Home, Sweet Home
Last year, Catie Lasley, age 29, became the first in her family to purchase a house. Throughout her childhood, her parents had always rented apartments. While attending college, she lived in a dorm. Even after she was married, she and her husband rented an apartment.
Apartment living was their way of life, until last year when the couple had a baby girl. Lasley says they wanted their daughter to have a stable home life instead of moving from apartment to apartment. But there was one obstacle standing in their way: money. The couple didn't have enough cash for a down payment and closing costs.
Then she learned about the assisted housing program offered by her employer, the University of Kentucky in Lexington. That program helped the couple afford the house of their dreams.
"I came across this program and it looked like a real option for us," says Lasley, the university's assistant manager of employment. "It was a tremendous help to us in getting the quality of life we wanted. That's a great thing to say about this university-that it helped me purchase my home."
Affordable housing has been a hot topic among campus recruiters for many years. Sky-high prices, housing shortages, and cheaper homes in crumbling neighborhoods have been a turn-off for many job seekers and a source of frustration for recruiters. Not willing to lose top talent to competing schools, some institutions are going all out by reaching out to community partners in creative ways.
UK, for instance, formed an official town/gown partnership with the city of Lexington to build character within the downtown area and preserve old neighborhoods, explains Bart Miller, the institution's benefits manager. Its three-year-old Live Where You Work program offers a loan that's five percent of a house's purchase price-up to $15,000-to any faculty member who has a signed contract or staff member who has worked there for at least 90 days. The loans are forgiven at 20 percent each year and can also be used for renovation. But the homes must be located in designated areas close to the university, which also helps revitalize the surrounding community.
Miller says eligible employees must also complete a homeownership education program paid for by the university at discounted rates. Local counseling agencies offer a crash course on topics such as home inspections, credit maintenance, budget planning, home maintenance, and creative finance options.
So far, only five people have taken advantage of the program. But that will change over the next year as new housing developments begin to pop up in the community.
"We understood from the beginning when we introduced this program that it would be kind of slow," he says, adding that many of the area's fixer-uppers are at least 30 years old. "Many people are waiting for newer housing to become available."
Over the years, schools have assisted staff or faculty with housing in various ways. Besides offering forgivable loans for houses near campus, some reserve housing at discounted prices for moderate- to low-income families. Others offer subsidized rental housing, low-interest loans, first- and second-mortgage programs, or ground-lease options, where faculty lease the land for a nominal fee and buy the house at below-market rates.
The driving force behind such efforts has always been the need for top talent. Back in the late 1990s, for example, many Ph.D.s were actively being recruited by private employers that offered more pay and better opportunities, creating a nationwide shortage.
Like others around the country, The California State University system campuses were hit hard. Attracting the best and brightest students became increasingly difficult, recalls Bill Dickerson, executive director at the CSU, Fullerton Housing Authority.
The Southern California region is among those with the highest housing costs in the nation, he says, adding that CSU supports 23 campuses, more than 35,000 students, and 1,000 tenured faculty. "All of a sudden, faculty members who are looking at different choices and opportunities say, 'Well, I can go to Kansas on a salary of about $65,000 or $70,000 and can afford to buy a home. I can go to Southern California and I can't even begin to think about owning a home on that salary.' "
But with no land or money, creating a housing program wasn't going to be easy. Dickerson approached Conrad Sick, president and co-founder of the Valeo Companies in Lake Forest, Calif., a developer that specializes in university housing. The company leveraged the university's influence as the region's largest employer to network with nonprofit organizations and local government entities.
Valeo did the footwork. Sick's company created the overall program, set up the finance structure, invested some of its own funds as seed capital, helped Dickerson network with some government officials, and delivered housing at below-market rates.
In the end, two projects were created. The first, called University Gables, is located six miles from the Fullerton campus. The school lucked out with a bargain: It was able to purchase eight acres of surplus property from Orange County for $1 because it was going to be used for affordable housing over the next 30 years, Dickerson says.
Completed in 2002, the development has 50 single-family homes and 36 townhouses for both faculty and staff based on a ground-lease concept. A metro-link transit station is being constructed on another four acres next to the homes and will be completed early next year.
In addition, last year the school broke ground on the other project, University Heights. It will offer 42 two- and three-story townhouses, some with outdoor patios, side yards, and exterior decks.
But this development involves a unique arrangement between the university and the Elks Club. The Elks sold roughly half of its six-acre hilltop site to the school. In exchange, the university will build a $3 million, 13,000-square-foot Elks Lodge on the other three acres and make ongoing payments over a 99-year period to pay for the remainder of the land's cost and maintain the facility. Dickerson says that $100 per home will be diverted to the Elks each month, totaling approximately $50,000 a year.
Since the Fullerton campus plans on hiring between 80 and 100 faculty a year for the next five years, these projects just scratch the surface. Dickerson says that between 500 and 700 faculty and staff who are renting want to purchase a home.
