A plan for mitigating the high cost of housing for faculty members was proposed at the faculty's monthly meeting on March 16.
Provost Robert Brown and Associate Provost Claude Canizares presented a redesigned faculty-housing program that would significantly enhance the current Housing Assistance Loan Program. Faculty members who bought area homes during or after July 2000 would be eligible for the program, which would provide low- or no-interest loans.
In recent years the ratio of median housing price to average MIT salary for associate professors has spiked, making it hard to recruit and retain faculty, Brown said. Two committees were convened to discuss and dissect available options. The first committee reported in the summer of 2003, but its recommendations were tabled after budgetary issues surfaced.
Last summer, a second committee convened. Taking the recommendations of the first committee into consideration, the Ad Hoc Committee on the Design of the Faculty Housing Program developed the plan. Canizares noted that this proposal cannot be implemented until it has been reviewed by the administration and the corporation.
"We wanted the changes to be affordable, attractive and equitable," Canizares told the roughly 75 faculty members who attended the meeting. Under the proposed plan--a "significant enhancement over the current Housing Assistance Loan Program (HALP)," established in 1986--newly hired or recently tenured faculty would have four years of eligibility. In the first year, the eligibility would extend to July 2000. It would be "a one-time benefit," said Canizares.
For senior faculty, the plan would allow for a tax efficient, minimum interest, second mortgage program to assist recently tenured faculty in purchasing a home. The interest rate would stay locked at the lowest rate the IRS allows, currently around 4.5 percent. The up to $300,000 loan is payable over 30 years.
For junior faculty, many of whom will be first-time homebuyers, there are two programs available. There is a tax efficient, minimum interest, 10-year loan for $50,000 to help in the purchase of an approved residence. Additionally, there is a no-interest loan of up to $50,000 that can be used to help junior faculty members make a downpayment on a qualifying property. The money is repaid over a period of five years, with one-fifth of the principal due on each anniversary.
Qualifying property has to be within a 50-mile radius of MIT and must be the faculty member's principal residence. The money can be used for major renovations to an existing home, but is generally for purchase, said Canizares.
For all loan programs, the entire balance of the loan is due upon sale of the property, purchase of a second residence or the date on which a faculty member leaves MIT.
"We feel we are offering a very competitive program," said Canizares when one faculty member asked how the program compared to other institutions' programs.
"We will have as good a stated program as any institution in the country," said Brown. The documents on the proposal will be available online 30 days for MIT faculty review and input.
Also on March 16, the faculty unanimously approved the S.B. in Mechanical and Ocean Engineering and heard from the Graduate Student Council (GSC) on the state of graduate student advising. The GSC revealed the results of the 2004 graduate student survey that garnered 50 percent participation.
Though two-thirds of graduate students are satisfied with the resources available on campus, and 85 percent are pleased with their advisors, the GSC is hoping for some improvements: greater publicity for available resources and a closer relationship with advisors for the15 percent who found their relationship lacking.
"One of the things graduate students face is our short time span," said GSC Vice President Hector Hernandez. "We need to make sure [this effort] carries on."