Employer-assisted housing programs

Overview

Employer-assisted housing (EAH) programs provide a channel through which employers can help their employees with the cost of owning or renting a home, typically in neighborhoods close to the workplace. Assistance may be provided in a variety of ways, including through down payment grants or loans that are forgiven over a period of employment, homeownership counseling and education, and rental subsidies. Localities may also partner with employers to invest directly in the construction of new housing options for a specific workforce, or engage employers in the process of creating a housing plan.

In addition to offering their own EAH programs for public-sector employees, cities, towns and counties can provide incentives to encourage private-sector employers to initiate their own programs. For example, localities can provide a dollar-for-dollar match for employer contributions to EAH programs. Localities (either directly or by funding a nonprofit) can also offer administrative assistance to employers interested in adopting an EAH program; this can range from help designing the program all the way to managing it on behalf of the company.

To the extent this support stimulates additional employer participation in EAH programs, it helps to increase available funding for affordable housing. Participating companies also benefit from improved recruitment in high-cost areas and higher rates of employee retention.¹ EAH programs can also be used to help promote community stabilization and redevelopment – for example, by encouraging an influx of new residents in neighborhoods that may have experienced disinvestment.

EAH programs are likely to be most feasible in communities that have one or more large employers with a moderate-income workforce. This section describes some of the ways that local jurisdictions can support EAH programs.

Approach

Cities, towns, and counties that are interested in EAH will first need to determine whether they wish to: (a) provide direct assistance to public employees, (b) support EAH programs offered by private employers, or both.

Direct assistance to public employees can be provided in a variety of ways, but is most commonly focused on helping public employees secure affordable housing close to their place of employment. For local jurisdictions, this may mean providing down payment or closing cost assistance to purchase a home within city or county limits. In high-cost cities and counties, this assistance may be extended to include help with a security deposit or first- and last-month’s rent. Assistance is commonly structured as a grant or loan that is forgiven over time, as long as the recipient remains employed by the city. Other approaches include rent subsidies, temporary interest rate buydowns, loan guarantees that help employees to qualify for financing, and matched savings accounts with uses limited to homebuying activities.²

Alternatively, or additionally, cities, towns, and counties can provide incentives or other support to encourage private employers to offer EAH programs to their employees. This supporting role may entail providing monetary incentives, such as matching the funds an employer provides for an EAH program, or offering the employer a credit against property taxes. Another approach to supporting private EAH programs is to fund a nonprofit that handles some or all of the administrative functions associated with offering an EAH program, such as providing the homebuyer education and counseling that are required components of many EAH programs or administering rental subsidies to employees. By centralizing these functions, the barrier to participation by employers is substantially reduced, increasing participation. Localities may also provide financial or land contributions to facilitate the development of new housing for employees.

Eligibility

Many cities, towns, and counties that offer EAH programs for public employees design programs that are limited to particular occupations – typically those for which the city is trying to attract and/or retain employees and where proximity to the workplace is important. For example, many localities offer EAH programs for first responders or for teachers. Employees in these occupations perform critical functions, but may not be paid enough to purchase their own home or, in some high-cost cities, afford the typical rent. Assistance is often contingent on a commitment to continue working for the jurisdiction for a designated period (e.g., 2-5 years). In some cases, applicants must have been employed by the city for a specified number of months or years and be in good standing, in order to apply.

Communities may also choose to adopt other, more general eligibility requirements that are not linked to employment status. These can include maximum income thresholds, first-time homebuyer status, and requirements to use the home as a primary residence.

Localities that offer support for private EAH programs must also decide which private programs are eligible. For example, city or county programs that offer to match companies’ contributions to employees’ housing may limit eligibility to companies whose contributions exceed a specified minimum (e.g., $1,000 per employee). Local governments that provide administrative support may require an enrollment threshold per company—for example, at least 50 employee participants.

Feasibility

In cities where employer-assisted housing is a relatively new or novel strategy, a robust outreach campaign may be needed to recruit private firms. While research suggests that benefits accrue to employers who implement EAH programs – for example, through cost savings resulting from greater employee satisfaction and retention – it will take time to realize these benefits. In addition, EAH programs require a significant expansion of typical benefits packages. Securing the approvals to make this expansion and making the appropriate adjustments to administrative procedures can be a time-consuming process – although local jurisdictions that offer implementation assistance can help to address this challenge. Local jurisdictions may wish to share examples of companies that have successfully created an EAH program, or even partner with a local Chamber of Commerce or other business association to host sessions introducing the concept to large employers.

EAH programs can be powerful tools when combined with other community revitalization programs in distressed localities. Smaller localities, particularly those with anchor employers such as universities and hospitals, may benefit from connecting EAH programs with other comprehensive planning strategies to improve transportation and mobility.

Examples

The Live Near Your Work program is a partnership between the City of Baltimore, MD, and participating local companies. The city matches employer contributions of at least $1,000 per employee, up to $2,500 (for a combined total of $5,000 in assistance for the employee), to be applied towards a down payment and/or closing costs. Buyers are required to contribute at least $1,000 towards the purchase of the home, and must be first-time homebuyers in the City of Baltimore who will use the property as their primary residence. Participating employers may establish additional program restrictions, including limiting the neighborhoods in which assistance may be used. More information is available on the city website.

