PicoZ

Why won’t they come back?

Bosses are in regular consternation over why it’s so hard to get staff back into the office. Many are focused on luring employees through promises of staff bonding, enhanced creativity, and “midweek mixers,” but a more effective strategy may be to pivot to two less sexy but arguably more powerful bargaining chips: commute times and affordable housing.

One survey shows saving money and time spent commuting are the most important factors for those who want to work remotely, sharing the top spot with childcare. What’s an employer to do to attract talented workers who can’t afford to live nearby?

Help them afford it—or, in some cases, build it for them.

That’s the increasing realization of companies across industries, regions, and sizes. This current moment seems the right time for a grander experiment around affordable employer-sponsored housing. The pandemic only underscored desires for flexibility and deeper ties with one’s family, colleagues, and neighborhood. At the same time, most of the market is inaccessible to the typical buyer; a Redfin report found only one in five homes was affordable last year to a median-income US household, compared to two in five in 2021.

That has stark implications for an employer’s ability to recruit talent. “The limited availability of quality affordable housing is an impediment to team members and their families,” says Juriana Sperandio, human resources head at JBS USA, a food-processing company. “We saw many examples of team members having to look in communities an hour or more away from our facilities for housing, due to the lack of affordable options close by.”

JBS is one example of a company now offering housing programs—with units for workers to rent or own—as an employee benefit. And some startups, such as Landed, are working with employers in industries such as education, healthcare, and the public sector to make housing affordability less of an impediment to hiring and retaining workers.

Those organizations join several others, such as Meta and Elon Musk’s Tesla, Boring, and SpaceX, in linking the hunt for talent with the hunt for housing—some to greater extremes than others. Musk plans a community along the Colorado River, outside Austin, Texas, for his workers to live. Overseas, company-sponsored housing is more common; India, for example, boasts worker “colonies” in diverse sectors as oil and mining, banking and dairy. To be sure, the downside of company towns and labor being concentrated in one area also has been well-documented, leading to suppressed wages and less job mobility. In other forms, though, employer-sponsored housing can also be a retention driver and a pathway to otherwise-elusive homeownership.

Connecting home and work

In a lengthy Harvard Business Review piece earlier this year, economist Edward L. Glaeser and consultant Atta Tarki make the case for why US-based employers, especially those whose workplace relies on in-person presence, need to think about housing alongside other benefits. “In a sense, housing is already a major part of every large employer’s HR strategy, since the cost of hiring depends on the cost of housing,” they wrote. “Despite all the recent headlines about layoffs, American businesses are struggling to attract and retain employees at a historically high rate.” Tarki’s research, too, found that “a longer commute is one of the most reliable predictors of attrition, especially for mid- and lower-salaried positions.”

Everyone finally agrees there’s a housing crisis

The ability to attract talent—and maybe even keep workers coming to a physical office—is tied to their ability to rent or buy a home nearby. The inability to keep up with housing costs has a ripple effect across work and civic institutions. Lines at food banks grow, people seek or work multiple jobs, families have less stability.

Support for affordable housing, and the need for more of it, is finally gaining consensus across party lines. The libertarian-leaning Cato Institute says 87% of Americans are concerned about the cost of housing; two-thirds of city dwellers support building more if it helps young families afford to buy. Elsewhere along the ideological spectrum, James Lloyd of the New York State Association for Affordable Housing declared in a recent essay that more development helps lower rents across all income levels: “We progressives should therefore be fighting for new housing with every bone in our bodies.”

A case study in employee loyalty

JBS has allocated more than $20 million to help employees access affordable housing. The company has housing programs in eight communities: Cactus, Texas; Ottumwa and Marshalltown, Iowa; Beardstown, Illinois; Worthington, Minnesota; Green Bay, Wisconsin; Souderton, Pennsylvania; and Plainwell, Michigan. In some cases, JBS operates company-owned apartment complexes for staff to rent. In other cases, it partners with developers and lenders on a homeownership program, setting the price and terms. It also assists employees in navigating credit, paperwork, closing costs, and programs they might qualify for. (Employees outright own the home, but JBS asks that if it helps cover closing costs that a team member stays on for at least two years.)

Evelyn Hernandez, who has worked for JBS for seven years and is now a supervisor in human resources, was surprised to learn when she signed up for the company’s program that she qualified for more house than expected.

“I did not have the knowledge that I needed,” she says, referring to help in fixing credit scores and navigating USDA and FHA loan programs. “I got to build my own home at 28 years old. I did not get a degree. I was a single mom for some time. To be where I am today … it would have never crossed my mind.”

In December, she and her husband, who share three children, closed on a four-bedroom house in Cactus, Texas, a four-minute commute to her office. The extra time and space is making them think about expanding their family, and Hernandez says her loyalty to JBS has only gotten stronger.

No down payment from Mom and Dad

Right now, housing and relocation benefits rank fairly low in importance to employees (health, retirement, and leave are tops), but that may be in part because current iterations of what’s offered are paltry at best.

Alex Lofton is trying to change that. He’s the co-founder of Landed, a startup targeting those homeowners “without the ‘bank of Mom and Dad’ to rely on for a down payment,” he says, explaining the inspiration for the endeavor. As Landed set out to scale and market itself, employers surfaced as a natural partner, says Lofton. “Employers need to attract and retain talent, and talent needs accessible, affordable housing near where they work. It was a win-win.”

Landed initially worked with school districts to help teachers access affordable down payments. During Covid, healthcare organizations and other agencies started to seek its services.

The company’s business model also has changed, from initially sharing in real-estate commission fees to now being paid by employers to run down-payment programs. Like Hernandez, who didn’t know her options, Lofton says people don’t realize just how many programs exist to help them buy a home. He advises potential homeowners to meet with loan officers early in the process and make homeownership an explicit, long-term goal.

I ask what would make housing more affordable, and he says: “Vastly more supply of housing and making sure wages steadily increase.”

Wages, of course, are the most immediate way companies could help their workers keep pace with rising costs. The crucial role they play in solving the housing crisis is undeniable. But as employers consider ways to make the office more appealing, some would be well-served to start by making homes within their workers’ reach.

ncG1vNJzZmismaKyb6%2FOpmacoJGnwaa%2Bjm9pcWhgaX9wwMeeZKWZpJrAtXnEpqelp6masm68xKuiZpmeYq6nss6rm5qanJp6qbvMnmY%3D