Schumer Announces Bold New Federal Plan to Bring Workforce Housing to Westchester and Rockland Counties

Schumer Announces Bold New Federal Plan To Bring Workforce Housing To Westchester And Rockland Counties

"Next Generation Housing Zones" Would Bring Major Federal Tax Breaks And Employer Assistance In Key Suburban Areas Like Westchester And Rockland Counties That Have High Housing Costs

High Price of Housing Is Escalating The Brain Drain And Forcing Families To Leave The Area To Live And Work Elsewhere

Schumer: We Must Keep Our Kids Here

U.S. Senator Charles E. Schumer today unveiled his bold new plan make housing more accessible to middle-income workers and families in Westchester and Rockland Counties. Schumer's plan centers around "Next Generation Housing Zones" that will bring major federal tax breaks and employer assistance in high-cost suburban areas like Westchester and Rockland Counties. Schumer asserts that one of the main reasons why young people of all levels of education are turning away from working and living in Westchester and Rockland Counties is the rising cost of owning a home. The only way to solve this problem, Schumer said, is to bring all the players involved together - employers, builders, federal, state, and local government - to create an environment that encourages and supports home ownership for these workers.

"The key to the success of the businesses, economy, and even communities and neighborhoods in Westchester and Rockland Counties is the ability to retain and attract younger workers to live, work and settle down here," Schumer said. "Westchester and Rockland County businesses are the backbone of our economy and without enough young workers in the area, I'm worried that our back might break. From engineers to firemen and police officers, teachers to clerical workers, Westchester and Rockland Counties needs a robust, multi-tiered, and multi-talented workforce in order to survive. We need hard-working young families to be the base that feeds our economy."

Schumer said Westchester and Rockland Counties need to expand their stock of "next generation" housing - housing for younger, middle class, and professional workers who are the future of the economy. Without them, employers could face perpetual labor shortages and the region could face constricted economic growth. This housing crisis is touching every part of life in Westchester and Rockland Counties. Hospitals are having problems getting promising young doctors because they are opting to begin their careers in regions with more acceptable housing costs. It's the same for schools trying to get the best teachers, fire companies trying to recruit and retain firefighters, and police departments fighting to put the best young cops on the street. In order to do that, Schumer said more housing for younger workers and the middle class needs to be available and something must be done to make home ownership more attainable for everyone who wants to live and work in the Lower Hudson Valley.

Since 2001, in Westchester County, the median price of housing has increased 67%, from $449,900 to $749,500, while median household incomes went up only 13%, from $63,583 in 1999 to $72,000 today. Meanwhile, Westchester County has lost 61,668 people between the ages of 20-34 from 1995-2005, which is a 28% decline. In Rockland, the median housing price is up 80 percent since 2001, from $271,000 to $490,000, while the median household income only increased 16%, from $67,971 to $79,000. Rockland County has lost 16,735 people between the ages of 20-34 from 1995-2005, which is a 26% decline. Nationwide, the median income is roughly $45,000 and median price of a home is $185,000. That means the typical home in the United States costs four times as much as an average workers' salary. And the decline in young people between the ages of 20-34 was only 4 percent from 1995-2005.

Schumer today announced he will introduce new legislation that would have the Department of Housing and Urban Development designate areas, where the average price of a new home far exceeds the average median income for workers, as "Next Generation Housing Zones". This would directly target a few, unique areas, like the Lower Hudson Valley, where the price of owning a home has risen far out of reach for the average worker and where promising young talent has started to look at other places to live and work. Specifically, under Schumer's proposal, any area where: the median housing price is more than six times the area median income; there has been a greater than 15 percent decline in the population in the region between the ages of 25-40 over the previous decade; and, housing prices have increased by more than 50 percent over the previous five years, would be designated as a "Next Generation Housing Zone." Similar to "Empowerment Zones", all or parts of counties that fall under this new designation would be eligible for three new tax incentives and credits for builders, established businesses, and new homeowners, in order to spur renewed development and home ownership.

Schumer's legislation includes a three-point plan that will cover a limited number of areas. First, businesses hiring new people within the zone would be able provide up to $20,000 toward an employee's down payment on a home, with half that amount being returned to the business as a federal tax credit and the remainder able to be deducted as a normal business expense. Second, younger and middle class workers looking to buy a home in an area designated as a "Next Generation Housing Zone," would receive a first-time home buyer tax credit. Any person who buys a home in the zone and whose total household income does not exceed $100,000 a year for single people and $150,000 for married couples, would receive a $5,000 federal tax credit, with unused credits carried forward to future years. Third, Schumer's legislation would create a new "bonus program" through the Community Development Block Grant (CDBG) Program to give developers an even greater incentive to focus on the areas where the cost of building is growing too rapidly to meet demands. Counties would be able to give developers additional CDBG and HOME funding on top of their existing allocations only if the developer builds within the zones and agrees to keep a portion of the development dedicated for affordable or next generation housing.

"Time and again, we hear that the greatest barrier to purchasing a new home is the down payment. Most families can usually afford their monthly payments and receive relatively favorable interest rates and mortgage programs. We need to stem the rising tide of talented workers from all backgrounds, ages, and levels of education who are looking beyond Westchester and Rockland Counties to live, work, and start a family. No less than the future of the economy depends on it," Schumer added.

In addition to his legislation, Schumer called on Fannie Mae to increase funding for its Low Down Payment Program. Under this program, families can get a mortgage with as little as a $500 down payment. Schumer called on Fannie Mae to add an additional $1 billion to this program for next year. Schumer was joined today by Dr. Marsha Gordon, CEO, and Paul Vitale, vice president for government relations of the Business Council of Westchester; Kevin Luing, President of Berkeley College; Roger Scheiber, vice president for development of the Rockland Business Association, and other business leaders.

http://schumer.senate.gov/SchumerWebsite/pressroom/record.cfm?id=264365&&year=2006&