Easing the Squeeze : As Housing Costs Soar, Innovative Relocation Perks Help Ventura County Firms Woo Workers

Dave White of Memphis, Tenn., was thrilled when Procter & Gamble offered him a job managing its paper products plant in Oxnard.

For 33-year-old White, who drove a Corvette and lived in a gated, lakeside community, the job meant a pay hike and promotion into management.

But moving to Ventura County hasn’t raised White’s standard of living.

Now he drives a 1985 Buick. He and his family live in a smaller, older Moorpark house that cost $70,000 more than the luxury home they left behind. The waterfront is 20 minutes away.

“When the realtor showed us homes in our price range, my wife started crying and didn’t stop for three days,” White recalled. “Even with a decent salary and good equity in a house in Tennessee, we couldn’t come anywhere close to our previous home.”

Worth the Price

For White, the job promotion and California’s sunny skies are worth the housing trade-off.

For an increasing number of those offered employment in Ventura County, they aren’t.

And as the median cost of a resale home here soars past $234,000--the second highest cost in the state at the end of 1988--more local companies are following a national trend by offering innovative housing and relocation benefits in attempts to recruit and retain workers.

“Increasingly in the 1980s, employers are providing housing assistance for their workers,” said David C. Schwartz, director of the American Affordable Housing Institute at Rutgers University.

Such help is crucial, said Schwartz, who fields desperate calls each day from corporate personnel offices, chambers of commerce and mayors. “Firms have lost key personnel to lower housing areas all over the county.”

Cash Incentives

In Ventura County, companies offer incentives including one-time cash bonuses, low-cost housing loans and payment of the difference in property taxes or mortgage interest rates between the old homes and new. One hospital in Ventura County has even purchased homes and apartments that it rents for as much as $150 per month less than the market rate.

All told, only a few Ventura County companies offer big-ticket housing assistance. But many others say they are studying the idea or plan to offer such assistance soon.

“It’s something we’re going to have to continually look at,” said Frank Maruna, an employment specialist with Northrop Corp., which has no companywide policy but negotiates relocation deals on an individual basis.

Studies show that companies in the Los Angeles-Ventura-Orange county area--one of the six costliest places to live in the nation--already have trouble attracting workers.

Runzheimer International, a management consulting firm that specializes in relocation, found that 39% of employees resist transfers to the Los Angeles area because of the scarcity of affordable housing. And a 1985 Conejo Valley Chamber of Commerce survey found that 80 of 362 prospective Ventura County employees turned down job offers because of housing concerns, a figure that is probably higher today because of increased housing costs.

Blue-Collar Crunch

While high-tech companies that recruit professionals feel the crunch most strongly, blue-collar industries are also beginning to get nervous. Housing prices rose 28% last year in Ventura County and are expected to continue rising, according to the California Assn. of Realtors.

“Unless they already own a house, the problem we’re seeing is that the work force here at the plant is not able to buy houses in this county,” said White, the Tennessee transplant who runs Procter & Gamble’s paper products factory in Oxnard.

Finding people to run the county government--from landfill engineers to transportation planners--is also an increasing battle.

“We’re getting killed in an inability to attract and retain qualified technical people,” said Barry Hammitt, executive director of the Public Employees Assn. of Ventura County, the county’s largest union, which represents 6,500 workers.

Hammitt said he expects to approach the Board of Supervisors within 90 days to ask that the county commit some of its retirement funds for low-interest housing loans. He said the loans would help lower-echelon county employees who otherwise would not qualify for home loans.

Top-Level Needs

Even top-level county employees could use such a loan. Take the Baltimore resident whom the county recruited for one of its top personnel jobs after a nationwide search. He flew out to tour Ventura, then turned down the job. Edward L. McLean, the county’s assistant personnel director, said high housing costs helped slam the door.

Another example is Jack Gyves, the former superintendent of the Ventura Unified School District. He moved to northern California to become superintendent of the Napa Valley School District last year because he could not afford the home he wanted on his base salary of $85,000.

