More employers are not only becoming landlords, but are going to have to get further involved in workers’ housing situations.
It isn’t a new concept, but one which seems to be rebounding with more corporate and worker migration, and rapid inflation of housing costs, with fewer affordable options available.
America was virtually born and grew on the company town. Detroit, MI, ‘Motor City’ is one of the most famous examples. More recently we’ve had San Francisco with Facebook. And Amazon with Seattle.
Once companies thrive and eliminate access to affordable housing, they have in turn, had to create it.
It can be a great match for both worker and employer. At least until the industry fails. Today’s rebirth of employer landlords may be different given the new distributed workplace. At least for some.
Providing Affordable Housing
In the past, employers have had to create and secure affordable housing for their workers. Many, including big banks and tech companies simply haven’t paid staff enough to live well near their headquarters.
Building, buying, and subsidizing housing for them has often become a necessity.
Helping With Moving
Even more common, and likely to be seen in the near future are companies having to assist workers with relocating.
Those that still want talent to come work in the office may have to pay big sign on bonuses, and cover things like moving, down payments on new homes, and even eating any deficits when they sell old homes.
More frequently we are also seeing corporations moving to cheaper, safer, and freer areas. Such as the huge migration from NY to FL. It can benefit them to also pay for their teams to relocate with them.
The Pros & Cons
There are advantages to employer landlords. For the workers, it can mean cheaper housing, and a guaranteed roof over their head. Of course, that only lasts as long as the employment. There may be no excuses for calling in sick. They know where you live. It can be harder to leave a job regardless of the treatment and pay if it means you and your family losing your home too.
Employers may be able to provide housing in lieu of some pay. If they buy big apartment complexes, or even convert half of their office buildings into residential ones to right size things, they can provide that housing at a fraction of market rates.
As the economy rotates, many corporations find that the most value in their company is suddenly in their real estate assets, not their technology or product sales.
More employers seem to be getting involved in housing. Either by owning and providing the housing, or offsetting housing related costs.
Investors can help. They can serve corporations with inventory, manage it for them, and acquire it when they can no longer support it.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund