Select Milwaukee and Employer-Assisted Housing

The positive effects of homeownership on households and communities have long made homeownership a priority for many housing professionals. Recognizing the potential benefits that homeownership has on the stability, morale, and productivity in the workplace, employers across the country have worked to build Employer Assisted Housing (EAH) programs and assist families who are striving for homeownership.

In 1992, Wisconsin Electric Power Company approached Select Milwaukee - a non-profit organization in Milwaukee dedicated to encouraging and supporting home buying in the City of Milwaukee - to develop and administer a program that would help its employees become homebuyers.

Select Milwaukee stepped up to the challenge and assisted Wisconsin Electric to build the first EAH program in the city. Today, Select Milwaukee handles the counseling for and administration of EAH programs for thirteen employers in Milwaukee. Together, the organizations have recorded a total of 282 home sales between January 2000 and October 2002 and an estimated 250 homebuyers are currently in the pipeline.

How the Program Works

While each of the thirteen EAH programs supported by Select Milwaukee is slightly different, all have the same general characteristics to promote homeownership among employees.

Eleven of the thirteen companies with EAH programs in Milwaukee provide a financial incentive to homeownership in the form of a zero percent interest, three to five year forgivable loan in amounts ranging from $1,000 to $5,000. One organization offers financial incentives in the form of grants.

While each company provides varying degrees of financial assistance, they have all have retained Select Milwaukee to provide informational and home buying services to clients. These services include pre-purchase guidance to employees and loan packaging services to expedite loan applications.

Some participating employers offer their financial incentives to support homeownership among employees in neighborhoods in and around the worksite. For example, the Harley-Davidson Company offers a Walk to Work program to encourage employees to buy homes in the older and historic Near West Side neighborhoods surrounding their headquarters. Harley Davidson's efforts are part of a comprehensive community strategy to increase owner-occupied homeownership in Near West Side neighborhoods. The Harley-Davidson program is highlighted in the accompanying sidebar.

Success and Community Impact

EAH programs succeed because they are, according to Raymond Schmidt, the Executive Director of Select Milwaukee, "win-win-win situations."

The first "win" is for the homebuyers who gain personal and financial security as well as the ability to accumulate wealth through the equity in their homes. Furthermore, these programs allow many families who, without the financial assistance of their company and the services offered by Select Milwaukee, would likely not be homebuyers. For example:

• Over 50 percent of the Milwaukee homebuyers have an annual income of less than $40,000; 58 percent have an annual income of less than 80 percent of the Milwaukee County Median Income (CMI).
  
• Forty-two percent of EAH homebuyers were female heads of household.

In addition, EAH programs have helped to increase homeownership among Milwaukee's minority community. Forty-five percent of EAH homebuyers in Milwaukee between January 2000 and October 2002 were African-American and 11 percent were Latino - in a city where only 23 percent of all homeowners are African-American and 6 percent Latino.

The second "win" is for companies who see cost savings associated with decreased employee turnover. Companies also reap less tangible benefits from a positive public image or in increased productivity that results from happier, more stable employees.

The third "win" in this equation is felt in the neighborhoods. Increased rates of owner-occupancy contribute to the revitalization and stability of city neighborhoods. In some cases, like the Harley Davidson example above, concerted efforts to revitalize areas surrounding places of work have also resulted in measurable community benefits.

Nearly 65 percent of all homes purchased through EAH programs in Milwaukee were in zip codes where median annual incomes were less than $33,000 and the average purchase price of homes acquired through these programs from 2000-2002 was $90,200. The corresponding average loan amount was $82,000.

Implementation Challenges

Along with its success, Select Milwaukee has faced numerous challenges in administering EAH programs.

One of the biggest challenges, according to Raymond Schmidt, has been the balancing of Select Milwaukee's service capacity with increasing demand for services given the recent decline in mortgage interest rates. While companies pay an annual EAH program administration and services fee, Select Milwaukee has had to work harder and smarter to continue to provide timely service to the growing number of employees who take advantage of EAH.

Another challenge that has recently arisen is convincing new companies to offer EAH homeownership benefits when many companies are cutting back on benefits. "Demonstrating to companies the long-term benefits and their significant cost-savings is crucial to selling an employer on the creation of a new employee benefit," said Executive Director Schmidt. In the end, however, Select Milwaukee knows that EAH programs are beneficial to employers, employees, and communities, and it is just a matter of working with companies to convince them of these benefits.

For more information, contact: Raymond Schmidt, Executive Director, Select Milwaukee, (414) 562-5070, Rschmidt@selectmilwaukee.org.