Down payments: Now paid by your employer

Housing has become so expensive in many places that people can't afford to live where they work. So, some local governments and businesses are helping with down payment costs to attract and keep employees. Is it working?

David Dworkin, president and CEO of the National Housing Conference. It’s the oldest housing coalition in America, founded in 1931.

Juan Carlos Quevedo, county employee in San Mateo County, CA.

April Norton, director of the Jackson/Teton County Affordable Housing in WY.

Meghan McCorkell, executive director of Live Baltimore.

Brittany Webb, a senior policy and research associate at the National Housing Conference.

The version of our broadcast available at the top of this page and via podcast apps is a condensed version of the full show. You can listen to the full, unedited broadcast here:

Part I

MEGHNA CHAKRABARTI: When Juan Carlos Quevedo's parents moved from Mexico, they first landed in California's Bay area. And it wasn't cheap. His parents could not afford to live close to where they worked.

JUAN CARLOS QUEVEDO: And so we were renting a whole bunch of different apartments, I remember, growing up, and one of the greatest accomplishments that my mom and dad did was purchase a home in the East Bay, but they were both working in San Francisco.

So my whole life we were doing this whole big commute between Antioch, California and San Francisco. And it was just a big stress, a challenge for our family, just commuting every day, getting over that bridge.

CHAKRABARTI: And that commute was an hour and a half each way.

QUEVEDO: So one of the goals that I set for myself professionally was to be able to purchase something of my own, near the work location that I was at, so that hopefully, if I'm able to build a family, start a family, I won't have to subject them to that grind of that daily commute. Because it's really stressful.

CHAKRABARTI: Juan graduated from college with a degree in environmental health and he became a trained environmental health specialist working in Los Angeles, Monterey, and then in San Mateo County. Juan saved.

And saved. And saved. For that one goal he had, to buy a house. Meanwhile, he had to rent and far from work.

QUEVEDO: And every time I went to the financial advisor, they would just say, if you were to do this right now, you would be stretched incredibly thin. You would burn through all of your savings. The challenge was getting that 20% deposit to purchase a home.

CHAKRABARTI: Okay. Now 20% in San Mateo County is a lot because it is one of the most expensive places to live in the country. The median price for a single-family home in San Mateo County is about $2 million. That's according to the San Mateo County Executive Office. Nationally, the median home price is $400,000. So San Mateo County has homes or houses, I should say, that cost five times more.

Then shortly after Juan started working for San Mateo County in 2016, he heard about a new program for county employees. The county was helping municipal workers pay the down payment to buy a home. The county would give its employees a low interest, $100,000 loan payable over 30 years.

But not everyone gets it because it's a raffle.

QUEVEDO: And I answered the raffle and every quarter I would get the email.

Oh, sorry. You weren't selected this time. Sorry. You weren't selected this time. Sorry. You weren't selected this time.

CHAKRABARTI: This went on for years, and then in September of last year --

QUEVEDO: Finally I got the email saying, Hey, congratulations, you've been selected. When I found out that I got selected it, it was a really big shock.

I told my mom, I told my dad, I told my coworkers like, Hey, guess what? What are you doing this weekend? Let's go look at open houses. And it was really exciting.

CHAKRABARTI: By Thanksgiving, Juan had bought his very first place, a one bedroom condo in San Mateo for $550,000. More importantly, it's close to work.

QUEVEDO: I have to be in the office at 7 a.m. in San Mateo, and I can probably leave at 6:51 a.m. So it it's pretty short.

CHAKRABARTI: Much better than that hour and a half commute his parents had to do for so many years. Now, Juan is one of 47 county employees that have enrolled in San Mateo's employee down payment assistance program since it started in 2016.

QUEVEDO: Working for government, working for counties, they're not the most highest paying jobs in the world, but you are called to serve your community and to help those that need help and to provide education to people that need education.

And so my jobs is very satisfying and fulfilling to me personally. And realistically, there are a lot of county employees that don't live in San Mateo County, and they have really long commutes, hour long commutes, hour and a half long commutes. I know county staff that the only financial way to make it work would be to stay in a hotel a couple nights a week. But I feel really grateful that working for the county, they were able to assist me with this program so that I can live in the community that I serve.

