Lack of Affordable Housing Near Jobs: A Problem for Employers and Employees -- New Survey From ULI Looks at Impact of Commuting

WASHINGTON, June 4 /PRNewswire-USNewswire/ -- Concern is apparent within the business community -- particularly among larger employers -- about the lack of affordable housing for employees, with companies reporting the shortage as being problematic in hiring and retaining entry- and mid-level workers, according to a new survey released by the Urban Land Institute (ULI). The same survey showed interest by moderate-income workers in moving closer to work if affordable housing were available.

The survey, conducted between April 26, 2007 and May 1, 2007 by Harris Interactive(R), was taken to gauge perceptions by employers and commuters regarding the impact of long distances between housing and jobs on business operations and workers' quality of life. The employer portion polled employers from three groups -- those with less than 50 employees; those with 50 to 100 employees; and those with more than 100. More than 300 companies from across the United States responded. The largest companies consistently reported the greatest awareness of problems resulting from long commutes and an inadequate supply of affordable housing -- ranging from high employee stress to high employee turnover. Overall, companies in the West were the most likely to acknowledge insufficient affordable housing as being a problem.

The consumer portion, covering more than 1,200 commuters nationwide, included those with commutes of less than 30 minutes, 30 to 60 minutes, 60 to 90 minutes and more than 90 minutes. On the whole, the survey found that the majority of employees will tolerate living farther away from work if housing is more affordable; but there were noticeable differences in opinion when measured by commute time, income and age. Those with the longest commutes were the most willing to change jobs for a shorter commute, and the most apt to move closer to their jobs if more affordable housing options were available. Those with incomes of less than $50,000 -- widely considered the "mainstream" workforce -- were significantly more likely to move closer to work if affordable housing were available than those with higher incomes. When measured by age, those aged 18-34 were the most likely to uproot and change jobs, likely reflecting fewer family obligations and fewer ties to their existing neighborhoods.

ULI Senior Resident Fellow William H. Hudnut, III, discussed the survey results during a presentation June 2, 2007 at the National Association of Real Estate Editors annual real estate conference, held this year in Philadelphia. The responses, he said, indicate that larger employers understand the reality of moderately priced housing being scattered far from employment centers. And, while many consumers continue to equate success with being able to afford a larger home in outlying areas, he said the responses from moderate-income and younger workers show they are starting to "feel the pinch" of money and time spent commuting.

"What we're seeing from employers and lower to moderate-income workers signals a need for more housing to be built closer to jobs," Hudnut said.

  Some highlights from the employer survey:

  -- Fifty-five percent of larger companies (those with 100-plus employees)
     reported a lack of affordable housing near their location.
  -- Sixty-seven percent of the larger companies that acknowledged a lack of
     affordable housing believe that it is having a negative impact on
     retaining qualified entry-level and mid-level employees.
  -- Fifty-eight percent of the larger companies that acknowledged a lack of
     affordable housing reported having lost employees at least in part to
     long commute times.
  -- Sixty-nine percent of the larger companies believe a long commute time
     increases employee stress; 63 percent believe it triggers negative
     emotion among employees; 48 percent said it causes more absenteeism;
     and 46 percent said it contributes to employee turnover/attrition.
  -- Thirty-six percent of the larger companies believe it is important to
     be actively involved in providing employee access to affordable
     housing.
  -- Awareness among larger companies regarding corporate and government
     housing  programs remains relatively low (25 percent were aware of
     corporate programs and 34 percent were aware of government programs);
     but 42 percent of larger companies said they would participate in a
     government program.
  -- Forty-five percent of the larger companies offer flextime to reduce
     commuting time; 21 percent offer telecommuting.

  Some highlights from the consumer survey:

  -- Sixty-seven percent of those with annual household incomes of less than
     $50,000 would be at least somewhat likely to move closer to work if
     more affordable housing were available.
  -- Sixty-four percent of those earning less than $50,000 would be at least
     somewhat likely to make a lateral employment move in exchange for a
     shorter commute; compared to 60 percent earning more than $50,000.
  -- Seventy-six percent of those aged 18-34 would be at least somewhat
     likely to make a lateral employment move in exchange for a shorter
     commute; and 76 percent in that age group would be at least somewhat
     likely to move closer to work if affordable housing were available.
  -- Fifty-seven percent of all commuters surveyed said they would be at
     least somewhat likely to move closer to work if affordable housing
     were available.
  -- Eighty-five percent of respondents who commute more than 90 minutes
     daily said they would be at least somewhat likely to make a lateral job
     switch to cut their commute in half.
  -- Forty-seven percent who work in suburbs prefer to live closer to work
     even though it may mean higher housing prices and less disposable
     income; while 53 percent of suburban workers prefer to live in an area
     with affordable housing opportunities and more disposable income, even
     if it means living further away from work and having a longer commute.

