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Employer-assisted housing comeback?

From the Ground Up

Although housing assistance to employees never really went away, residential real estate prices have gotten so high in some cities that employers are now offering housing assistance to prospective regular employees, not just executives, to induce them to go to work for their companies.

We might think of this as a new phenomenon, but the fact is that employer-assisted housing has been going on for years.
In this column we will explore some ways that employers have offered housing assistance to employees.

At the lower end of pay scale…

Thanks to long-term financing programs over the past 60 years, many Americans have been able to purchase their own homes. That was not the case before the advent of federal mortgage programs. Many people lived in housing provided by their employers, sometimes in “company towns.”
Company towns may have come and gone, but providing housing as part of the employee compensation package is not uncommon anymore.

Ironically, this benefit seems to be more prevalent, at least in Mississippi, at the lower end of the pay scale.
Food-processing plants, especially catfish or poultry, sometimes have a collection of mobile homes nearby for workers who have been brought in from out of the country. In high cost, touristy areas where service workers can’t afford housing, employers rent blocks of apartments and then provide them to workers, especially temporary workers.
For years, migrant workers have been provided housing, although its quality has often been questioned.

Close to the job

Another provider of direct housing is the U.S. Armed Forces. Most military bases have a variety of housing types, ranging from mansions for general officers to barracks for the recruits. In between, there are single family houses, duplexes and townhouses, depending on the base.

Let us not forget the church. In the past, it was common to see a parsonage beside the church. Nowadays, it seems more common for churches in Mississippi to provide either a house or a housing allowance. While on the subject of religion, monasteries and convents are another type of employer-provided housing offered by religious organizations.

Farm managers are another group in Mississippi that often has housing provided by the employers. Like the farms that the managers oversee, this type of housing ranges from small and basic to large and well-equipped.

Maintenance personnel are often provided housing as part of their employment package. Retreat centers in rural areas usually have housing for the maintenance person, while large apartment complexes in urban areas offer an apartment to the full-time maintenance person. A benefit to employers in these type cases is that maintenance people also are expected to be on 24-hour call.

A few twists

There are several twists on provided housing. Sometimes, it is not the employer who provides the housing. For example, police officers have been provided housing by community organizations to live in high-crime neighborhoods.

The above are examples of employers provided the housing unit directly to the employee. Another way employers provide housing benefits to employees is through assistance programs.

Teachers receive a lot of attention in this area.
In San Jose, Calif., public school teachers are offered down payment assistance. In Chicago, teachers are offered access to housing providers who have agreed to give preferential treatment to teachers in a variety of financial and non-financial ways. In Greenburgh, N.Y., an initiative to build housing for teachers on the school sites themselves is being pushed by some.

Have you heard of the Department of Housing and Urban Development’s Teacher Next Door program, which offers teachers who buy a house in certain designated low-income areas forgiveness of a second mortgage that was used to secure a down payment loan? Then there is the 1998 Mississippi Critical Teacher Shortage Act, which assists with housing and college tuition for students committing to teach in certain areas of the state.

Fannie Mae also has employer-assisted mortgages, which provide a way for employers to assistance with employee housing. This assistance may include grants, forgivable loans, deferred or repayable loans, matched savings, interest rate buy-downs, shared appreciation and home buyer education.

In conclusion, employer-assisted housing never went very far away, but because of economic and community factors it may see a resurgence in the near future.

Phil Hardwick’s column on Mississippi Business appears regularly in the Mississippi Business Journal. His e-mail address is phil@philhardwick.com.


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