“If it’s a factor for people at my income level, what about for people coming in at levels significantly lower, at the beginning of their careers?” he asked.

The question pops up increasingly in corporate offices throughout Ventura County.

“Everybody goes into culture shock when they go from a low- to a high-priced housing market. You do a lot of soul-searching,” said Linda Sheldon, a human resources representative at Chevron USA who suffered a few pangs herself when Chevron relocated her from Midland, Tex., to Ventura last year.

Sheldon owned a 2,400-square-foot “dream home” in Texas that she said she sold at a $17,000 loss. In Ventura, she said, “you buy an 1,100-square-foot condo for twice the price, and you have to think about where you need to be and if you can afford it.”

Bonuses for Executives

Chevron smoothes the path to Ventura by offering cash bonuses of as much as $30,000 for home-owning executives and professionals who relocate from the depressed Texas market, Sheldon said. The company also pays closing costs on homes and provides bridge loans for employees who buy new homes before they sell their old ones, she said.

Chevron’s five-digit deals are among the highest, but other companies offer a variety of creative incentives to coax new hires into Ventura County.

Amgen, the Thousand Oaks biotechnology firm, will help spouses of employees find local jobs and will consider hiring those with applicable skills, said Bill Puchlevic, vice president of human resources.

In some cases, Amgen will also offer employees home loans at several points below market rates. The firm, which expects to boost its work force from 450 to 2,000 within five years, also works with real estate agents who meet with prospective transferees to discuss desirable neighborhoods, school test scores, shopping and property taxes.

“We’re here; we’re not going to move to somewhere like Louisville where there’s affordable housing and . . . we recognize that you have to help people,” said Mark Brand, Amgen’s director of corporate communications.

For Brand, the corporate relocation policy has a personal resonance: He moved to Westlake Village four months ago from Chicago’s North Shore and bought a house that cost $70,000 more than his old one.

Difficult Times

Would-be homeowners in Southern California face difficult times, according to the California Assn. of Realtors. While 47% of residents nationwide make enough money to afford the $89,100 median cost of a home, only 16% of Los Angeles-area residents can afford the median, which is $165,602. Just two years ago, 27% of Angelenos could afford a home.

Comparable recent figures for Ventura County are not available but are being compiled by building industry and real estate groups.

In addition, homeowners now spend more of their income on mortgages than ever before. In many instances private lending institutions have increased the percentage of gross income they allow for mortgage payments from 28% to 33% to reflect the higher cost of buying a home.

Those seeking new homes in Ventura County face additional hurdles. The supply is tight--only 4,000 residential building permits were issued last year countywide--and fewer homes still were actually built and sold. Those that were fetched more than $370,000 on average, said Ron Golden, a vice president at Continental Land Title Co. in Camarillo. He said that new homes “are being sold literally before they’re being put on the market.”

Some firms have declared Ventura County the housing equivalent of a disaster zone.

Extra Help

Procter & Gamble recently designated Ventura County as one of seven areas nationwide where employees can qualify for extra assistance because of the exploding cost of homes.

“It’s a very big problem that affects our employees. We are very concerned and are grappling with what we should be doing,” said Bob Paulger, the company’s public affairs manager.

One thing they already do, under certain circumstances, is to make interest-free loans available to relocating homeowners who cannot afford down payments on Ventura County homes. The loan is repaid over five years. In exchange, the firm shares in the equity buildup of the home, Paulger said.

One of the county’s most progressive housing assistance plans is that hatched by Ventura’s Community Memorial Hospital, which bought three houses and one four-unit apartment building within walking distance of the hospital.

Physical therapists and other employees with difficult-to-find skills can live in the company-owned units for as long as a year without paying the usual first or last month’s rent or a security deposit.

“We hope the money they save will give them a nest egg to get started,” said Dr. Michael D. Bakst, the hospital’s executive director. He added that many Ventura County firms must offer more than a competitive wage to recruit skilled employees.

