Included in Gov. Andrew Cuomo’s statewide goodies tour last week was an intriguing proposal to help stop college grads from leaving the state and to encourage upstate home ownership at the same time.
The governor’s proposed “Graduate to Homeownership” program would use low-interest loans, assistance with downpayments, and home-buyer education courses to encourage “recent college graduates” to buy homes in “upstate New York’s downtown areas.”
The proposal rightly attempts to address several problems facing upstate New York’s economy, and therefore is worth exploring.
One such problem is brain drain — young people getting degrees from New York colleges and then taking their skills and economic power to other states.
Another issue it addresses is providing upstate businesses with a skilled workforce. Many employers report not being able to fill high-skill jobs, in part due to our high cost of living.
Incentivizing grads to stay in New York could help provide taxpayers a return on their investment in education. Taxpayers pay for public education and subsidize state colleges, but lose out on the economic return when the graduates buy houses and cars and raise families and shop elsewhere.
As usual with the governor’s generous spending ideas, the devil is in the details.
His press release doesn’t define the “upstate downtown areas” where grads would be eligible for the incentives, nor does it say at what ages people would be eligible, how long they’d have to stay, or how much the incentives would be.
Are the incentives even targting the right audience? How likely is anyone fresh out of college going to be looking to buy a home, and therefore likely to be enticed by such an incentive? Wouldn’t the incentives be more effective if they targeted grads who’ve been out of college for a few years and might be at a stage in their lives where they’re more likely to be in the market?
As worthy as it might be, the incentive should only be considered one tool in a more comprehensive initiative.
Graduates are only going to stick around if there are jobs available.
If young people can’t afford New York’s notoriously high taxes, they’re not going to buy a house, no matter what kind of break they get.
A major factor in the ability of young people to afford a mortgage is college loan debt — which goes to the need for the state to reduce the cost of college and to come up with creative, less expensive loan payback arrangements.
Making upstate areas more attractive to recent college graduates is a worthy goal. And at a modest $5 million of seed money, the governor’s pilot program is worth trying.
But incentives will only work if the state addresses the other factors as to why young college graduates leave the state.
No one’s going to be enticed to buy a home if they can’t afford to live in it.