Working for the county, they were able to assist me with this program so that I can live in the community that I serve.

Juan Carlos Quevedo

CHAKRABARTI: That's Juan Carlos Quevedo, an environmental health specialist for San Mateo County, California. Now, of course, we all know that housing costs have gone up and up, and they keep going up.

So many local governments like San Mateo County are facing the same problem, the very workforce they need to run local hospitals, police departments, fire departments, sanitation departments, you name it. Those workers cannot afford to buy homes in the community that they serve. In some places it's becoming a crisis.

So employer assisted down payment programs are growing as cities and counties try to attract and more importantly, retain workers. So this hour we wanna explore these programs across the country, how they work, and also do they work. And David Dworkin joins us to help with that. He's the president and CEO of the National Housing Conference.

It's the oldest Housing Coalition in America. It was founded in 1931, and prior to joining the NHC in 2018, he was a senior policy advisor on housing and community development at the U.S. Treasury. He also served as a member of President Barack Obama's Detroit interagency team. David Dworkin, welcome to On Point.

DAVID DWORKIN: Thanks for having me, Meghna. It's great to be here.

CHAKRABARTI: So I understand that one of the very first, if not the first kind of employer assistance program targeted at housing actually came from a very interesting source back in 1991. A major name in housing itself.

DWORKIN: It's true. Fannie Mae, one of the two big secondary market companies in the country, pioneered the program.

And they immediately realized, understandably that it's hard to sell the concept if you're not doing it yourself. So they adopted their own program and there's certainly an issue of practicing what you preach that makes a difference. It's why NHC, we're a small nonprofit. We offer a program too, and it's a great way to help employees reach a dream of home ownership.

It's incredible for morale, but there's also a very self-serving aspect. Retaining employees or recruiting and training new ones is expensive. And so if you can help employees have a commitment to staying with you, these programs often pay for themselves.

If you can help employees have a commitment to staying with you, these programs often pay for themselves.

David Dworkin

CHAKRABARTI: Yeah. I want to talk about some specific programs throughout this hour.

In terms of how they work or how effective they are. But let's stick with Fannie Mae for a second, because it was the early nineties, what, 1991. But Fannie Mae also didn't necessarily start the program because housing costs were out of reach for a lot of people. We're only, the housing slump of the eighties was wearing off by 1991, but they had started their program because they just had an employee turnover problem as well.

DWORKIN: Yeah, employee turnover was an issue there. And remember, interest rates were 10%. ... So that was also a big factor. And the more down payment you can put on a loan than the lower your payment is going to be. So that'll help offset some of the interest. They saw their turnover, which was around 25%, go down to single digits after putting in the program.

And I think most employers do see that, because the way it's structured is you get this loan that is forgivable over time, and every year you stay at the company, they forgive a portion of the loan, and so if it's a four-year loan, 25% gets forgiven each year. You never actually make a payment.

If you stay for four years, you don't pay any interest. And at the end of that period, do whatever you want. But for four years to have an employee stay at the same company is huge. Especially now.

CHAKRABARTI: Yeah. Thank you for reminding us about late eighties and early nineties interest rates because I came of age at the time where the IAC declarations of the Fed led to very low interest rates.

That's right. For 30 years, which is one of the. Things that's contributed to the problems we're seeing now, even as interest rates are rising. But you said that these programs can often pay for themselves and there's a good example we have from Detroit where you have a lot of experience actually, that even just like local businesses. We have an example of a local home builder in Detroit who was just offering his employees what, $5,000 to help there, do you know of this story?

DWORKIN: Yeah. Back in the nineties, I was in Detroit running Fannie Mae's Detroit Partnership office and talked to one of the builders there and said this is a great program.

You should think about this. He had problems with turnover. It was hard to keep builders on the site. His competitors were, going up to his carpenters and with a bag of cash literally, and saying, Hey, come work for me instead. And so he was like I can try this program out. And he offered it $5,000, which was a pretty good help in the nineties in Detroit.

