The high cost of housing in Orange County created an obstacle for the University of California, Irvine when it sought to recruit talented faculty and administrators. So state university leaders created a nonprofit that built a sprawling suburban development, dubbed University Hills, laced with nature trails, swept by Pacific Ocean breezes and boasting some of the state's top K-12 schools.
Homes there are sold below market rate, a boon for academics who couldn't otherwise afford to live in one of the nation's most expensive housing markets. But there is a cost: Strict rules on resales mean buyers will never see a fraction of the capital gains compared with if they had bought and sold on the open market.
Democratic Rep. Katie Porter bought a home in the faculty community in 2011, when she began teaching at UC Irvine's law school. She and her family have continued to live there since she was elected to Congress four years ago and took an unpaid leave from the university. Now, her opponent in the November election is calling Porter's continued residence in the faculty housing an "insider deal" because she no longer teaches at UCI. Porter's housing arrangement was first reported in an article by The Associated Press.
"Porter serves on the House Oversight Committee. It turns out the oversight needs to be on her house," said Scott Baugh, a GOP former state lawmaker. "Insider deals like this are what's wrong with Congress. She should have given up this taxpayer-subsidized housing benefit four years ago when she was elected."
Porter's campaign responded that she remains an unpaid employee of the university and is abiding by its rules about who can live in faculty housing.
"As UCI has acknowledged, faculty 'on approved leaves without pay remain UCI employees' and 'can maintain their home,'" campaign spokesman Jordan Wong said. "Like other UCI faculty members who have taken sabbaticals, fellowships and visiting professorships, Rep. Porter has applied for and been granted unpaid leave, pursuant to university policy."
Here's what voters need to know about Porter's housing situation.
—Where does Porter live?
University Hills, a housing development built for full-time faculty and other eligible employees that features 1,226 for-sale homes and 384 rental apartments. The development was created because the high cost of housing in Orange County made it difficult for UC Irvine to recruit. Roughly two-thirds of the university's faculty lives on campus.
Academic institutions in expensive housing markets across the nation have various programs to help faculty members afford homes, often with attractive mortgage packages. Some have faculty housing like UC Irvine, but University Hills, at more than 300 acres, is particularly expansive with many amenities.
—What sets the development apart?
The homes are sold at below-market prices determined by the Irvine Campus Housing Authority, a nonprofit that was set up in the 1980s by the regents of the University of California. Homeowners do not own their lots and pay a monthly land lease fee, neighborhood association dues as well as property taxes. Porter's land and homeowner fees add up to a couple of hundreds dollars a month, Wong said.
The housing authority stipulates that any home that is being sold must be offered to faculty, staff or the university, according to a housing authority document. Resale prices are capped well below market prices to help faculty and other university buyers, and to stop University Hills homes from being bought as "speculative investment vehicles," the document says.
Buyers can obtain mortgages from preapproved lenders or the UC Office of Loan Programs, which provides financing for up to 90% of a home's cost and does not charge points or lender fees. (University Hills buyers pay traditional closing costs.)
—What are the specifics of Porter's situation?
Porter was recruited by UC Irvine's School of Law in 2009. She joined a housing waiting list and delayed joining the faculty until housing became available in 2011. She bought a four-bedroom house that year for $522,645, according to the housing authority. At the time, the median home value in Irvine was $656,800, according to the U.S. census.
Porter's home was assessed by the housing authority in January of 2021 with a maximum resale price of $659,369, an increase of $136,724 over the purchase price. In July, the median home price in Irvine was nearly $1.4 million, according to Redfin.
"The resale price limitations preclude the homes in University Hills from serving as speculative investment vehicles," the housing authority document says. "For those University-associated persons whose principal objective in purchasing real estate is capital gain, it is strongly recommended that they consider acquiring a home in the unrestricted general marketplace rather than in University Hills."
—Hasn't Porter left the UCI faculty?
Porter was elected to Congress in 2018, and she took office in January 2019.
The congresswoman took an unpaid leave of absence from UC Irvine but is still an employee, which makes her eligible to remain in the housing, university spokesman Tom Vasich said. Employees on such leaves must reapply every year, and the decision about whether to extend the leave is made at the discretion of the university's senior leadership team.
In addition to employees on unpaid leaves, other people who live in University Hills but are not teaching include retired faculty members and the spouses of faculty members who passed away.
—Was Porter given special treatment?
Vasich said Porter's situation is unique because the university has never had a member of its faculty elected to Congress before. However, he said that over the last decade, eight other faculty members took unpaid leaves of three years or more.
—Is it appropriate for Porter to keep the housing?
There are hundreds of faculty and staff on the waiting list to buy or rent in University Hills. The list includes university employees who have since bought homes and are therefore no longer eligible to buy in the community, as well as people seeking condos, town houses and other types of accommodations that differ from Porter's four-bedroom house, Vasich said, so it's unclear how many are waiting for a home like the congresswoman's.
Porter's campaign, asked about whether she was denying a university employee affordable housing by choosing to remain in her house, said she is abiding by the university's rules.
"Per long-standing university policy, all faculty on approved unpaid leaves for sabbaticals, fellowships and visiting professorships, as Rep. Porter is, as well as professors with emeritus status, may remain in their University Hills housing," Wong said.
Porter said that if she loses her November race, she will start teaching at UC Irvine again in January. She declined to say what she would do if she remains an elected official.