In her dual job titles as the city’s new assistant city manager and director of public works,
Shohreh Dupuis knows she’ll encounter the unique challenges of a popular beach town. Experienced at working with regional transportation agencies, her first task will be the utility undergrounding project in Laguna Canyon and the growing traffic congestion on the city’s small streets, she said.
With at least one hurdle that confronts most residents, she will receive help. Dupuis is one of four City Hall executive administrators getting assistance from their employer to buy a home in town, said Gavin Curran, director of finance and information technology.
And that’s a big help, especially in a city that ranks second highest for median home prices in Orange County, according to Core Logic property information company and Oscar Wei, senior economist for the California Association of Realtors. Corona del Mar ranks first.
“I am grateful for the home equity-sharing program since it makes living in Laguna affordable for me and my family,” said Dupuis, who will receive city assistance in buying a $1.7 million home.
Dupuis formerly worked in Irvine as deputy director of public works and still lives in Anaheim Hills, about 30 miles from her new job. The position in Laguna is a step up, she said, and the home equity-sharing arrangement provided a persuasive incentive. Irvine does not offer employees a home equity-sharing option, said Craig Reem, Irvine’s director of public affairs and communication.
The purpose of the employee incentive is to ensure that key employees are close enough to respond quickly if there’s an emergency, said City Manager John Pietig.
In the fire department, for example, the chief is not required to live in town, but their second in command, division chiefs, are expected to live close by as part of the city’s initial emergency-response plan, explained fire Chief Jeff LaTendresse, who’s been fire chief for almost three years. He took advantage of the equity-sharing program when he was a division chief.
Because they rotate on-call responsibilities, fire division chiefs are expected to live not more than 12 miles away or move into town through the housing assistance program, said Pietig. Mandating participation in the program for other employees could “severely limit the candidate pool,” Pietig added.
Dupuis, who started working for the city on May 2, said a house costing $1.7 million – slightly below the $1.8 million median sales price in Laguna as of May 1 – will suit her family’s needs, according to Curran’s report to the City Council last month.
The city adopted the Essential Employee Housing Assistance Program in 2000, recognizing higher home prices here that have only gotten costlier. Under the program, the city will assist Dupuis by co-owning the house up to $850,000 and offering a 20-year direct loan of up to $450,000 to help her finance her half. The total cost to the city is $1.3 million, Curran reported. The city will reap a return on its home equity when the house is eventually sold.
Under the housing assistance program, six city employees have benefited from the co-ownership and direct loan program in the last 16 years, Curran said. Even though each case is considered individually, the city has typically paid half the home price and half the closing costs, he said.
Currently, Dupuis, Pietig, LaTendresse and Battalion Chief Tom Christopher purchased homes under the home-equity program, Curran reported. Former Fire Chief Mike Macey participated when he was a division chief, he said, and Pietig and former water quality supervisor Graham Wright participated in the direct loan program.
Steve May, Dupuis’s predecessor as director of public works, said it wasn’t necessary for him to live in Laguna.
“I had people on staff who could respond to sewer spills and storm drain problems,” he said. “They needed to be able to get there very quickly, but not so much me. I was able to communicate by cellphone or radio, if it was necessary, “ said May, now San Juan Capistrano’s director of public works and utilities, and a 22-year Huntington Beach resident.
Dana Point and Newport Beach also have offered similar equity-sharing arrangements, but only to city managers. Dana Point City Manager Doug Chotkevys said Tuesday it was his idea. “Before I got here, Dana Point went through a city manager every 18 months,” he said. To do the job right, he said he needed to live in town and asked for help. The city split the equity of a home with him. After a few years, he refinanced and bought the city out, he said.
Newport Beach offered previous city managers an equity-sharing benefit when the city charter mandated residency. That requirement was lifted when voters approved charter changes in 2010, city spokeswoman Tara Finnigan said.
Home-equity sharing is an atypical employee benefit. It’s not even included as a question on the most recent compensation survey conducted among members of the International City/County Management Association.
“Employers do have to be creative in the current job market,” said Shannon Drohman, a principal of Compenstion Connection in Seattle, which advises several Washington state cities on benefits. “I have not seen employers do this in either the private or public sector,” Drohman said. More typical are relocation expenses and monthly housing allowances of up to $4,000 a month for upper level leadership, she said.
According to Dupuis’s agreement with Laguna, she will contribute a 20-percent down payment toward the purchase price. The city and Dupuis will split closing costs, property taxes, insurance and capital improvements. Dupuis will pay interest on the direct loan that’s slightly higher than the rate of return on the city’s investment portfolio, or a range of 2 to 5 percent, according to the staff report.
The city expects to fund its half of the purchase from the sale of two homes it already co-owns, according to the report. LaTendresse’s home at 1044 Noria Way in Arch Beach Heights is now on the market for $1.7 million. The other at 1419 Regatta Way in Bluebird Canyon is owned by former water quality supervisor Wright and priced at $1.5 million.
LaTendresse said he’s downsizing, not retiring, and isn’t sure yet where he’ll end up. “We’re empty-nesters and so it’s just a big house,” he said. If he buys in town, the city has again offered to split the price, he said. “The city has made the agreement available to me if I decide to stay,” he said.