“Los Angeles is facing an unprecedented housing crisis, which threatens our legacy as a city of economic opportunity. Our county has one of the nation’s greatest disparities when it comes to what people pay in rent, and what they take home in wages.” -Housing | Office of Los Angeles Mayor Eric Garcetti
As Landed’s Southern California Relationship Manager, it is against this backdrop that I work to help our customers access Landed’s down payment program and services. We aim to level the playing field for educators without access to the proverbial ‘bank of mom and dad’ to be able to overcome the hurdle of saving for a down payment on a home. It’s encouraging to see data on our program indicates we’re making strides toward democratizing who can access homeownership, which is crucial to racial equity and thriving, safe communities.
Landed's down payment program invests alongside employees in education to help them reach a 20% down payment. Landed's funds, up to $120,000 per household, come in the form of an equity investment, meaning that homebuyers share in a portion of the gain–or loss, if any–of the value of the home once it's sold or refinanced. And now that we’ve been helping educators in the LA area purchase homes for a couple of years, we are able to share data demonstrating the impact Landed’s shared-equity down payment program is having on educators, students, and the LA area community.
Educators who have worked with Landed in LA have bought over $17.9M worth of homes, amassing over $900,000 of wealth through homeownership. Given that the average Landed educator has only been a homeowner for a year, this represents approximately $33,000 of wealth gained per year per customer – the equivalent of receiving a $45,000 salary increase.
Equally as important as helping educators build financial security is ensuring we can keep good teachers in our LA classrooms. Educators who buy homes with Landed are expected to leave education at a meaningfully lower rate than their peers, which is important for driving student achievement and for saving school districts’ limited resources.
For every home we help an educator purchase, we can help school districts save up to $22,000 by preventing turnover costs for an employer and mitigating the negative impact turnover has on student achievement. In all, Landed estimates that the districts and counties we support currently have staff turnover rates between 13 and 25 percent, meaning that the average staff member stays only five years. Whereas, according to Landed’s post-home-purchase surveys, educators supported by the company’s down payment program plan to remain educators for an additional 13 years, resulting in an expected annual turnover rate of 7.7 percent. When asked how long they would have stayed if they hadn’t been able to buy a home, respondents answered 3.5 years.
For educators, being able to stay with a district because they can establish homeownership roots instead of trying to stay ahead of rising LA rents benefits not only the district and the students they serve, but also the families of the educators we serve.
Toby Harwell, a music teacher for the Wiseburn Unified School District, is one of those educators. After a divorce, Toby found himself renting for the first time in his adult life. He wanted to be able to keep his children in their school district, but being a solo purchaser was forcing him to look in neighborhoods where he didn’t want to live.
“From the moment I did research into Landed, I realized that I didn’t have to rent. I was looking in areas I didn’t want to live in and where I didn’t want my kids to grow up,” Toby said. “Working with Landed meant I didn’t have to sink all of my assets into a down payment, but could invest in renovations to make the house into a home and give my kids a better life.”
Everyone starts out from a different place along the homebuying journey. Some people are first-time homebuyers, others may be starting new families, while others are reimagining existing ones. No matter where an educator is in life’s path, when they are ready for homeownership, Landed can help.
“Buy a home. People think they can time a market, but if you can keep your family in the neighborhood where they belong, it’s one of the biggest no-brainers that I know of,” Toby said.