Cities paving path to homeownership with cash

While lack of affordable housing remains a challenge in the U.S., some communities see the potential in an evolving work environment and other emerging trends, which could attract residents looking for a new home.

For members of Generation Z in search of the American dream, their path toward homeownership could be made smoother thanks to a number of such cities and towns inviting new arrivals with incentive programs that encourage them to plant roots. 

While it didn't begin with Covid-19, the shift toward remote work led to widely reported waves of migrations away from pricey markets during the pandemic, creating momentum for incentive-backed relocation programs.

In Topeka, Kansas, which previously offered an option for remote professionals, the draw for many was lower costs in the state's capital city, which was instrumental at bringing in applicants. 

RELATED: Can 'house hacking' help Gen Z afford homeownership?

"We have a really good quality of life here, and so we really wanted to promote that as well and try to grow our population," said Trina Goss, director of business and talent initiatives at GoTopeka, the city's economic development organization.

Topeka's program saw close to 2,000 applicants over the two-plus years it was open, with many hailing from more expensive states, including California, Colorado and New York, Goss said. 

"The cost of living was huge," she added. 

With programs ranging from remote-employee recruitment to business-backed ventures aimed at bringing in talent or entrepreneurs, communities are not only dangling cash to entice potential new transplants. The perks, in many cases, also include down payment or other types of home buyer assistance, which can go far in many areas where housing prices come in well below the national average. At the same time, communities expect to see an economic boost from their new residents.

Initiatives meant to appeal to professionals hoping to relocate, often geared toward the growing work-from-home labor force, appeared well before Covid-19 put the concept in front of the American public. But the pandemic played a hand in leading many to recognize that career advancement could coexist with a remote-work lifestyle and drove migration trends across the country. 

While the majority involve cash grants, some local programs spotlight the potential for homeownership opportunities in their marketing. Tulsa, Oklahoma, which first established a remote-worker initiative in 2018, offers to disburse its $10,000 award in a single lump sum instead of installments for grantees purchasing a qualifying home within city limits. Since 2021, participants have taken advantage of the homeownership initiative, with buyers ranging from Gen Z to baby boomers. 

In their efforts, program developers are likely to see an interested customer base among Gen Z, who have consistently said they aspire to buy a house in their lifetime. A 2022 study from research and advisory group Gen Z Planet found 87% of consumers born between 1997 and 2012 aspired to become homeowners, with a clear majority viewing real estate as a good investment to accumulate wealth. 

And as more cities come up with their own programs, some are opening up the opportunities beyond just work-from-home employees.   

For economic leaders in Jackson, Michigan, their approach to attracting residents is as much an opportunity to introduce affordable homeownership while alleviating scarce housing supply at the same time. Through its recently launched 100 Homes program, which runs through 2026, Jackson expects to award $25,000 to each qualified candidate to help them purchase newly built units throughout the city. 

While other business and housing groups in the state offer down payment assistance or land development programs, the central Michigan city saw an opportunity to combine both in order to address affordable housing issues, said Cory Mays, grant coordinator for the City of Jackson.

"We're developing a list of qualified buyers, which builders will use to build the homes. We've facilitated the construction price. We facilitated the entire project, whereas other communities have only done one or two pieces," he said.

Unlike other relocation-based opportunities, the 100 Homes program puts no restrictions on the employer or hometown of applicants, opening homeownership to in-state buyers as well. Since launching in October 2023, the program has already garnered 246 applications for the 100 planned units.

"You can be a current resident. You can live outside of the city. You can be a first-time home buyer, you can be a fourth-time home buyer," Mays said, while adding the new houses must be owner occupied. 

"If they stay in the home for five years, they walk away with the equity."

Apart from doling out money and benefits, other communities are also partnering directly with local employers to attract new arrivals — and help move them into homes. The intent, in addition to improving the local economy through population growth, is to bolster the local workforce. 

In the ChooseTopeka program, the local business development community chose to partner with local employers to offer newly hired eligible participants up to $15,000 in housing assistance. Half of the amount is reimbursable to companies after one full year of employee retention. 

"Our employers were really struggling with finding talent. And we wanted the ChooseTopeka program to support our employers," Goss said. 

After sunsetting its remote-worker incentive option, the city developed similar programs for military veterans and returning, or "boomerang," Topekans, with local homeownership a requirement for grant funds.

"We want them to purchase a home because we want them to stay," Goss said. "That shows they're not just going to come and live here temporarily."

The monetary incentives offered in many regions where available will also give new residents a head start toward significant home equity accrual, especially when combined with existing down payment programs.

According to Zillow's home value tracker, the average property price nationwide in early January was $346,048. By comparison, the mean values in Jackson and Topeka were approximately half the national average, at $169,202 and $173,247, respectively.

Meanwhile, the number of these programs continues to grow, with newer initiatives introduced this decade proving to be highly competitive. Among the programs debuting since 2020 is an endeavor run through a West Virginia University collaborative, which attracted more than 7,500 applicants vying to move to Morgantown, home of the educational institution. With an ultimate acceptance rate of under 1% for its first cohort, eligible applicants came from all 50 states and more than 70 countries. Also offered in four other communities, the Ascend West Virginia program expects to bring 1,000 new residents to the state over six years with the offer of a $12,000 cash grant. 

At the same time programs that existed pre-pandemic, such as Vermont's now-closed statewide effort, reported favorable outcomes through new-resident recruitment. After launching its efforts  in 2018, the Green Mountain State welcomed 435 new workers and their family members, according to government filings.