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NEWS RELEASE

02/07/94

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Improvements due in faculty housing programs

Faculty members may find it easier to finance home mortgages as a result of changes in housing policies announced at the Faculty Senate on Thursday, Feb. 3, by Provost Condoleezza Rice.

Responding to presentation of the long-awaited report of the Committee on Housing Policies and Programs, Rice said several of the committee's recommendations were rejected for budgetary and other reasons, but these are being implemented:

  • A graduated-payment loan program is being established to help faculty refinance university-backed loans and conventional first mortgages.
  • A low-equity, limited first mortgage program is being established to help those whose houses have declined in value to refinance at current low rates.
  • The Housing Office will be allowed to annually adjust the starting payment and interest rates on university-backed loans to reflect changes in the commercial market.
  • The university is offering its housing loans at the lowest possible end of the competitive market range.
  • The Housing Allowance Program, which provides a housing purchase subsidy for new faculty, will be revised upward for assistant professors.
  • The university will give strong consideration to faculty housing needs in initiatives such as Stanford West, the proposed housing development on Sand Hill Road between Oak Creek Apartments and the old Children's Hospital.
  • A permanent faculty housing committee will be established because of the importance of housing programs to the well-being of the faculty, Rice said.

Presenting the committee's report, chair Gavin Wright, economics, said that the high cost of housing in the Bay Area continues to put Stanford at a competitive disadvantage in faculty recruitment and retention, with local prices 25 percent to 100 percent higher than for similar housing at Princeton, Harvard, Yale, Chicago and other top universities.

The committee was appointed by former Provost Gerald Lieberman in February 1993 to review and evaluate the university's housing benefits program and make recommendations about future directions. It reported back to Lieberman and to Rice as provost- designate in July.

Rice rejected a proposal to extend the Housing Allowance Program to new faculty members who choose to rent, saying an estimate put the annual cost at $1.5 million. She said she was "reluctant in principle" to allocate university funds for rental purposes, preferring instead to increase the stock of affordable housing near campus.

To a suggestion that the university allow a second use of the allowance program when a faculty member is awarded tenure, Rice said the projected cost of $2 million per year made it impossible now, but the idea could be reviewed in a couple of years when the budget situation is better understood.

Wright told the senate that his committee favored expanding the existing 15-mile radius from Stanford for which a housing allowance subsidy to purchase dwellings is allowed.

Rice responded that expanding up the Peninsula to San Francisco would significantly change the program's current parameters, which are tied to median housing prices. This would result in all participants receiving only about 60 percent of what they currently get.

The 15-mile radius "establishes the limit in which a subsidy is needed," Rice said. "We're not disadvantaging people who choose to live outside" the limit.

Rice said that a tiered allowance program was considered that would define a core zone similar to the 15-mile area and two outer zones with lower allowances. While initially appealing, she said, the idea was rejected as administratively cumbersome - the housing office has lost half its staff to budget cuts in recent years - and unnecessary. Of the six exceptions granted to the 15-mile rule last year, all were for senior faculty.

Serving on the committee with Wright were Professors John Boothroyd, microbiology and immunology; Alexander Fetter, physics; Jay Fliegelman, English; Joseph Grundfest, law; Ron Kopito, biological sciences; Paul Robinson, history; and Mark Wolfson, business. Serving ex officio were Geoffrey Cox, vice provost for institutional planning; Robin Kennedy, associate university counsel in the legal office; and Carolyn Sargent, director of the faculty/staff housing office.

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