The high cost of homeownership is making it difficult for many companies to attract and retain employees.

That’s why approximately 90 employers in Baltimore, ranging from large corporations to small local outfits, are participating in the Live Near Your Work program, which helps first-time buyers purchase a home close to their jobs. It has the added benefit of reducing traffic, cutting gasoline consumption, and creating strong, diverse neighborhoods, according to Michael Guye, acting director of the city’s Office of Homeownership.

The program provides a minimum $2,000 grant to help first-time homebuyers with their settlement or closing costs in targeted neighborhoods near their work. In general, the city provides $1,000 per employee, which is matched by participating employers. Approximately 2,100 families have benefited from the program since its inception in 1997, including 142 in fiscal year 2005.

Participating employers include prominent medical centers, colleges, banks and nonprofit organizations.

Live Near Your Work is one of a dozen efforts highlighted in Affordable Homes: Best Practices for America by the Homeownership Alliance. Released in late 2005, the report identifies some of the best homeownership programs offered in the nation’s largest cities, many of which have the highest home prices in the country.

The term “best practices” isn’t meant to imply that there’s no need for further innovation. Instead, the new report is meant to provide a basic framework for success, said Camden Fine, chairman of the Homeownership Alliance, a Washington, D.C.-based coalition of nearly 20 housing and community organizations.

Fine described homeownership as a powerful tool for creating individual financial security as well as a building block for economic stability for a city. The highlighted programs, he said, offer solutions from both the demand side as well as the supply front.

In Seattle, for example, the city’s Office of Housing and the Washington State Housing Finance Commission (WSHFC) have teamed with House Key Plus Seattle, which offers first-time buyers loans at below-market interest rates. The program began in 2004, when the agencies combined $800,000 in city HOME funds with $600,000 in WSHFC investment funds, creating a $1.4 million pool for downpayment assistance. Since its start, the program has provided an average assistance of $40,704 to 71 homebuyers.

The two agencies have continued the funding. House Key Plus targets families earning no more than 80% of the area median income (AMI), but some families earned less than 60% of AMI, according to Lisa DeBrock, manager of the homeownership division at WSHFC. The average home price has been about $193,000, whereas the citywide average is roughly $350,000. The Baltimore and Seattle programs are solutions aimed at assisting buyers.

Other cities are tackling the problem from the supply side. Best Practices cites Chicago’s Affordable Requirement Ordinance, which requires residential developers that receive discounted city land or financial assistance to set aside a portion of the units as affordable housing.

Since its passage in 2003, the ordinance has created 598 units of affordable housing, and it is expected to create about 700 additional affordable units in the next three years, according to the report. Chicago also has the Downtown Affordable Housing Density Bonus Program, which offers developers additional buildable square footage in downtown zoning districts in exchange for either providing affordable units or making a financial contribution to be used for affordable housing.

Fine, who is president and CEO of the Independent Community Bankers of America, said he hoped that the Alliance will examine smaller jurisdictions in the future for even more ideas.

He noted that the latest study comes at a crucial time as Louisiana, Mississippi, Texas, Florida and other areas recover from the 2005 hurricanes. “There will be a massive need for affordable housing in the Gulf States,” he said. “This study can hopefully be used as a guide for those cities and local governments as they rebuild along the Gulf Coast.”

A 2005 Homeownership Alliance poll found that the high cost of housing was placing significant pressure on families. More than half of the respondents were concerned that the cost of housing would force their children to attend inadequate schools. Nearly half were considering leaving the area where they lived in order to afford desirable housing.