Baltimore and Yale's $20,000 Idea

July 26, 1995

A year ago, Yale University came up with an idea. It told its full-time faculty and staff members that if they buy a home in New Haven, Conn., the university will pay them a subsidy of $2,000 a year for 10 years as long as they remain in the house and continue working for Yale.

This set a trend. A small but growing number of non-profit institutions has begun similar programs. Some are in New Haven, including the Hospital of St. Raphael, the city's fourth largest employer. Others, like the University of Southern California, are on the West Coast.

"The university studied ways to provide opportunities for faculty and staff to purchase homes near USC campuses," a vice president reported. "We looked at a lot of different alternatives but we felt this would provide the quickest way to make a difference in the neighborhood."

At Yale, more than 125 employees have taken advantage of the program. Two-thirds are first-time homebuyers; 20 percent did not live in New Haven previously.

Mayor Kurt L. Schmoke inaugurated a similar program last September for Baltimore's municipal employees. City workers can get up to $10,000 to help with down payment and settlement costs as long as they buy a home within city limits.

So far, out of some 28,000 city workers more than 1,050 employees and their family members have attended homebuying seminars; 305 have been interviewed and 119 qualified families have bought a home through the program. The average purchase price of the houses -- which they bought through real estate agents on the open market -- has been about $78,000.

The program has been so successful the city has already exhausted an initial $2 million allotment. More money has been earmarked, however.

Meanwhile, Fannie Mae is now studying ways to expand the loan program to cover non-governmental Baltimore-based employers as well. Fannie Mae is talking to major private-sector employers as well as large institutions like the Johns Hopkins University.

Programs modeled after Yale's $20,000 idea have enabled many employers to become first-time homeowners. These programs have our support. There is nothing wrong in many Baltimore neighborhoods that an infusion of new homeowners wouldn't cure. With a stake in the city, such families provide a needed injection of activism and pride of ownership.

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