And when they ran the numbers through their accounting and HR office, they realized they'd actually be making money on the program, came back to me and said, you know what? I think we need to offer twice as much because I don't actually want to make money on this. I want to break even. And they offered more.

And so the beauty of the program is that the employer really structures it themselves. So they can sit down with their HR folks and say, what's our turnover rate? Let's model what the likely impact of this would be and then figure out where our breakeven point is. And some will want to do more than that.

Some might do, try to keep it at the breakeven point. But they're always surprised at how beneficial it is just on the money side.

CHAKRABARTI: And this home builder wasn't necessarily a giant corporate home.

DWORKIN: No, not at all. Yeah.

CHAKRABARTI: So that's really interesting, right? That this is a program or an idea that even small employers could possibly deploy.

DWORKIN: Yeah. I think small employers get a lot of benefit from it. And we also see that Fannie Mae was not a big employer in terms of employees. It was a big company, but it makes a difference.

Part II

CHAKRABARTI: David, in a moment we're going to hear from someone in Baltimore, but I just wanted to go over some quick facts with you about how much the housing market has changed in a lot of places in this country.

Since 2019, so obviously the very next year was COVID, which had a lot to do with this. But since 2019, we've found that the income needed to purchase a home has more than doubled in 125 metro areas in this country, and the number of metro areas that are requiring a six figure income, and they're not requiring it, but you have to have a six figure income in order to buy a typically priced house with just 10% down, not even 20%.

30 of those metro areas in 2019, but now it's 176 metro areas. Can you talk to me, David, about not only just the size of that change, but then how municipal governments themselves may find themselves in a particular bind in terms of attracting the very workers who have to keep those metro areas running.

DWORKIN: Yeah, it's a big deal for municipal workers. It's a problem really across the spectrum, you were talking to Juan about San Mateo County. And in the San Francisco Bay area, none of the occupations that we track can afford to buy a home. Not a single one, not even lawyers.

And so it's completely out of control, but we're also seeing that in Lincoln, Nebraska where we've got civil engineers or registered nurses who can't afford to buy a home, and that just is hard to believe. We used to use San Francisco as the shock factor. But we never thought we'd be talking about Lincoln, Nebraska or Boise, Idaho as having affordability crisis. And so counties and cities have realized they have a turnover problem for their own employees, but they also have a big turn problem in terms of attracting employers to their community.

And they have also a stake in their hospitals, which are fixed assets. It's not like the hospital's going to move to somewhere more affordable. And so that's also been a factor. And they've heard about this program and they say, you know what, we could try that. And they overwhelmingly have had a really good experience with it.

CHAKRABARTI: It's so interesting that the forces are a little bit different in some of the places you talked about. Like in Boise, everyone wants to move there now, so that's one of the reasons it's driving up the housing prices.

DWORKIN: It is.

CHAKRABARTI: And in other places, I'm sitting here in Boston, there's just not enough new housing, period.

But the end point is the same. And you know, what's really shocking or upsetting is that these jobs that we're talking about. Teachers, policemen, firefighters, like you said, engineers, lawyers, they're great jobs. These are great jobs. These are the prototypical or sort of example of American, not just middle class, but upper middle-class jobs.

DWORKIN: Yeah, absolutely. And I think that's one of the reasons why politically, housing affordability has become a much bigger deal. This is not about a problem that people with low incomes have, it certainly is a problem that they have. But now politicians, regardless of their political party or where they're from, they're hearing from their family members, from friends, from donors who are saying, Hey, my kids are in their thirties, and they still can't afford to buy a home.

It's why we've seen the average home ownership age move up to almost 40 years old, and we've never seen that before.

We've seen the average home ownership age move up to almost 40 years old, and we've never seen that before.

David Dworkin

CHAKRABARTI: I think, what was it, maybe a generation ago, if not less, it was what, the mid to late twenties.

That's how much it's changed in terms of first time home buyers. Amazing. Disturbing. Okay.

DWORKIN: And that's when I bought my first home, in my late twenties.

