Employers
Invest in their Employees' Housing
By Cindy Teasdale
With national
unemployment at an all-time low and head-hunters and career-oriented
Web sites luring skilled workers to the ultimate job destination,
companies are doing everything they can think of to attract and
retain employees. From stock options and incentive programs to
company parties in exotic locations, today's employee is reaping
the benefits of an incredibly tight job market.
One
of the hottest trends in the benefit biz is just starting to crop
up in some St. Louis companies and organizations: employer assisted
housing programs, or EAHPs. From educational and health institutions
to high-tech start-ups, employers are finding the return on their
initial investment towards an employee's home purchase is almost
immeasurable.
Fannie
Mae serves as a sort of program manager for employers who've instituted
the programs across the country and here in St. Louis. "We're
finding that companies are using these programs in essentially
three ways," says Clifton Berry, a director at Fannie Mae who
runs the St. Louis Partnership Office, the body that oversees
the EAHPs: "as a recruitment tool, as a retention tool, or as
a way to positively impact a community that is important to them."
While
employees are granted greater buying power and receive assistance
with their down payments, generally regarded as the most daunting
aspect of the home-buying process, employers are discovering greater
stability in the work force, greater ability to attract new labor,
and higher employee satisfaction rates. And, perhaps the most
exciting prospect, through these programs employers can directly
enhance the neighborhoods surrounding them by creating geographic
limitations, and can contribute actively to revitalizing depressed
areas of the city and improving St. Louis as a whole.
The
way that most programs work is through a five year, forgivable
loan that is theoretically paid off (or forgiven) at 20 percent
each year. The loan, usually between $4,000 and $5,000, can go
toward closing costs or towards the down payment, therefore increasing
employees' buying power and making them more likely to qualify
for a loan. The employee is then encouraged to stay in the house
and with the company for at least five years.
"The
programs offer tremendous benefits to metropolitan areas like
St. Louis that have experienced a population and revenue depression,"
Berry says. "EAHPs promote home ownership in the city and in general,
improve the housing market and bring new dollars to neighborhoods
that may at present be 'fringe areas.'"
And in terms
of return on investment, Berry says Fannie Mae's research indicates
that EAHPs work to the companies' advantage as well. "When we've
looked at specific companies' pay scales and hiring and training
costs for new employees, it's easy for us to prove, through programs
that have worked at other companies, that they will see a definite
positive impact on their net bottom line."
So what
St. Louis employers have caught on? The oldest EAHP in this region
was started in 1996 by Washington University, in conjunction with
the Medical Center and BJC. Since then, Unity Health has started
a program
based in the neighborhood around Alexian Brothers Hospital on
South Broadway, and even smaller businesses have begun installing
their own programs.
Concordia
Publishing House, in South City, founded Operation HOME (Home
Ownership Made Easy) in May of last year and has targeted Marine
Villa and Gravois Park as the qualifying neighborhoods, bounded
by Lynch, I-55, Keokuk and Grand. "We really wanted to promote
the neighborhood and city living," says Don Kampmeinert, vice
president of operations, "and also felt that employees would really
take advantage. Of course the money is a huge incentive, but we
believe that quality of life, by owning your own place and being
able to walk to work for example, could really be enhanced as
well," Kampmeinert says. "And we've been in this neighborhood
for more than 130 years; over that time we've taken a great interest
in the economic success of the area."
Above: Neighborhoods
like Forest Park Southeast offer rich architectural heritage at
affordable prices, especially with the boost of employer-assisted
housing programs.
Washington
University's program is presently the most far-reaching, and the
tangible benefits of creating EAHPs can already be seen in their
designated neighborhoods, Skinker-Debalivere and Forest Park Southeast,
both of which are adjacent to the University campuses.
Brian
Phillips, the community revitalization manager for the University's
Redevelopment Corporation, oversees all transactions within the
program. "The University realized that it was in everyone's best
interest to make a long-term commitment to help stabilize and
revitalize neighborhoods that were essential to the continued
success of the University and Medical Center," Phillips says.
In
1996 Washington University was one of five educational institutions
to receive a five-year grant from HUD to assist in neighborhood
revitalization efforts (the other institutions included Yale in
New Haven, Conn., Clarke in Worcester, Mass., UCBerkeley,
and UIChicago). Those funds were matched by the University
and Hospital, the city and other interested parties, totaling
an infusion of over $11 million into the two neighborhoods.
"We've
completed 95 percent of the objectives stated in our original
grant proposal," Phillips says, "but are confident that the end
result will be even more successful than our original hopes."
McCormack
Baron & Associates, Inc. has taken a lead role in the redevelopment
efforts, as has Pyramid Construction, Inc. Through their union
with the University, in the coming months in the Forest Park Southeast
Neighborhood (a 45-block area bounded by Kingshighway, Vandeventer,
Highway 40 and the Missouri Pacific railroad tracks) construction
will begin on a $4 million community center and on the refurbishment
and reopening of the Adams School, which will operate as a public
elementary school but will be driven by neighborhood residents.
Phillips
says the revised and updated plan for Forest Park Southeast also
includes the construction of a senior assisted-living complex,
construction of 100 new homes a year, the coordination of improved
human and social services and the resurgence of business ventures
on the "Main Street" Manchester stretch. "The employer
assisted housing
program has played a vital role in boosting the redevelopment
of this neighborhood, and can and will be looked at as a template
for other employers who take a stake in their communities and
in the city of St. Louis," Phillips says.
Even the
Archdiocese of St. Louis has begun using a similar home-buying
incentive program to entice parishioners to move to the city and
to improve neighborhoods in need. Three parishes bordering Tower
Grove Park in South St. Louis have instituted a "Catholic Homesteading"
initiative that puts a $5,000 five-year forgivable loan towards
the down payment of a house within the parishes' limits. Homebuyers
must be Catholics who have not lived within city limits within
90 days, and they must make a commitment to be active in the parish.
"We're
basically preaching the gospel of city living, re-seeding the
city if you will," says Father Ken Brown, pastor of St. Margaret
of Scotland, one of the three parishes taking part in the program
(the others are Holy Family and Pious the Fifth). "We want to
remain in the city, and draw people to a community that we believe
is vibrant and welcoming; the home-buying program is a great way
to get people who wouldn't necessarily move to the city to at
least consider it."
You
don't have to be a giant like the Catholic Church or Washington
University to institute such programs, as Habañero Computing
Solutions, Inc., an on-line service and Internet company also
based in South St. Louis on Grand and Arsenal, is proving. Habañero
is just getting their EAHP, "Habañero Habitat," underway.
"There
are so many good opportunities to buy in the city and this is
such a great way to attract and retain great employees and improve
the local community at the same time," says Grant Weber, Habañero's
founder and chief technology strategist. Habeñero presently
employs around 40 people, and Weber hopes that many of them will
take advantage of the program. "Long term, it's just amazing what
benefits I think we'll all see from programs like this; everyone
from the lowest employee on the totem pole to the entire City
of St. Louis."
Cindy Teasdale is a St. Louis-based free-lance writer.
|
