Employers and their workers would receive tax breaks under a bill introduced in the Senate last week to promote employer-assisted housing, a fringe benefit many experts believe could become as important as healthcare and paid holidays.

Under the "Housing America's Workforce Act," companies which help eligible employees buy homes would receive a tax credit of 50 cents for every dollar they provide, up to $10,000 or 6 percent of the purchase price, whichever is less. If the employee is renting, the employer would get a credit of 50 cents for every dollar in rental assistance, up to a maximum of $2,000.

In addition, to ensure that works receive the full value of their companies' contributions, the act defines housing assistance as a non-taxable benefit similar to health, dental and life insurance.

Consequently, recipients of the aid would be allowed to exclude any funds they receive as taxable income on their federal tax returns.

The legislation also would establish a three-year program of competitive grants to be awarded by the Department of Housing and Urban Development to nonprofit housing organizations or local governments that provide technical assistance, program administration, and outreach support to employers undertaking EAH initiatives.

The bill was introduced by Senators Hillary Rodman Clinton, D-N.Y., Gordon Smith, R-Ore., and Mel Martinez, R-Fla., in an effort to alleviate the nationwide shortage of so-called "workforce" housing. A companion bill was offered in the House by Rep. Nydia Velázquez (D-NY).

Applauding the measure, Conrad Egan, of the National Housing Conference, called the bill an "essential piece of legislation" that offers an innovative local solution for increasing affordable housing opportunities.

Salt Lake City broker Al Mansell, president of the National Association of Realtors, which started an assistance program for its own employees in 2003, also praised the bill, saying it would allow workers to "receive the full value" of the assistance they get from their employers and encourages more companies to offer a helping hand.

While EAH programs come in all shapes and sizes, the most common benefits are direct grants, forgivable loans that need not be paid back, deferred loans that must be repaid but not immediately, matched savings, interest rate buy-downs, shared appreciation and home-buyer education classes.

An EAH plan can be easily customized to meet the unique needs and circumstances of an employer's overall recruitment, retention, benefits, and community strategies, according to Fannie Mae, a major source of funds for mortgages which has provided free assistance to several hundred employers which currently offer EAH benefits to their employees.

Employees who receive a housing benefit from their employers generally get help with at least one of the three primary obstacles to homeownership: down payment, closing costs or information about completing the home-buying process. Employers generally provide funds to the employee, which are used for a portion of the down payment, closing costs or a permanent interest rate buy-down on the employee's first mortgage.

Fannie Mae says the costs of providing and administering EAH plans are minimized or offset by the savings accrued from reductions in turnover, recruitment/relocation and training budgets, and from higher productivity and morale. Administration costs of EAH plans differ according to plan specifics, but for an average company of 4,000 employees, plan administration for a forgivable loan requires one-half of one employee's time.

The proposed law directly addresses the problems many companies face in attracting and retaining employees because of the lack of affordable housing. EAH programs are usually a ''win-win-win'' situation, said Egan of the National Housing Conference:

• Employers benefit from a stable workforce that is often the result of living near work. This reduction in recruitment ultimately results in financial savings for the company.

• Employees are able to enjoy the extra time provided by living closer to work, time that could have been spent in traffic, but instead is spent with family and friends.

• Communities gain from increased investment and reduced congestion because families and individuals who may have just been passing through are able to live closer to where they work.

Published: July 6, 2005

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.