CHAKRABARTI: I did not. (LAUGHS)

DWORKIN: Yeah. Dating myself now, especially with the 10% rate.

CHAKRABARTI: I will be completely transparent here. I was only able to buy the condo where I live now, which is my first home that I owned. Because my parents helped me with the down payment. So I had some kind of assistance. It wasn't municipal, it was parental. But without that, absolutely, without that, it would've been totally out of reach for me. But let's go to a place, another city that's using this kind of housing incentive to build up its workforce and not just the municipal workforce.

So in Baltimore, Maryland, they have a municipal housing assistance program, and it's called Live Baltimore.

MEGHAN McCORKELL: So we're like the customer service arm of these down payment incentives.

CHAKRABARTI: That's Meghan McCorkell, the executive director of Live Baltimore. It's a nonprofit focused on attracting and retaining residents in the city.

So again, not just municipal employees, although we will talk about what the city of Baltimore is doing. One in six of every Baltimore home buyers have used Live Baltimore, and when Meghan says incentives, she isn't kidding, because Baltimore City alone offers over a dozen such incentives.

McCORKELL: Baltimore City has always recognized that down payment can be a barrier to access for people who want to purchase homes, and so they have really set up incentive programs across the board for all different kinds of people. And we list them on our website, and we help people at Live Baltimore navigate all of the incentive programs that could potentially be applicable to them.

CHAKRABARTI: This includes the city's live near your work program and more than 130 employers are enrolled.

McCORKELL: And what that is they sign up to do this and they provide a certain amount of down payment assistance to their employees, and the city will match that up to $2,500. So if you're a company and you're putting down $2,500, the city will match it. So that'll be a $5,000 down payment for one of your employees.

CHAKRABARTI: This includes big employers like Johns Hopkins University that offer up to $17,000 of down payment assistance for their employees. The University of Maryland offers up to $18,500. LifeBridge Health offers up to 19,500, but there are also much smaller companies in the program. McGee's Pub offers $2,000 and Koco's Pub offers $2,500. Live Baltimore itself has an incentive program too, which offers up to $4,000 to its employees.

McCORKELL: The employer gets to set sort of the parameters, the geographic parameters of where people would buy within Baltimore City. So for instance, the University of Maryland, Baltimore participates in this program, and they have picked five or six neighborhoods right around the geographic area of University of Maryland, Baltimore.

Some of these neighborhoods are really in need of neighborhood revitalization, and this program has helped tremendously by placing employees in some of these neighborhoods so they can walk to work, but also get an incredible incentive towards their down payment.

CHAKRABARTI: The city of Baltimore also offers municipal employees down payment assistance.

McCORKELL: And so if you are a employee of the city, you can get a $5,000 down payment assistance to move anywhere in the city to buy your house in the city. So I am actually a participant in that. I had before working here, I worked at the public library, and I was able to buy my house with a $5,000 down payment assistance grant through the city of Baltimore because I was an employee.

So I always say I am not just the executive director. I am also a client.

CHAKRABARTI: Now, the programs that she's talking about are forgivable loans. So if you keep working there for five years and stay in the house, you do not have to pay back a dime. But these employer based down payment assistance programs are actually not the city's most popular incentives, the most popular program is the city's trolley tours.

McCORKELL: So we do them three times a year. We see between 450 and 600 perspective home buyers at each of these events, so they're very large events. We load people on 10 buses and we have a 9 a.m. bus and an 11 a.m. bus, and we're able to show them so many of the different communities.

Then after the trolley tour, if they are able to put an offer in on a home within 12 business days, they can apply for what we call the Buying into Baltimore home buyer incentive. And that is $5,000 of down payment assistance towards their home purchase, and it comes in the form of a five-year forgivable loan.

CHAKRABARTI: And more than a thousand people have purchased homes in Baltimore through this particular program. Now, the programs are, of course, not without restrictions. There are things like fixed mortgage rates, a minimum $1,000 contribution towards the purchase of the home, and of course, having to be the home's primary resident.