One notable finding in the consumer survey suggests "a lingering gap between perception and reality," Hudnut noted. Of all consumer respondents, 42 percent said they would prefer to live closer to work to shorten their commutes, even if it meant higher housing prices. Fifty-eight percent said they would prefer to live in an area with more affordable housing, even it meant a longer commute. "Many consumers who don't perceive living closer to work as desirable are likely not factoring in transportation costs as a rising expense, and are likely not aware that desirable housing close to jobs is even an option. The reality is that moderate-income housing can be developed near employment centers in a way that provides a high quality of life, offering proximity to both amenities and work," he said.

Moreover, Hudnut said, the far-flung living environment many believe to be preferable is not sustainable, in terms of conserving land or energy. "Ever- increasing commutes are taking a heavy toll on our urban areas, from a social, economic, and environmental aspect. Something's got to give," he said.

To help raise awareness of the need for more housing affordable to moderate-income workers, ULI has established the ULI Terwilliger Center for Workforce Housing, funded with a $5 million commitment from former ULI Chairman J. Ronald Terwilliger, chairman and chief executive officer of Atlanta-based Trammell Crow Residential.

Plans call for the ULI Terwilliger Center to be based in Washington, D.C. Its staff members will work with ULI district councils, housing-related organizations, and various public- and private-sector representatives in several urban areas to create models of mixed-income workforce housing design, development and financing that can be applied to other cities. Initially, the center will focus on three markets - Atlanta, Washington, D.C., and Southeast Florida. In each, the center will develop a plan to increase the production of mixed-income housing over a specified time period; to expand available project financing where necessary; and to support developers in completing projects. The goal is to produce at least 3,500 units of new workforce housing in the three markets within five years.

As part of its overall program of work, the center will identify barriers to workforce housing production (such as inflexible zoning and building codes) and work to eliminate those barriers by raising awareness of the affordability gap and by advocating changes in public policy. Hudnut noted that the center will advocate greater use of inclusionary zoning, which offers development incentives such as density bonuses in exchange for the provision of a certain percentage of below-market rate units. "Inclusionary zoning is one of the best tools to get housing built that people can afford, and it does this in a mixed-income housing context," Hudnut said. "Mixed-income is the only effective way to build affordable housing. Housing that is segregated by income is not conducive to a diverse, thriving community. A truly sustainable community is one that provides housing choices. "

To educate the public and help change public policy, the center will partner with local, regional and national organizations, including chambers of commerce, employer organizations, home builder organizations and housing advocacy groups. The center will publish best practices, organize conferences and provide competitions to recognize individuals and companies demonstrating excellence in the area of mixed-income housing production.

The workforce housing provided through the center will be oriented toward people typically making between 60 percent and 120 percent of the median income for the targeted market, and it will be mixed with housing offered at market rates. Those income boundaries will be kept flexible, however, to reflect variations of salaries and housing costs in individual markets. An emphasis will be placed on designing and building housing in ways that encourage long-term affordability.

About the Urban Land Institute

The Urban Land Institute ( http://www.uli.org/ ) is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has more than 36,000 members representing all aspects of land use and development disciplines.

About the Company Survey

The company online survey was conducted by Harris Interactive on behalf of the Urban Land Institute among 327 U.S. companies whose primarily place of business is an office building. Respondents were required to be directly involved with personnel decisions at the company. The survey was conducted between April 26 and May 1, 2007. The data are un-weighted and quotas were set to include 112 U.S. companies that have 5-49 employees, 105 U.S. companies that have 50-99 employees, and 110 U.S. companies that 100+ employees. With a pure probability sample of 327 adults one could say with a ninety-five percent probability that the overall results have a sampling error of +/- 5.4 percentage points. Sampling error for data based on subsamples would be higher and would vary. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.

About the Consumer Survey

This survey was conducted online by Harris Interactive on behalf of the Urban Land Institute among 2,261 adults (aged 18 and over), 1,215 of whom are employees who commute to an office or place of work three or more days a week. The survey was fielded within the United States between April 27 and May 1, 2007. Figures for region, age within gender, education, household income and race/ethnicity were weighted where necessary to bring them in line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.

With a pure probability sample of 2,261 adults one could say with a ninety-five percent probability that the overall results have a sampling error of +/- 3 percentage points. Sampling error for data based on subsamples would be higher and would vary. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.

About Harris Interactive

Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides innovative research, insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what it believes to be the world's largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its United States, Europe and Asia offices, its wholly-owned subsidiaries Novatris in France and MediaTransfer AG in Germany, and through a global network of independent market research firms. More information about Harris Interactive may be obtained at http://www.harrisinteractive.com/.