For Foreign Diplomats in Area, There Are Few Privileges in Housing by Heather Nalbone Talk about a shock. When Mireya Magana, the press attachÈ at the Mexican Embassy, and her husband moved to Washington two years ago, their housing costs increased sevenfold. Instead of paying somewhere in the neighborhood of $300 a month for a three-bedroom apartment in Mexico City, the couple is now shelling out $2,000 in monthly payments to maintain their suburban Virginia rental home. But itís worth it. ìD.C. is a beautiful city,î said Magana. ìYou donít have the same problems with traffic that you have in Mexico City, and the culture is wonderful. I like it here very much.î Maganaís experience is not all that atypical. Although diplomats from larger Western cities such as London or Tokyo may be used to high housing prices, the cost of living is a substantial adjustment for a majority of diplomats relocating from smaller and more secluded regions. ìObviously when you arrive in a new place, finding a place to live is one of the first things that enters your mind,î said Matt Franci s, a public diplomacy counselor at the Australian Embassy. ìThe immediate observation is that rents are much higher than what weíre used to in Australia, but once you get over the initial shock, itís not too bad.î So how do foreign governments help their overseas representatives get over that initial shock? The answer is simple: by helping them out. For diplomats, like any other relocating business employee, living in Washington is less about coping than it is about planning. Consider the German Embassy, the site of roughly 50 new transfers last year. The embassy relies on a housing allowance system that tacks on an extra payment to each month of an employeeís salary. Employment level and family size determine the dollar amount of each individual allowance, although in-house researchers track the housing market annually to ensure diplomats receive adequate funds. The allowance system is a popular one in Washington and is used by embassies of all sizes. Israeli diplomats receive housing stipends, as do Japanese and Australian officials. Although other embassy-provided relocation services vary by countryófrom real estate referrals to an extra weekís pay specifically for house hunting and school shoppingóvirtually all newcomers receive monthly stipends of some sort. Where housing allowances are not offered, other incentives are readily available. The Mexican Embassy, for instance, provides what its employees refer to as ìinstallation expenses,î or the equivalent of one monthís rent to help with moving costs and security deposits. ìItís probably a good system for housing,î said Peggy Love, president and chief executive officer of Full Circle International Relocations Inc., a consulting firm that specializes in international relocation. ìIt probably works better in the diplomatic community than it would in the private sector.î In many third-world and politically unstable countries, where security and housing availability are major concerns, assigned housing is the norm for embassy and consulate employees. In Washington, however, where petty auto theft is a much higher concern, assigned housing is typically reserved only for ambassadors and their top advisers. Even then, government-owned homes are provided mostly for the purposes of downtown proximity and frequent home-based entertaining. What all this translates into for many attachÈs is a lack of special privileges when it comes to finding a place to live. For the most part, there are no special rates or diplomatic discountsóexcept perhaps by landlords eager to sign multiple-year leases. Diplomats are just as responsible for the terms of rental leases and loan contracts as are their private-sector neighbors. And most diplomats say they would have it no other way. ìI think itís better this way because the size of the family can vary so much, and people have different interests and needs,î said Gudni Bragason, deputy chief of mission for the Embassy of Iceland. ìI would much rather live in the city, but on the other hand there are colleagues of mine who would much rather live in a suburb. Itís very important to Ö be happy where youíre going to live for the next three, four or five years.î An area where diplomats do often have the upper hand is reputation. Aneta Owens, a Cathie Gill Inc. real estate agent who works with several Scandinavian embassies, finds that most landlords jump at the chance to rent to diplomats. ìThey know they will get their money, itís usually a long-term lease, and theyíve been happy with how [diplomats] take care of homes,î said the realtor of 15 years. Although landlords are eager to sign on with diplomats, mortgage lenders often are not. Record-low mortgage interest rates have made homeownership a worthwhile investment for many people, including some foreign nationals living temporarily in the United States, said Freddie Mac chief international economist Robert Van Order. The average interest rate on fixed-rate 30-year mortgages, for instance, reached its lowest level ever in March, at 5.61 percent. Although many local residents are taking advantage of what Freddie Mac chief economist Frank Nothaft calls an ìamazingly affordableî housing market, diplomats have the lower hand. Wells Fargo, for example, excludes diplomats from loan programs that provide financing for both permanent and temporary alien residents. ìThe United States doesnít have jurisdiction over those individuals, and a mortgage company wouldnít have any recourse if there was a problem paying back a loan,î explained Wells Fargo spokesman Tom Goyda. No matter, said Magana. Although a few of her colleagues do buy and sell property, most prefer the mobility that comes with yearlong lease agreements. ìMy husband and I were very lucky because we found a home the day after we arrived,î she said. Heather Nalbone is a freelance writer in Silver Spring, Md. Relocation Consulting Firms Can Ease Transition Problems Anyone who has moved at least onceóbe it 300 or 3,000 milesóknows the amount of sweat equity it takes to readjust and settle into a new community. Luckily, most diplomats donít have to worry too much about the essentials, such as driverís licenses and documentation. Embassies usually take care of those details. But processing all of that information while looking for a place to live, experts say, can be overwhelming when it has to be handled within a short period of time. One up-and-coming solution is in the form of relocation consulting firms. These fee-for-service companies generally specialize in helping transferees and their families make a smooth transition to life in the United States. Although some embassy personnel say firms that specialize in relocation services are better suited for private sector executives, company officials say their services are invaluable for all types of first-timers to the Washington area. The following is a small sampling of such companies: Full Circle International Relocations, Inc. www.fullcircle.com This company provides an exhaustive list of services, including mortgage banker referrals, accompaniment to school visits for families with children, and help with setting up household amenities. Check out the agencyís free Washington Web guide designed for executives and their families relocating from overseas. Employee Relocation Council www.erc.org The Employee Relocation Council is a professional membership association that focuses on the global business market. Members from across the world have access to information regarding real estate transactions, moving companies and other related services. Orbis International Inc. www.orbisrelo.com/index.html Orbis provides assistance with home buying or renting, moving in, securing documentation, and becoming acquainted with the local community. --Heather Nalbone