Now, these incentives, including the employer-based ones, seem to be working, because for the first time in a decade, Baltimore's population has increased.

McCORKELL: I think so many of them are champions for Baltimore City. They've decided to base their companies here. They love this city, and they know that one of the key things for this city is to succeed is to have more people living here, more people owning houses here.

They want to attract some of the best employees from across the country, and this is a way to do that.

CHAKRABARTI: Meghan McCorkell, executive Director of Live Baltimore, David d and let's get into some of the details now you heard Meghan there talk about forgivable loans, other communities essentially, they do straight up grants, others do low interest loans.

Do we know what kind of financial structure works best or is most successful in attracting and keeping employees?

DWORKIN: When you talk about keeping employees, tying the grant or the loan to tenure is the most effective way to address that issue. And so like in Baltimore, say you would forgive the amount of the loan over a period of three or four or 10 years.

Four is the sweet spot, and so you're forgiving that loan 25% each year. That is a great way to encourage the employee to stay, but you're also, of course, increasing loyalty. You're giving your employees an opportunity to become homeowners and they wouldn't have otherwise been able to do it, so it doesn't just impact them.

Their friends at work and coworkers are seeing this happen and it changes the way they think about their job and their employer. So I think that that's a great way to do it. You still get benefit if you're just offering it as a grant. And one of the reasons is because it's so expensive to live in a lot of these cities.

Amazon was really struggling with their corporate headquarters and the amount of money it costs to live in these communities. And so when they started going outside of the Pacific Northwest, they picked cities like Nashville. When Amazon moved thousands of employees to Nashville, Nashville didn't say, oh we're going to build 5,000 more homes. And guess what? Housing prices have gone through the roof in Nashville and it's a big problem there.

And so these big employers take this problem with them, and we have to really think strategically about all the components of our economy. Now, you talked about housing prices going up around the COVID pandemic and that's absolutely true.

We've seen pretty dramatic impact. Because there were many demographic factors that come with a pandemic. But we already had a huge shortage going back to the Great Recession when we saw so many home builders going out of business.

And that is a big driver of our inability to build affordable housing.

And every year we've had this deficit and it grows. And it's gotten to the point now where we're millions of units behind.

CHAKRABARTI: So let me ask you about some of the obstacles in really deploying these housing benefit programs more widely. The first one that comes to mind, just thinking about Juan from the beginning of the show, is that he had to wait years for his lottery ticket, essentially, to be drawn before he was eligible for, or before he received the San Mateo County Housing benefit.

And so I wonder if there is essentially a cap on how many employees can receive these benefits and if that cap actually limits how effective the programs can be.

DWORKIN: It can. In his case, he kept coming back and applying each year and eventually did get it. But I think that for a private company it's a different dynamic. Because they're seeing these costs across their company's employees, and if they're breaking even on the program, it's easier for them to agree to fund it upfront. And in the case of the National Housing Conference, when we offered the program, we had a budget for using the benefit each year, whether somebody was using it or not. So that cost us money.

But I also had a staff that was really super high quality and offering the benefit was an attraction, even if they weren't ready to buy a home yet. And then, you talk to one of the folks on my staff, Brittany Webb, who actually works on this program, and when she took advantage of it, it was a huge.

Big deal for everybody in the office to see her become a homeowner and she would've been able to do it otherwise.

CHAKRABARTI: David, actually, since you mentioned Brittany, we do have a clip from our conversation with her. She lives in Washington where she has actually rented for her entire life. She has student loans and, of course, there's just the already high housing cost in D.C.

And so she told us, as you well know, that buying a place was just out of her reach until she used the National Housing conferences job, or sorry, down payment assistance program, which for people who don't know, gives employees a $20,000 no interest loan that is forgivable after four years.

BRITTANY WEBB: When it came to a point of deciding if I was going to stay in my rental, it was now an option of, I know that low cost down payment mortgages exist and I'm not looking for a million-dollar home. I can get a condo in this area. And $20,000 gets me to that 3% minimum down payment for first time buyer programs.

