HARTFORD, conn. — Chicago native Juan Hernandez fell in love with Hartford while attending Trinity College and decided to stay after graduation. But like many members of the millennial generation, he’s learned that affording a place to live can be an expensive proposition.
Hernandez and his girlfriend pay $1,600 a month to rent a one-bedroom apartment. The grace period for his student loan payments expires this month.
An aide to a city council member, the 25-year-old Hernandez plans to attend law school eventually. While he thinks it might make more financial sense to buy a home in Hartford, Hernandez is questioning whether he can qualify for a loan.
“If you’re not working on Wall Street, how are you going to come up with that down payment?” said Hernandez, who considers himself lucky to have earned bachelor’s and master’s degrees with only about $15,000 in outstanding student loans. “I know people who graduated with $20,000, $40,000, $50,000 in loans. To be completely honest, most of them went back home.”
Realizing that millennials like Hernandez are burdened with debt, a difficult job market, weak wage growth and a less affordable housing market than their parents, some states are looking to keep educated young professionals within their borders by helping out with their housing costs.
Initiatives like mortgage down-payment assistance, rent subsidies, urban homesteading incentives, partial student loan reimbursement and even “millennial villages” are being considered across the country to help professionals put down roots in communities.
Some programs already in place are being embraced by members of what has become a coveted population because of their sheer numbers, education levels and ability to spur urban revitalization and economic growth.
The first phase of Maryland’s “You’ve Earned It” program ran out of money in less than two months because of demand. Now in its second phase, the program provides a discounted mortgage rate and down payment assistance to college graduates with more than $25,000 in student debt and who buy a home in certain regions of the state.
“Kids are struggling because they spend all this money on their education and then when they come back out to the real world, the jobs they get only pay $30,000, $40,000,” said Hartford state Rep. Angel Arce, who would like to create a similar program in Connecticut.
Some cities are using targeted marketing. Columbus, Ohio, bought ads in Washington, D.C., subway stations last year to attract young professionals, highlighting the lower cost of living.
A few years ago in Niagara Falls, N.Y., city officials began offering up to $7,000 in student loan reimbursement to encourage young professionals to move downtown.
Rhode Island’s new Ocean State Grad Grant program makes awards for mortgage down payments to recent college graduates. Recipients can get 3.5 percent of their first home’s purchase price, up to $7,000.
Travis Escobar, 25, president and co-founder of the Millennial Professional Group of Rhode Island and a 2013 graduate of Rhode Island College, said the incentive will help encourage young professionals to stay in Rhode Island, where the average student carries about $30,000 in debt.
Homeownership seems impossible when you’re living on your own, often underemployed and making student loan payments, he said.
“Buying a house? You’re not thinking about that,” said Escobar, who lives in Providence, R.I.