"They are our primary market, [and they] have not been able to make the jump to home ownership," he says, adding that the school is currently negotiating with six different developers. "We have a need for an awful lot of homes and a lot of things are underway to try to accommodate that need."
CSU, Long Beach found itself in a similar situation. What the institution lacked in money and land, it made up for in creativity.
Within the past six months, officials there have partnered with October 5 Development, a local developer that is building a high-rise project with 400 lofts at the site of an old building that used to house the Press Telegram newspaper in downtown Long Beach, says Mo Tidemanis, director of real estate at the CSU Long Beach Foundation. They agreed to purchase 60 units at the developer's cost-which is expected to run 25 percent to 30 percent below market value-and pass those savings on to their faculty and staff.
The lofts, to be completed in 2008, range from 600 to 1,300 square feet and are less than five miles from campus. Since there's an oversupply of retail space in the downtown area, the developer is donating roughly 17,000 square feet on two different floors to the university to operate various educational programs.
Although the deal may appear one-sided, it still offers distinct advantages to the developer. Tidemanis says that having 60 presold units lowers the risk. What's more, these units are above and beyond what the firm could normally build.
The developer will get a density bonus from the city that he wouldn't get otherwise, says Tidemanis, adding that it will probably amount to two extra stories being allowed. "The city really wants to help the university tackle this [housing] problem. We play an important role in the community. The developer will be able to build more units, which makes him more money, and the university can help the developer politically get his project approved. It's a three-way win-win-win."
Since responses from faculty and staff surveys indicate a demand for up to 600 more units, and only 11 percent of the families in Long Beach can afford the median home price (about $500,000), Tidemanis is also discussing similar opportunities with three other developers. He says people moving to the area from other states "can't come close" to affording local homes.
Aside from being used as a recruitment and retention tool, housing programs offer other benefits. More students are becoming concerned about the quality of their relationships with faculty members, says Robert Simha, former director of planning and professor emeritus at MIT. Last fall, the school hired its first relocation specialist to help administer its low-interest home loan program.
When professors live miles away from campus, it's often difficult for students to develop or maintain extended relationships with them. Simha says close relationships are highly celebrated among schools and are becoming more of an issue. Likewise, science and engineering teachers who live far away from their laboratories and research groups are also at a significant disadvantage. They end up choosing between spending time with their family or colleagues, which may ultimately create friction.
"It's important to maintain a sense of community," says Simha. "In small colleges, these are very important issues because that's part of what they sell-a sense of belonging to a real community of scholars."
Despite their importance, few, if any, schools seem to track their program's return-on-investment. While ROI can partly be obtained by comparing the number of new faculty or staff contracts that include a housing benefit to those that don't, measuring the program's effect on learning, development of faculty and student relationships, and the quality of faculty, staff, and students is next to impossible. Yet, such factors all contribute to a school's reputation.
"ROI is in the eye of the beholder," Simha says. "[Housing programs] are part of the institution's infrastructure that's required to be successful and to be competitive. You have to ask yourself, 'How valuable is this part of the cost of doing business?'"
Susan Keller understands the value first-hand. As director of residential real estate at Harvard Real Estate Services, a centralized department at Harvard University, she lives and works in one of the most expensive areas in the country.
While the Cambridge, Mass., institution doesn't track the impact of housing, in-depth surveys of its nearly 15,000 faculty and graduate students are conducted annually. Year after year, Keller says, their message is the same-more housing support is needed.
Being decentralized, each school at the university independently negotiates with new hires. Still, the university owns 2,650 apartments-which are rented to full-time students, faculty, and staff-and two housing developments sold only to faculty based on a ground-lease arrangement. Observatory Commons consists of 22 townhouses while Pleasant Street Condominiums include 102 units. Both are within walking distance to the campus and are sold at a 20- to 30-percent discount.
The school's real-estate assistance program began 13 years ago. Back then, Keller says, things were so bad that administrative deans were driving around new recruits on their lunch hour. So the university began negotiating with local real-estate firms to offer employees a favorable commission rate and a referral fee after purchasing or selling a home. Coldwell Banker now heads up the program. But perhaps the best part is that it doesn't cost the university any money.
Keller believes that if administrators checked in with recruiters for perspective on key struggles, housing would more than likely top their list. "We're all grappling with the same issue," she says. "The most important thing is to set up a department to help service the people because it's terribly confusing and very hard."
Carol Patton is a Las Vegas based freelance writer.
In January, the independent college of liberal arts and sciences for women, located in Manhattan, created the school's first shared faculty-student residence hall. Called Cathedral Gardens, approximately 24 professors and their families, along with 91 students, call it home.
Floors seven through nine of the 10-story building are reserved for faculty. But others also live side-by-by-side with students on floors two through six (in some cases, even sharing a common bedroom wall). A lounge and laundry facility are on the top floor as well as access to a rooftop terrace.
Paige West, an assistant professor in the school's Department of Anthropology, lives with her family on the building's ninth floor.
"There are moments where you see [students] in the elevators and stairwells who may be in your class," says West. "It's kind of fun and different to interact with them when they're not being students and being adults."