It did make the difference of whether or not I was going to buy a home. It was the deciding factor for me, and I didn't have to go to my parents and try to see if they had any money set aside that would help me get to this point. It was a nice way to feel much more independent and in control of my finances without having to do, as David likes to say, the daddy down payment.

[Down payment assistance] did make the difference of whether or not I was going to buy a home.

Brittany Webb

CHAKRABARTI: That's Brittany Webb also works with David Dworkin at the National Housing Conference. David, just quickly, I want to be realistic because there's also no such thing as free money. For even these grant programs, for example, is there a tax implication for the workers themselves?

DWORKIN: Yeah, unfortunately the federal government treats the forgiveness of this loan as income.

And when an employee gets the benefit of it being forgiven, they also get a tax bill with that. And one of the things we're talking to members of Congress about is let's give them a break on that. We don't have to charge them tax on getting down payment assistance. And it's so much cheaper than the government offering down payment assistance itself.

Part III

CHAKRABARTI: Let's go to Teton County, Wyoming. It's where Jackson Hole is located, of course, with its iconic hiking and skiing destinations. Home to Grand Teton National Park with Yellowstone right next door. It's also the wealthiest county in the country, and it's only getting wealthier. Since 2002, personal income in Teton County increased by 627%.

Today it has a median household income of $1.3 million, and housing prices have skyrocketed as well. Median home price in Teton County is almost $3 million. That's a 560% increase since 2002. So if you are not a jet setting millionaire or billionaire, but if you are one of the workers that keeps the millionaire and billionaire homes, stores and their city running, can you afford to live in Jackson Hole?

Okay, that's a rhetorical question. I know. But here's April Norton. She's the director of the Jackson Teton County Affordable Housing Department, and here's how she puts it.

APRIL NORTON: Our market is, I hate to use the word unique, this is the wealthiest county per capita in the nation by a long shot.

It is a different marketplace. And so it is less about supply and demand here, which that is certainly part of it, but it's supply of the right kind. And by that I mean something that is restricted to local workforce, because there's global demand to live in Teton County, Wyoming and people who are generating their income locally can't compete with somebody who's generating their income from non-local sources.

CHAKRABARTI: In 2012, the county set a goal to house 65% of its workforce locally. Now that number stands at about 60% today, but April says it's about to drop.

NORTON: Our housing needs assessment that we did a couple of years ago told us that about 13% to 15% of our workforce is set to retire in the next handful of years, and a lot of those folks will sell their homes and move away.

They, many of them bought their homes in the seventies and eighties and have seen a significant increase in their home's value since they purchased their home. So many of those people will move away. And then the folks who are able to buy their homes are typically not replacing, they're not coming in to the job place and replacing the people who have just retired.

CHAKRABARTI: In 2022, Teton County officials decided to do something about it. The county launched its own workforce home down payment assistance program to help get local employees housing that they need. The county adopted a program that mirrored one in neighboring Vail, Colorado, but with some tweaks targeted at home ownership and local employees.

So the county would give home buyers $200,000 to purchase a deed restriction on the home that required that those who live in the home must work locally in the county. Okay? $200,000, but you got to work locally in the county. But this was a grant, not a loan, meaning no interest. And the workers don't have to pay it back.

NORTON: So when we first started the program in 2022, we came out of the gates hot. We had we had some really early quick successes. And were able to permanently protect four homes in less than a year, which we were really excited about. Since then, and since our market has continued to really get farther and farther outta reach, we have seen that $200,000 really isn't enough to entice someone to take the leap to take on the large mortgage at a higher interest rate and to permanently deed restrict the home. So we really have seen very little movement.

CHAKRABARTI: Okay. So if you listen to April carefully there, obviously the $200,000 wasn't going far enough as house prices continued to soar in Teton County, but there's another catch.

Any home that is part of the program would have an appreciation cap of 3% annually, which is definitely less than houses on the open market are appreciating in Teton County. Meaning if the owner sold the home, they couldn't make a ton of extra money on the sale.

