Some employers have decided to build their own housing for workers

Yeah, I'm much more of a "yes, and" guy with regards to our housing shortage. Would I want to see this become the dominant model of housing? No. But if it helps someone, that's good! We just need more housing of all shapes and sizes in the places people want to live.

I think this is a tempting solution but a bad idea in the long run. Just like how employer provided medical insurance sounds good on the surface, but it gave employers an incentive to lobby against socialized medicine, which reduces worker mobility and hurts the economy.

just have mass public housing. easy. then you can plan based on population level needs instead of what will make people money.

Another important point from the very same article, "a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy."

Thank you so much for posting this summary! This honestly seems like a great balance for everyone involved.

I think people who don't like it are just afraid of where this appears to be heading, and they are just resisting the idea of employers gaining anymore control of other aspects of peoples lives. Of course, the people who do this are technically choosing to give up this control to employers on their own volition, but it's possible to imagine a future where this becomes very normal and difficult to avoid

There was a scandal in China where a company sold homes to the employees then fire them a couples of years later. Former employees stuck with mortgages they couldn’t pay. There are so many problems that happened, these homes were close to the workplace while being far away, very undesirable to outsiders

> 2. They're being sold at cost.

There's no reason the government can't do this either, except (and I'll speak for my city) they don't want to do any of the hard work to actually make this happen. We need better leaders.

> I think the people complaining in this thread would complain about anything.

So much THIS!

If they were free, people would complain that you still have to pay property taxes/utilities.

Everyone LOVES to criticize but that same group rarely offers solutions, lest others criticize them.

Here (Ontario, Canada) housing is a major issue for the reason you list : Nobody is big enough to push back and make it happen.

Try and build anything here and you will be NIMBY to death. I ride my bike by an area where they are tying to build low-rise apartments and everywhere you look are signs protesting it.. where should they build?

Company towns have a pretty bad historical record in the USA. Try asking ChatGPT:

"What is a 'company town' in the context of late 19th and early 20th century America from the perspective of both business interests and labor organizers?"

I suppose nobody will be able to get away with paying workers in scrip these days, however. Also, the housing is actually owned by the employees as you note, so that's also an improvement over past arrangements. It's still a little creepy, I think.

> I think the people complaining in this thread would complain about anything.

This specific thing has a history all tangled up with bad company behavior during the labor movement. You'd get the same reaction about a company paying in scrip and having a company store, no matter how many paragraphs one may compose of reasoned arguments that it's a decent, or even great, idea. People's first reaction will be, "yep, seen this before, fuck that" and they'll not pay attention to all the words about what a good idea it actually is.

> When government won't allow construction of "workforce housing," complain, because nobody's big enough to try to push back and get concessions to make it possible.

You'd make a great 19th century robber baron.

Arkansas just tossed out its child employment laws for 14 year olds, so it sounds like things are going your way.

I grew up in a Midwestern small town with one major employer. It’s not a sustainable way of life. When that employer inevitably pulls out, the taxpayer pays the brunt of their externalities and the people pay with their QALYs.

I see no reason to incentivize that kind of development no matter how badly some people think they want it.

Why not just sell these houses with no restriction even at a market profit? If reasonably priced nice houses are required to attract talent, just solve that problem.

Healthcare shouldn't be tied to employment, WWII is over. Housing shouldn't be added to that list. We don't need to have a Company Store model.

Because of the restrictions do the homes show up as assets on the company's books? If so, what happen in bankruptcy? Something about the deal doesn't sit right with me but I can't put my finger on it.

You left out that the house cannot be rented out. So if you get fired in two years, you get to sell the house back to the company for what you paid for it (losing appreciation). Since you're not going to be able to stay in the neighborhood because there are no other jobs around.

Which means that the company can price in "forcing you to sell your home" into your salary discussion.

> 1. The houses are being sold, not rented.

That's not at all what the article says, here is a direct quote from it (emphasis mine):

"So a growing number of employers around the country have decided to build their own housing for workers, _mostly for them to rent_ but sometimes to buy."

I would hope it's extremely obvious the major problem there is with linking your housing (through renting) to your employment. It's the 'company town' problem all over where workers can be exploited with the constant threat of homelessness if they're terminated.

> helping people find financing

Yeah, that's how indentured servitude works. The employer finances your purchases, then you owe the company.

> if they sell within 3 years of buying, the company has the option to buy the house back at the previous sale cost, and for four years after that, the company has ROFR at market price.

What if the company fires the employee after 2.5 years? The buyer could be seriously underwater. Heck, depending on the housing market, the buyer could be underwater even after 3 years.

Where I live (Ostrava, a heavy industry city which expanded massively during the 19th and early 20th century), there are some worker colonies left, which were built by the mining and steelworking companies around 100-120 years ago.

The houses are somewhat modest, but low-key beautiful (redbrick architecture similar to England and very rare in Czechia), and they were real houses, suitable for families and situated in a walking distance from the workplaces, schools, churches and marketplaces.

It seems to me that building them was a fairly good idea.

They just didn't read the article and are knee-jerking.

I don't comment unless I read the article, and then read most if not all of the links within the article.

Cook Medical isn't a coal mine, and Pike Place isn't a company town, and employees aren't being debt trapped.

But knee jerking is easier, and the hormones it releases are very attractive to many people.

Yeah, I agree. You can see something like this as a clear signal of a market and regulatory failure and yet recognize it as an ultimately pro-social stop gap.

