News Article

March 2008

Workforce Housing

What role and at what level will legislation play in advancing a workforce housing plan? The mortgage crisis throughout the country demands that individuals facing foreclosure meet with their mortgage lenders to discuss options other than foreclosure. The predominance of foreclosure in our country can in many cases be explained by consumers having an adjustable mortgage rate with an arm that inevitably leads to a percentage rate hike that reaches a value unaffordable to mortgage holders. There is a legislative responsibility at all levels of governance – city, state, and federal – to address the issue.

Legislation should focus on education. There are a number of agencies with programs designed to increase financial literacy among their constituents wanting to purchase a home. The Charleston Area Community Development Corporation, for example, serves a clientele that is not facing foreclosure primarily because we engage them in a program that accounts for key ownership success factors: relationship building, communication, fiscal responsibility, and financial literacy. We provide clients a fixed, 30-year mortgage, keeping open the lines of communication and introducing clients to various subsidies, including grants that provide down payment assistance.

Why did you get involved with the KC? My involvement with the KC stems from personal experience and is perpetuated by a civic responsibility to share what I’ve learned and how this information has benefited me and others.

I owned my first home at age 22 because I learned some vital truths about home ownership and had the relatively early and fortunate opportunity to dispel myths that have so long deterred many members of the workforce community to consider ownership. My mother, a long-time employee of MUSC and having two other jobs, rented housing from the time I was born until 14 years later, having heard from her mother and other family members that she could own a home. In 1995, although her salary then was not much different from her salary in 1981, my mother bought her first home at age 35. This experience dispelled for her, among other myths, that she could not be a homeowner. It was information that positioned her to move from renter to owner status.

I want to get financial institutions to the table to realize that there is an historically underserved market that could benefit from a well-focused, well-designed product, mutually beneficial to the consumer and the financial institution. It would be a matter of reciprocal education. What is your view of the difference between an affordable housing initiative and a workforce housing initiative? Affordable housing looks at a person’s debt-to-income ratio and calculates from that how much of a mortgage a person can afford. Conversely, workforce housing considers a much more comprehensive, individualized set of variables beyond affordability. Workforce housing is not only interested in how much a person can afford, but also considers factors that control that affordability. The Kitchen Cabinet housing activists, begins their work by strategically asking the right questions for a common result: to make home ownership a reality for the Lowcountry workforce.

Of all key players in the homeownership process, who do you believe has the greatest responsibility for ensuring the workforce is educated about the landscape on the road to ownership?

It will require a public-private partnership. I would advocate for conversations with mortgage lenders, not for the sake of having a discussion or for highlighting an institution’s operational shortcomings, but to examine existing policies within these institutions and discuss their efficacy within the context of serving the workforce market. As the purpose of the Kitchen Cabinet is to get things done, consistent discussions -- asking the right questions of the right persons – is the springboard to achievement.

On the Web: www.workforcekitchencabinet.com, March 2008