NORTON: We've seen the first home I think that we purchased a workforce restriction on through this program, it resold last year I think, or maybe a year and a half ago. And there was another, it was a town home and there was another market rate town home and the same development for sale that wasn't quite as nice. And the market rate town home was listed at a price that was double the price of the deed restricted town home.

And I think that's hard for people to see.

CHAKRABARTI: There are 24,000 employees who work in Teton County. Only 60% of them live there, so the county has developed a lot of affordable housing through public-private partnerships, but it's not enough. And April says only four local employees have taken advantage of the deed restriction program.

NORTON: I think the tool as it exists today. Isn't working. And that's like factual at this point. It's not working the way it's currently designed, so we've got to change it. And that's been the direction from our elected officials, their direction is we really want to figure out how to preserve existing housing stock.

Because it's a lot easier to preserve something that's already been built. And it meets multiple community goals, not just our resident workforce goals, but also some of our community character goals, being able to keep some of the older homes that are in the valley versus scraping them and building something that's larger.

I'm hopeful that there is a version of this tool that preserves existing workforce homes in perpetuity. There's a version of this tool that exists that will work here, and that's the work that we have to do.

CHAKRABARTI: So that's April Norton, director of the Jackson Teton County Affordable Housing Department in Wyoming.

David, what do you think?

DWORKIN: So the first time I heard about this was the Vail InDEED program. I'm thrilled that Teton has also picked it up. I think that there's no question as April was saying, that there are imperfections in the way the kind of pilots have been designed. Absolutely can be addressed, but it's trying to solve for a problem that ... all over the country are facing.

Housing prices are very high there. One of the reasons is because a lot of the people who buy homes and bid up homes to higher values don't actually live there most of the year. They might spend three weeks or a month, sometimes two in the community, and then the house is vacant the rest of the year, and no one is actually able to work in these ski resorts.

You're talking about ski instructors, you're talking about people who work in the restaurants who run the lift lines, and they could be driving hours from where they're actually able to afford to live. So there's a high incentive for the companies as well as for the communities to come up with ways to deal with this.

3% is pretty tight, but if you were to say we're going to split the equity increase you see in your house until you've actually paid back the full amount, so when you hit $200,000 if the amount is 200, then after that all the equity is yours, that allows that money then to recycle back into the program and help fund other people from getting it.

And for the homeowner, you're simply returning the amount you got before you start profiting. And I think that makes a lot of sense to people.

CHAKRABARTI: So David, let me just get some clarification on this. So what you're saying is that if you, an idea is to pay back the entire $200,000 and then however many years later you wanna sell it.

You could sell it at the then market rate, not have that deed restriction, but you'd have to split half of the delta and the equity with the county. Is that what you're saying?

DWORKIN: You would not be paying back the $200,000 while you're living in the home. But when you sell it, then out of that equity you've earned, the first 200, if that's what you got, goes back to the county and then the rest of it is yours.

All you're giving them back is the amount they gave you in the first place, and you can make more money if that's how much the house has gone up. But for the money you're returning to the county, that money now gets recycled to other people who get to use the program.

CHAKRABARTI: But maybe I'm just being, I'm missing something here because if that place gets sold, then again on the open market.

I'm just thinking of the example that April gave us, of the one town home that's deed restricted and then the one next, basically next door to it sold for twice as much. I think her concern is that bit of housing stock is basically removed from the available stock that the county can work with for this housing program.

There's no question that as housing prices go up, they're going to be less affordable, and you could restrict it. I think you do end up with the problem that she's found and that has an impact on people's incentive to buy and use the program. And one of the reasons is when we tell people home ownership is a great opportunity to build wealth, we actually want them to be able to build wealth.

CHAKRABARTI: Tell me more about that. Why am I buying a house rather than renting? The reason is because I'm going to be gaining equity in that house. And that's going to build wealth for me, because that's the primary way that middle income Americans build wealth, is through the equity in their house.

Now, in my loan, the amount I'm paying to the lender starts with mostly interest. And then each month, over time, I get more equity. But I'm also getting equity when prices go up. And so we want people to share in that, the question is how much we share and how much we get back as providers of this assistance.

