January 2008

Dear Colleague:

In May, I announced creation of a pilot program to enable faculty being recruited to Columbia to purchase a home or apartment in the New York metropolitan area rather than to rent in the Columbia stock. At this time, I am pleased to announce expansion of the pilot housing assistance program to include faculty currently residing in the larger Columbia apartments (two bedrooms plus a maids or larger).

If you wish to move outside of Columbia housing stock and purchase an
apartment or house in the metropolitan area for your primary residence, you
would receive:

● a one-time payment of $40,000 in additional compensation to assist with the purchase (e.g., for closing costs, renovations, buy down points, mansion tax, etc.)

● an annual payment in the form of additional compensation ($40,000 – tenured faculty; $22,000 - non-tenured faculty)

Those wishing to rent outside of the Columbia housing stock would receive:

● a moving allowance of up to $3,000 based on an estimate from a mover

● annual payment in the form of additional compensation ($40,000 – tenured faculty; $22,000 - non-tenured faculty)

A full description of the features of the expanded program is attached. Pending the recruitment of a University housing advisor, requests for additional information can be directed to Scott Norum (Arts and Sciences) or Roxie Smith (graduate professional schools).

If you are interested in exploring this opportunity, please contact your dean who is responsible for approving applications for those interested in the program. This expanded pilot is scheduled to end on June 30, 2008. At that point, we will assess the results to determine whether or not the program should be extended, revised or discontinued. All commitments made prior to that date will of course be honored even if the closing or moving date falls after June 30th.

Sincerely yours,

Alan Brinkley

Enclosure:
Description of Expanded Housing Assistance Pilot

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The Columbia
Expanded Housing Assistance Program

A Pilot Program

[As of 01/14/08]

For many years, Columbia has served the housing needs of its faculty by providing University-owned apartments for lease. The University will continue to do so and will continue to expand our stock of apartments when possible. But members of the faculty should also have other options, and so a two-year pilot program is being launched to help professorial-rank faculty purchase homes in the New York metropolitan area. This program can also be used on a temporary or long-term basis for renting. Here are the features of this new, experimental program.

What is the purpose of the program?

Faculty should have the opportunity to invest in the private housing market as an alternative to living in Columbia-owned housing. This could have significant short-term and long-term financial advantages for individuals and families. It is also hoped that the program will reduce demand for University housing and increase availability for faculty for whom purchasing is not attractive.

Who is eligible?

Professorial rank faculty who are eligible for University housing are also eligible for the housing assistance program. Eligibility, however, is not an entitlement, just as is currently the case for University apartments. Deans will continue to decide whom to recommend for the program, and the same priorities that determine access to University apartments will also shape access to the housing assistance program. For example, faculty who already live outside the Columbia system have a low priority for access to University housing, and they will have a low priority as well for the housing assistance program. Faculty participating in the program may not occupy a Columbia apartment at the same time. For families that include more than one faculty member eligible for University housing, the benefits under this program will be determined by the faculty member with the higher faculty rank.

What assistance is the University providing?

The University is providing two kinds of assistance to faculty participating in the program: (1) an annual housing supplement and (2) help in acquiring a favorable mortgage.

(1) The University will pay an annual housing supplement to each participating
faculty member. The supplement will be $40,000 a year for eligible tenured faculty members and $22,000 a year for eligible non-tenured faculty members. (Participating non-tenured faculty members who are later promoted to tenure will see their housing supplement automatically rise to the level of tenured faculty participants as of the effective date of tenure.) These payments will begin with the first regular payroll check for a newly-appointed faculty member or will come in the paycheck in the month following vacating one’s Columbia apartment in the case of a current faculty member. For faculty members vacating University housing, all rent due must be paid before recurring housing supplements begin. Payment will continue until participating faculty leave the University, move into Columbia housing, or retire. Retired faculty will continue to receive the payments for three years after retirement. Surviving spouses will receive payments for three years after the death of an active faculty member. Surviving spouses of a retired faculty member will receive the remainder of the three-year, post-retirement commitment.

The housing supplement will be taxable income (although, if used to pay mortgage interest, much of it may be deductible). The housing supplement will not be considered in the calculation of University pension contributions or other benefits.

(2) Columbia will offer participating faculty access to loans at a favorable rate thanks to special relationships Columbia has established with two commercial loan providers. The extent of the mortgage rate reduction in any individual case should be explored with the participating lenders, because reductions will depend on such factors as credit rating and the size of the loan. Such loans, once provided, will belong to the faculty member and will follow the faculty member (or his or her heirs) regardless of any change in status (e.g., resignation, retirement, or death).

The University will provide each participant in the mortgage program with a one-time supplement of $40,000 paid as additional compensation to assist with the purchase. This payment may be used for one or more of the following purposes: payment to reduce the interest rate for the life of the loan beyond the favorable rate referred to above; a down payment on the purchase price; payment of closing fees, mortgage recording taxes, transfer and title fees, “mansion” tax, or legal fees.

This one-time supplement, like the ongoing housing supplement described above, will be taxable income and will not be considered in the calculation of University pension contributions or other benefits. Some of the expenses associated with the mortgage (such as "points”) may be deductible.

Attachment 1: Procedures

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Attachment 1: Procedures

[As of 01/14/08]

The Columbia Expanded Housing Assistance Pilot

While individual circumstances may vary, the following notes should cover most transactions.

RECURRING ANNUAL $22,000 OR $40,000 SUPPLEMENT

Documentation required:
New faculty members need not provide any documentation. For those faculty members moving out of a University apartment, the recurring supplement will first appear in the month following the date the University apartment is vacated.

Method of Payment: The recurring supplement will be paid through payroll and added to the monthly paycheck beginning with the first month of employment (gross pre-tax amounts of $3,333.33 per month for tenured faculty, $1,833.33 per month for all others).

Tax Withholdings: The amount of taxes withheld from the paycheck will be based upon the combined total income, including base salary and the annual housing supplement. This amount will also depend upon the tax filing status and number of exemptions claimed on the W-4 form filed by the faculty member. Faculty members may want to update the W-4 form to reflect mortgage interest and other tax deductions that often result from home ownership. The payroll office will not make these calculations; faculty members should consult a tax advisor or one of the W-4 “withholding calculators” available on the web, such as the one maintained by the Internal Revenue Service:

http://www.irs.gov/individuals/article/0,,id=96196,00.html

LUMP-SUM $40,000 SUPPLEMENT

Documentation required:
As described above, the $40,000 one-time supplement is available only to faculty who purchase a primary residence in the New York metropolitan area. In the case of a newly-hired faculty member, this supplement will be distributed as soon as an individual has formally accepted an offer of a professorial-rank faculty appointment from Columbia University and signed a real estate purchase contract. For current faculty members, it will be distributed upon the signing of the real estate purchase contract. Copies of the signed offer letter and the signed purchase contract must be provided to the appropriate school business office to initiate payment. Current University apartment tenants must also submit a signed letter promising to vacate that apartment as soon as the new home is available.

Method of Payment: The lump-sum supplement must be paid directly to the faculty member as additional compensation. If a payment to a new faculty member is needed before the appointment start date, it will be paid as a separate check.

Tax Withholdings: The University is required by law to immediately withhold Federal, State, City, FICA and Medicare taxes at the following rates:

Federal 25.00%

NY State 7.35%

NY City 4.00%

FICA 6.20%

Medicare 1.45%

Total 44.00%

Therefore, unless the calendar year-to-date salary has already exceeded the maximum wage base for FICA withholding ($97,500 in 2007), the net proceeds of the $40,000 payment will be approximately $22,400 (56.00% of $40,000).