The City of Rochester, NY, has a similar Employer Assisted Housing Initiative which matches employer contributions between $1,000 and $10,000 toward closing costs for homes offered on the private market. Employees must meet eligibility requirements, including being a first-time homebuyer in Rochester, contributing $1,500 of their own funds, and living in the property for at least five years.

New York, NY’s Department of Education provides housing support for certified mathematics, science, and special education teachers who commit to working in high-need schools for a three-year period. To be eligible, teachers must be fully certified and have taught for two years (either currently or earlier in their career). Those selected for assistance receive an initial payment of $5,000 for housing-related expenses including relocation costs, down payment on a mortgage, or initial rental fees (broker’s fee, security deposit, etc.) as well as an additional stipend of $400/month for the first two years, for a total of $15,000. Resignation or retirement during the commitment period triggers a requirement to pay back a portion of the $5,000 upfront payment, determined by the number of years remaining on the contract. More information is available on the program website.

The Metropolitan Planning Council (MPC), a nonprofit organization serving the Chicago, IL area, has helped to support Employer-Assisted Housing since 2001 by matching employers in the region with nonprofit housing counselors who can provide homeownership counseling and financial assistance to their employees. MPC also provides guidance that makes it easier for private companies to set up their EAH programs, including assistance establishing employee eligibility criteria and assistance amounts. More information is available on the Employer Assisted Housing webpage.

In cities in Illinois, employers looking to build housing for employees can leverage the Illinois Affordable Housing Tax Credit. All units in the employer-assisted housing development must be reserved for employees whose adjusted income is equal to or less than 120% AMI. Employers qualifying for the program will receive a one-time tax credit equivalent to 50% of the value of their investment in the development.

The San Francisco, CA Unified School District opened Shirley Chisholm Village, a $105 million, 135-unit affordable housing development built on district-owned land, with rents affordable to households earning 30–100 percent of area median income and priority given to SFUSD educators and staff. The nonprofit MidPen Housing developed the project in coordination with the San Francisco Mayor’s Office of Housing and Community Development; the district has more affordable housing projects underway using this joint development model.

In Hot Springs, SD, Fall River Health Services, a nonprofit medical center facing a staffing shortage tied to a lack of local housing, is contributing $2.3 million toward the infrastructure cost of Cascade Hills, a planned 48-unit subdivision near its campus. The City of Hot Springs approved a $2.3 million tax increment financing district to help fund the project, and the South Dakota Housing Development Authority added a $1.2 million infrastructure grant expected to lower lot prices by about $30,000 each. Hospital employees who buy in the development may have up to $54,000 in lot costs forgiven if they stay employed for five years.

Tompkins County, NY, the City of Ithaca, NY, and Cornell University jointly established the Community Housing Development Fund (CHDF) in 2009. Each year, the county and city each contribute $100,000 to the fund, and Cornell contributes $200,000. Two additional towns have since joined as associate members. Through 2025, roughly $8.5 million in CHDF awards have helped finance 1,032 income-restricted units and leveraged at least $347 million in outside funding, or about $41 for every $1 awarded by CHDF, as detailed in a case study by the Housing Solutions Lab.

Related resources

Program design

• Effective Employer-Assisted Housing Programs, National Housing Conference (April 2017) – This policy guide provides an overview of strategies for how communities can leverage employers’ support for affordable housing in a variety of capacities.
• Employer-Assisted Housing Resource Guide: A Primer for Employers and Community Leaders, Greater Minnesota Housing Fund (2014) – While geared toward local communities in Minnesota, this report provides information likely to be of interest to a general audience, including various strategies that can be used to help employees obtain affordable housing and an overview of the roles, resources, and benefits of the local government and other sectors.
• Employer-Assisted Housing Guidebook, Metropolitan Planning Council and Neighborhood Housing Services of Chicago, IL (2007) – With over two decades of experience supporting EAH programs in Illinois, the Metropolitan Planning Council published a guidebook for employers, including step-by-step instructions and case studies from around the country.

Implementation

• The Affordable Housing Crisis in Los Angeles: An Employer Perspective, LA Business Council Institute (March 2017) – This report describes how housing costs impact employee recruitment and retention, and decisions to maintain operations in the LA region, based in part on a survey of major employers in the region. The report also includes case studies of employers that provide some form of housing-related assistance and lessons learned from these efforts.
• Employer-Assisted Housing Initiative Guide for State & Local Realtor Associations, National Association of Realtors – While oriented towards real estate professionals, this suite of resources includes materials likely to be useful to state and local governments, including a series of short case studies of state and local EAH programs and fact sheet describing how state and local governments can encourage EAH.
• Employer-Assisted Housing Toolkit (March 2023), National Housing Conference – This comprehensive NHC toolkit provides successful case studies, implementation strategies, and overviews of benefits, challenges, and policy options for a community looking to start an EAH program.