Buying a house just got easier for some academics at the University of California. Last month, its Board of Regents approved a new recruitment tool aimed at helping faculty members afford the high cost of housing in the state.
The UC system is one of a number of institutions in high-cost areas around the country that have taken steps to offer housing assistance to faculty members.
The plan will expand the California system’s existing faculty-housing-assistance program, which offers competitive first mortgages through the university to professors and senior administrators who do not already own homes within a reasonable proximity to their campus. Under the plan, the university will help faculty members and some high-ranking administrators -- the two employee groups that are generally hired through competitive, national searches -- borrow more money with a lower down payment, lengthen the terms of their loans, and take advantage of lower-than-normal interest rates.
Charles McFadden, a spokesman for the system, says the measure is crucial since the university will have to hire an additional 7,000 faculty members over the next decade -- 3,000 in new positions and 4,000 to replace retiring professors -- to cope with a projected increase in enrollment of 60,000 students.
University officials hope the enhanced housing benefits will counter the recent escalation of home prices in California and remove the region’s high housing costs as an obstacle to faculty recruitment and retention.
Home prices in California are among the highest in the United States. The median price of a home in the San Francisco Bay Area, for example, was about $483,000 in the first quarter of 2001, more than triple the national median price of $140,000, according to the National Association of Realtors. Some professors at two-year institutions in California like Foothill College have found they can’t afford to live near their campus. (See an article from The Chronicle, February 11, 2000.)
A survey this year of recently hired faculty members in the UC system showed that 41.5 percent of professors surveyed “definitely” or “probably” would not have come to UC had they not gotten housing assistance.
As a result, Berkeley and other campuses in the state have found it difficult to attract and keep faculty members when they have competing offers from universities in regions where housing is more affordable, says Jan de Vries, vice provost for academic affairs and faculty welfare at Berkeley.
“Housing is the single biggest problem in terms of faculty recruitment and retention that I face as chair,” says Judith Gruber, chairwoman of the department of political science at Berkeley.
The gap between faculty earnings and housing prices is staggering at Berkeley. An assistant professor in the arts and humanities earns about $50,000, while the median price of a middle-class home (the type most faculty members are likely to buy) exceeds $500,000, says Ms. Gruber. The problem is most acute for younger faculty members, who often have little savings and large debts from graduate school, but some senior professors also find it hard to bridge the gap.
“People who come here from other parts of the country where housing prices are lower get real sticker shock,” she says. “We’re offering, if we’re lucky, a more or less comparable salary, and they’re looking at being able to buy much less house for the same amount of money.”
That’s why an offer of housing support is often the critical factor in getting a faculty member to seriously consider a move, says Mr. de Vries, who also heads the Berkeley chancellor’s task force on faculty housing.
The new plan will enable faculty members to buy a much more expensive house than they normally would be able to afford on their salary. They’ll be allowed to put down as little as 5 percent of the price of the home for loans of up to $687,000, or 10 percent for loans over $687,000. (Under the old plan, faculty members who put down 5 percent qualified for a maximum loan of $437,000; a loan in excess of $687,000 required a minimum down payment of 15 percent.) They’ll now have a graduated-payment option, in which the interest rate is lower in the first year and gradually rises to the standard rate over 6 to 12 years, and they’ll also be able to extend the loan-repayment period to 40 years from 30, thereby lowering their monthly payments.
Ms. Gruber says she’s pleased with what the regents have done, but she’s not quite dancing in the streets: “Every little bit helps, but until we find some significant source of subsidy for housing, or better yet, some way to enable us to pay more competitive wages for faculty, the problem is going to persist.”
The UC system is not alone. Last spring, the escalating cost of homes in and around Boulder led the University of Colorado System to introduce its own faculty loan-assistance program. Professors from all four of the university’s campuses may apply, but preference is given to those who are most stretched financially. Those who qualify may receive a loan of up to $50,000 or 25 percent of the cost of the home. Faculty members may defer repayment of the loan until the home is refinanced or sold.
Colorado has selected 27 faculty members as potential award recipients under the program (10 to 12 of them have already gotten awards) and expects an additional 20 awards to be granted next year. So far, it’s been a great success, says Todd Gleeson, interim dean of the College of Arts and Sciences at Boulder and a member of its panel on faculty housing: “Before the program was started we had some recruitment failures in a number of departments and some faculty left after three years because they were still in rental property. But since the program has been instituted I haven’t heard of cases where people have said no because housing is cheaper somewhere else. We haven’t completely neutralized the problem, but at least we have something to offer now.”