assisted approximately 60 employees.

Building inventory

When it comes to acquiring housing units, many colleges and universities look to buy local homes and nearby apartment complexes or condos.

Purchasing existing homes can be more cost-effective than starting from scratch. But dealing with real estate taxes—which often constitute a large percentage of operating costs for a faculty housing project—can be a challenge.

Depending on the state, high taxes can be avoided by building on university property, driving down rents and possibly providing more revenue.

Institutions should always conduct a market study before breaking ground, says Jeffrey Resetco, vice president of real estate development for EdR, a national developer of collegiate housing.

“The most critical aspect of starting a building project is knowing the people you want to house—knowing what their needs and desire are—ahead of time,” says Resetco.

Campus leaders should determine factors such as how many faculty and staff have spouses and children, how many have cars or ride bikes, or what amenities—such as grocery stores—are necessary, Resetco says.

Most faculty prefer to be among their peers and away from undergraduates, while those with families desire outdoor spaces such as playgrounds or community gardens.

Faculty leadership should also be consulted regarding unit types, floor plans and price points. Financial constraints can be accommodated with smaller units.

Another factor to consider when developing faculty housing on campus is parking.

Parking construction costs can vary from $4,000 per space for a surface lot to $25,000 per space in an underground garage.

Putting out the welcome mat

Offering housing to faculty and staff is not always necessary. Colleges in areas with an abundance of fairly priced, easily accessible housing do not need such programs.

For institutional leaders considering a faculty housing program, however, sound policy and procedures should be in place before starting, says Curran of Middlebury. He recommends being flexible, too, as there are different circumstances for each individual.

“It’s a great service that we provide to our faculty and staff that is much needed in our area,” says Curran. 

Ray Bendici is special projects editor of UB.