As high mortgage rates make potential sellers wary of listing a home and buyers feverishly compete for disappearing inventory, some employers are stepping in to offer employees affordable housing solutions. An offer too good to refuse? It may not be as simple as that.
Housing help can come in many flavors. Companies can create planned communities such as Meta Platforms Inc.’s Willow Village in Menlo Park, California, or Elon Musk’s proposed Snailbrook development outside Austin, Texas, with housing offered below market rates to attract and retain employees — a strategy not dissimilar to the “company towns” and “utopias” from a century ago. Local governments can provide affordable housing for employees and citizens, like Chicago’s Teacher’s Village, which is focused on city teachers and independently living seniors. Employers can also offer direct financial support, such as a down-payment assistance program and help with closing costs, or guidance on how to access local grants.
Much as when employers started to offer student loan repayment assistance to lure in millennial hires, this trend of employer-subsidized housing will likely expand as affordability declines. The median cost of an existing single-family home has increased nearly $100,000 in two and a half years, according to a National Association of Realtors report. The mortgage rate has doubled in the same period and people’s monthly payments have gone from 14.7% of their income to 26%.