CHAKRABARTI: Yeah. Okay. So I do not quibble with any of that. That's like a fundamental truism of housing and especially intergenerational wealth in this country. But I guess what I'm wondering is, actually April's example is a great one that wouldn't we just somehow recreate a dynamic that a lot of counties are worrying about now, which is they have a lot of workers who are reaching retirement age.

And those very workers may have bought into the housing market, in their municipalities 30, 40 years ago when home ownership was much more within reach than all of that housing now, if those retirees decide to sell it. And I don't know, I don't know why people would want to leave Wyoming, but move to Florida. That housing isn't necessarily going to be filled by new workers, because it's just too expensive.

DWORKIN: That's why they're giving such a big benefit of $200,000. And otherwise, you wouldn't need to give that much money.

CHAKRABARTI: Okay. There's actually another thing about the very fabric of a community I wanted to ask you about David. I'm just thinking about in Teton County, a lot of the workers there actually live, as you said, a long commute away in Idaho.

And I was just there this summer and I was talking to several people and they said, look, when there's a particularly bad storm, we cannot get into Jackson Hole. Yep. Because they have to go across this big mountain pass, that's similar in a lot of places. And what I'm wondering is when you have a critical mass of these essential employees for a town, not just because they're the policemen and the firefighters and the teachers, but they are people who, almost like character wise and culturally help define what a community is when those people don't even live in the very communities they serve.

Doesn't that fundamentally, I don't know, change something about these counties? Yeah, go ahead.

DWORKIN: It definitely does. This is about being a part of a community. And if you say the people who work in this community are going to have to be spread for miles in every direction, that's going to have an impact on that community, particularly during the off season.

My family's going to ski in Vail this year, and we're going to rent a house through Airbnb. Guess what? No one's living in that house most of the year. It's all people like me coming in. It's one more house off the market. And so it has an impact and it's a great investment opportunity for the person who owns the house.

You do want some of that, I have no problem with it. But I also recognize that the reason, that one of the reasons that these homes are not being lived in by folks that are local is they just can't afford to. We need to find some middle ground there.  There's another big impact, which is road use.

The longer the commute, the more people's cars are on the road. Now that means it's a bigger carbon footprint and it also wears down the roads so that the municipality and the federal government are paying more money to maintain those roads, because people have to drive further on them and they're not living in town and walking to work.

Or doing a short drive.

CHAKRABARTI: It also grinds down the people, right? Just the quality of life impact of having to commute that far. One interesting thing that we found is that even though there are quite a few number of these programs across the country, something people told us is that they need, they still need to do a better job or need help getting the word out to employees that such programs exist? Your thoughts on that?

DWORKIN: Yeah. To employees and employers who could be offering it and just don't know about it or have never really considered it. So there's an element of this that is definitely a marketing issue. If it's offered by an employer, it's easy for them to communicate with their employees.

And as you mentioned earlier, one of the real values in communities that aren't like Teton or Vail is that there are neighborhoods that really need help. And if you tie the program to helping these neighborhoods, particularly if you're a hospital system, you want people to feel safe when they come to the hospital, because they do have choices.

When Howard University began its neighborhood redevelopment initiative at the beginning of the 21st century, the president of Howard said, people used to have to come here. But now, Black students can go anywhere they want. We don't have segregation. They have a choice.

And when parents come to this neighborhood and they look around, they're like, oh no, we're not doing this. And so he realized to be competitive that he had to redevelop the neighborhood, that the university had an interest in redeveloping the neighborhood. And they worked with Fannie Mae, they worked with the city.

They developed a program to redevelop LeDroit Park, which was this historic neighborhood. They wanted to make sure that the beneficiaries of this redevelopment were people from the community. So they offered a very generous down payment program to their employees. And a lot of the homes that were built or renovated went to Howard University employees.

And it definitely had a dramatic impact on the neighborhood.

The first draft of this transcript was created by Descript, an AI transcription tool. An On Point producer then thoroughly reviewed, corrected, and reformatted the transcript before publication. The use of this AI tool creates the capacity to provide these transcripts.