Council boosts housing loans for city staffers

For more than a decade, Mountain View has offered loans to help its rank-and-file workers afford the exorbitant cost of a home, but the program has received barely any attention. And there’s a good reason for that: No city employee has ever applied for one of the loans.

This week, city officials began looking at updating the employee loan program by offering more money and flexibility to encourage City Hall staffers to participate. City administrators believe the new tweaks will fix the old program’s main problem — namely, that the loans were just too small to help.

“For the amount of the loan and the cost of housing, the old program didn’t help employees access to the local market,” said Assistant City Manager Audrey Seymour Ramberg. “We’re hearing that employees are now interested, but they still have concerns that the loan amounts still might not be enough.”

The old loan program offered city workers up to $100,000 to purchase a home in Mountain View. Workers could apply for this low-interest loan only if they were earning less than 120% of the area median income, or about $105,000. This income requirement was waived for police and firefighters.

Under the new program, employees could borrow up to $250,000 to buy a home within 10 miles of Mountain View. Police and fire department employees will be allowed to take out double that amount if they buy a home within 5 miles of the city.

Even after the increase, the new loan program might still be insufficient, as the cost of an average house in Mountain View is now upward of $2.3 million. Ramberg said the city would test out the new loan package as a pilot program, with the possibility of more fine-tuning in the future.

While the city’s loans for its rank-and-file received little notice, a separate program for the city’s department heads has been more widely used. Since 1995, Mountain View has offered a much more generous loan package for its executive staff and appointees, up to $1 million or more to pay for housing. Since its inception, six city officials have taken out loans through the program, according to city staff.

Those executive loans are also getting bigger. Top city staffers will now be allowed to borrow the full cost of a median-cost home in Mountain View, or 75 percent of the purchase price, whichever is lower.

If fine-tuned, city administrators believe a well designed loan program could help retain its experienced workers by allowing them to live closer to their jobs. Mountain View experiences turnover of about 10 percent of its total workforce each year, according to city officials.

“We do exit interviews and we hear frequently that employees are relocating to areas with a lower cost of living and shorter commutes,” Ramberg said.

The new loan program was approved in a unanimous vote as part of the consent agenda at the City Council’s May 14 meeting.