New Problem

Wrestling with the high cost of housing is a relatively new phenomenon for Ventura County businesses. Many originally fled here because it was less expensive than metropolitan Los Angeles.

GTE California, for instance, relocated its corporate headquarters from Santa Monica to Thousand Oaks in 1985 because the area “offered a broader range of housing prices from moderate to expensive,” spokesman Larry Cox said.

At the time of move, GTE offered relocating employees who lived at least an hour away cash payments of as much as $5,000 plus payment of closing costs on the new homes and the mortgage differential.

Last year, when GTE evaluated sites for its new telephone operations headquarters, it considered the Westlake and Thousand Oaks area but eventually chose Texas.

“The cost of affordable housing here was certainly a consideration,” Cox said.

Patagonia Inc., a manufacturer of outdoor clothing, relocated its bustling mail-order division to Bozeman, Mont., in 1988, in part because housing costs made it difficult to recruit entry-level workers, a spokeswoman said.

To be sure, the lure of the mountains also played a role. But consider the experience of Libby Frishman, an employee trainer who traded a two-bedroom house in Ventura County for a four-bedroom house in Bozeman that is “twice the house for half the money.”

“Up here if you spend $120,000 on a house you have a sensational, elegant place with stained-glass windows, lots of room and hardwood floors,” Frishman said.

Businesses Concerned

While neither GTE nor Patagonia made their decisions solely on housing prices, Ventura County’s business community is nonetheless alarmed. And they see ominous implications for the county’s tax base.

“We are losing major industry . . . because they can’t afford the housing prices here,” said Golden, of Continental Land Title, who is also president of the Ventura County Economic Development Assn.

Ventura County Supervisor Madge Schaeffer said companies have complained repeatedly to her about the lack of affordable housing.

“It’s become more and more difficult for employers to find housing for middle management when they move into the community,” she said.

Business leaders say the answer may lie in a joint effort by business and government.

They can look to New Jersey for inspiration. The Garden State expects to pass a law this year that offer companies a $1 tax incentive for every $3 they spend on employee housing benefits, said Schwartz of the Affordable Housing Institute, who is also a New Jersey state assemblyman.

Increased Stability

Schwartz said that home ownership increases employee stability and eases financial worries, which in turn raises productivity. Helping employees buy homes is also cheaper than paying exorbitant wages to retain them or relocating offices to low-cost housing areas.

“Employee-assisted housing is the solution to America’s moderate-income housing crisis. If employers don’t do it, who will?” Schwartz asks.

Clearly, the idea is catching on nationwide.

A 1984 survey of 600 large companies by the Employee Relocation Council found that 85% offered relocation assistance such as mortgage differential payment, home buying and selling services, moving expenses and bonuses to defray the incidental expenses involved in starting anew.

Such benefits do not come cheap: Since 1980, the average cost of relocating a managerial employee--including house-hunting trips and moving--has jumped from $12,800 to $37,000, according to Runzheimer spokesman Kenneth Groh.

$20 Billion Annually

Nationwide, companies spend $20 billion annually in housing benefits, according to figures supplied by the Affordable Housing Institute. But so far, only $2.5 billion of that goes to help lower-echelon employees.

Indeed, many corporate relocation programs are structured to help managers and current homeowners, although the benefits are slowly trickling down the ranks as the housing crisis grows more acute.

In Ventura County, where things are already acute, many war stories echo that of a senior civil engineer from Los Angeles who recently interviewed for a job at the Ventura County Regional Sanitation District.

The engineer, who is still job-hunting and did not want his name used, was willing to consider a $600-per-month pay cut to move his family out of congested Los Angeles.

But he changed his mind after dropping into a local real estate agency to inquire about housing prices.

“I stopped for a sandwich and got right on the next on-ramp,” he said ruefully.

VENTURA COUNTY HOUSING

Average Price of Single-Family Home

Area 1985 1988 Simi-Valley / $124,923 $193,141 Moorpark Conejo Valley $178,979 $280,876 Oxnard $120,711 $203,956 Ventura $130,787 204,286