Recently contained within Northern California newspapers and local TV news is the story of a publicly elected official in a Silicon Valley town who is now moving because he and his family can't afford to live there any more. Rents are sky-high and buying a home there is completely out of the question, with the median price of a home hovering around a cool half million. This is a classic illustration of how housing and salaries for middle-income workers are not even on the same page with one another in some areas - a growing concern for some employers trying to attract quality employees and keep them for the long term.

A recent study by the Society for Human Resource Management revealed about 6% of company administrators now offer rental or mortgage assistance for its employees, and there is a growing trend for forgivable loans at low interest rates to help prospective employees make the decision to hire on and current ones to stick around.

Employer-assisted housing is nothing new. We can reflect back to our high school history lessons of landowners and their serf workers during medieval times. Even if the nature of the work was oppressive to these ancient workers, they were guaranteed a roof over their heads and food on the table. No such guarantee exists in parts of the country where it takes a minimum of $85,000 in family income to support a family of four.

Speaking before a gathering of real estate journalists at a recent real estate writers conference, Larry Carr, Director of Education and Workforce Preparedness for the Silicon Valley Manufacturer's Group (SVMG), offered models being created for private and public partnerships, each contributing funds towards the Housing Trust of Santa Clara County. This organization offers loans for first-time homebuyers, gap financing for home developers, and tries to find solutions to homeless housing issues as well.

In a tight labor market such as the current one, those employers trying to attract and retain quality employees have it tough enough; when you add out-of-reach housing to the equation it can become a nearly impossible situation. It stands to reason that it does no good to be able to afford a $600,000 house where public schools are quickly losing teachers because of salaries that don't meet levels of survivability for the area.

Employers nationwide may scrutinize an example of targeted solutions to problems such as this in the new alliance being formed The Santa Clara Unified School District and private and public enterprise, where teacher housing is at its center. After the SVMG approached the school district to assess excess property they owned, plans began taking shape to build affordable apartments for teachers there instead of let it remain empty. The ensuing excitement by the district's teachers is being expressed not only by the younger, newer members of the profession, but also by the tenured teachers who have had a tough time surviving on the current pay scales, forcing them into long commutes in an already gridlocked transportation corridor. The partnership, made possible through Intel Corporation, with its mortgage assistance program, S.C. Unified's investment in bonds, and recently approved public funding for $500 per month towards teacher housing expense, is geared to keep quality teachers in the fold and closer to their jobs.

Setting the criteria for affordable housing in general for the S. C. Valley is an advocacy group called the Housing Action Coalition, made up of the local homebuilders' association and the Greenbelt Alliance, reaping a 95% approval rating on the 27,000 units already built and underway. The group helps to educate local officials on the need for affordable housing and finding ways to deal with the NIMBY (not in my backyard) factor inherent in many residential areas.

There are many challenges being faced in areas such as this, with local homebuilder Patrick Constanzo, senior vice-president of Greenbriar Homes Communities, citing that the average developer fee per house runs in the $50-$60K range, and where dot-com companies have driven land values up by double and triple their former levels. The only answer seems to point to the construction of denser housing and the need for commercial office development to take place closer to housing hubs.

Finding solutions to growth, out-of-whack land and housing prices, and affordability for the average consumer are issues being dealt with in many parts of the U.S. We are in an era where a sustained, healthy economy not only provides answers, but also poses questions as it proceeds along its path. When the private sector, public support, and homebuilders all work together, it seems that what was once thought impossible can now be achieved.

Published: November 17, 2000

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A veteran of the real estate and homebuilding industries since 1986, Dena Kouremetis first joined Realty Times as a new homes writer in 1998. Since then, she has authored four books, written consumer columns on new homes issues for websites and newspapers all across the country, contributed to builder trade magazines, appeared as a guest expert on several radio shows and even created a ten-chapter podcast for LendingTree.com’s homebuilder website, iNest.com, now available on iTunes, entitled Uncharted Waters; Navigating the Purchase of a New Production Home. Kouremetis recently joined her local Folsom, CA Coldwell Banker office as a broker associate while continuing to write for the real estate industry. For the past three years, she has been training real estate agents for both the resale and new homes industries, putting her experience, research expertise and gift of expression to work to help others entering the business.