In housing, tech employees get yet another advantage

Tech employees already get free food, free dry cleaning and free beer. Now, they also get deals on housing.

New hires at Google and other Silicon Valley companies are often offered home loans with no money down and a host of other financial planning services, Bloomberg reported this week.

The help for tech employees buying houses, of course, is taking place in one of the least affordable and most competitive housing markets in the country.

And if people in the tech industry need this much help buying a home, it's hard to fathom how difficult it must be for everyone else.

"Basically what this does is add more competition to an already stressed housing market," said Peter Cohen, the co-director of San Francisco's Council of Community Housing Organizations, an affordable housing group. "These are buyers who have a leg up. They're able to outcompete other folks looking for housing who don't have that kind of advantage."

The loans, targeted toward Silicon Valley workers, finance homes at 100 percent with no money down. Through the San Francisco Federal Credit Union, homes valued up to $2 million are eligible. The median home value in the area is just above $1 million.

It's an interesting approach to a problem that affects Silicon Valley workers as well as employees in other industries. Not only is the Bay Area housing market expensive, there just isn't enough housing to go around. Even high earners in the tech industry have trouble buying a home amid intense competition and down payments of $200,000.

"The whole thing highlights how crazy a housing market we have," said Kevin Zwick, the CEO of Housing Trust Silicon Valley, which provides loans and grants to help first-time home-buyers with down payments. "Without more homes for people at all income levels, tech companies and others have to move to pretty out-of-the-box thinking like this, offering programs that are hard to replicate for working families."

Housing Trust Silicon Valley gives down payment loans for those first-time homebuyers in need of affordable housing, a category defined as a family of four making up to $120,000. Many of the Bay Area homebuyers who take advantage of its programs are teachers, public employees, nurses and even some tech workers on the lower end of the income spectrum.

For those buyers, a zero-down loan like the ones available to new Google employees might not even be a solution to their problems in the housing market. Zwick said he encourages all home buyers in the income brackets he works with to put money down on a home to provide a measure of stability in case of a layoff or dip in housing prices.

That's generally solid advice for anyone, but some higher-income homebuyers might have other cash reserves to protect them from swings in the economy, making a zero-down mortgage a less risky proposition.

Despite the question of their actual benefit, these loans are an option available to only certain buyers. Even if a new Silicon Valley transplant doesn't choose to go with one of these tailored loans, the choice is there in a way that isn't extended to, for instance, teachers and nurses also trying to buy homes in the area.

"It's a competitive advantage," Cohen said.

And until San Francisco, Silicon Valley and even tech companies build more homes for both buyers and renters, it's an advantage, and a problem, that won't go away.