If this becomes routine, it will mutate. It's an absolute breeding ground for abuses. Thus it should not be seen as a reliable source of relief but as another catalyst for the urgency we need to have regarding the housing crisis which is rising to the level of an emergency. Policy makers are the only ones who can swallow hard and make the decisions which will get us out of this.

nobody needs to offer a solution just because they can spot a false dilemma from halfway across the countrt

This is a good point, the motives for first party corporate housing in an inexpensive area without severe supply restrictions are going to be completely different than in an expensive area with those restrictions.

I still think it’s possible for it to be a win-win and solve a collective inaction problem. When a business wants to expand in a rural area, it may create an acute housing shortage which the market would only eventually address, and it requires each individual developer or buyer to go through the process of finding new housing. If the business knows it’s gonna need a 100 new homes they might as well start the process asap, and I don’t mind if they get rewarded for doing so as it incentivizes job creation and housing construction.

In the scenario where it’s not nefarious and just a smart win-win, it reminds me how Japanese rail recoups its costs by purchasing/developing land adjacent to stations. It’s just a smart way of capturing externalities from an economically beneficial endeavor, which reduces costs/increase the incentive for the good thing. I support it

In my opinion, if your employees can't afford to live Spencer-friggin'-Indiana, that's between them and their government. Your employees probably still wouldn't afford to live in Spencer if you didn't hire them. But unaffordable housing suddenly becomes your problem just because you hired someone, which strikes me as backwards. You didn't decide how much housing would cost, and unless you're a monopsony or close to it, you didn't decide what the market prices for their labor are. And in many industries, margins are so tight that it's impossible to stay solvent while paying much above market prices, because your competition certainly won't.

> and your company name isn't "McDonalds"

Seems inappropriate; McDonalds beats minimum wage and has significant opportunities for career growth that many other "fancier" restaurants don't offer.

Part of it is explained as (paraphrasing) "builders won't build low cost homes because the profit isn't there" so all the builders are 20 miles away over in Bloomington Indiana building $500K houses for the same labor and materials cost and making a lot more money.

"Company towns" sets off all sorts of alarm bells and rants. But the reality is that, in a lot of smaller cities, there pretty much are one or maybe two dominant employers and everything else exists primarily in service of people working for those employers.

As in the case of one person I know, if you live in Bentonville you're probably working for Walmart and if your position is eliminated and you can't get a new one, you're probably moving.

Only this time whistleblowers will be drowned out by accusations of astroturfing/botfarming. Progress!

Pay people enough to afford it? Lol, that would be socialism. Selling at cost means they can make some housing available but at no cost to themselves. It might still work out to be a better deal for the employees though--if they were paid more and bought houses from commercial developers, they'd probably have to pay twice as much for the house.

It also said something about a lottery, so I suspect there are enough buyers for them. "Immediately" likely meant that they had their down payment and everything else all ready to go. Others likely needed to make arrangements to sell their existing homes and other things before committing.

> improve their credit scores or save for a down payment.

That's really telling. The company who has hired them and are paying their salaries don't think that they are credit worthy. So they are literally admitting that they are underpaying their labour severely, or expect to do lay-offs.

Having your employer as your landlord and the owner of the local shop shifts even more power to the employer. Maybe it would be acceptable with a very strong union.

"Oh can't work this weekend, that's a shame, your rent review is due"

Or of course the old "Oh no you can't drink alcohol here, we're a good company" favoured by company towns a century ago

"Selling" a modern house can come with thousands of different obligations too. Imagine a HOA, but it's actually a company.

pretty relevant:

As the Panic of 1893 weakened much of the economy, railroad companies ceased purchasing new passenger cars made by Pullman. When his company laid off workers and lowered wages, it did not reduce rents, and the workers called for a strike. Among the reasons for the strike were the absence of democracy within the town of Pullman and its politics, the rigid paternalistic control of the workers by the company, excessive water and gas rates, and a refusal by the company to allow workers to buy and own houses.

https://en.wikipedia.org/wiki/Pullman_Strike

My grandfather and mom would sing this occasionally.

There's a danger to society when the common case becomes a factory town. Too many risks of depending on the company store for everything.

> It didn't go quite as planned now though.

It also doesn't sound like it went too badly either.

Quote from the wiki page you linked: Bournville is known as one of the most desirable areas to live in the UK; research by the Joseph Rowntree Foundation in 2003 found that it was "one of the nicest places to live in Britain".

Aside: Many HN readers may remember that Basecamp's drama from 2 years ago [1] made mention of "paternalism" and how they planned to end the practice within their benefit structure. I recall the phrasing to be a source of confusion and argument. I think there were still a lot of folks (myself included) who saw this as a form of societal absenteeism in an economy with challenges that are often not easily overcome with simply more money at an individual level. I do, however, think this is a dicey area where companies can spend more efficiently on some paternalistic benefits rather than flatly increasing salary (which may have fewer tax incentives). This needs to be balanced with the fact that US corporations are not legally incentivized to maximize employee happiness, they're incentivized to maximize profit and without a legal entity around worker benefit, this form of paternalism can feel cheap or dystopian with callbacks to "company stores" and jumping through hoops and checking boxes to maximize your salary.

[1]: https://world.hey.com/jason/changes-at-basecamp-7f32afc5o

Ford is not the only one, there are many examples (google the wiki page for company town for a basic example list). Almost all failed eventually due to changing economic instances or company malice and the end result is either incorporation into an existing town (the good outcome) or decline and eventual devastation. Wile less evident than the real town examples, we have here lots of smaller end 19th, early 20th century "communities" which have the same result. There is a name for the type of houses: Arbeiderswoningen (laborer housing). Eventually the government took over over from private or corporate initiatives and a rent system was created which was far less tied to the actual place of employment.

Ski resorts house employees - at least it's very common in that industry. So clearly not illegal.

I think the only businesses willing and able to do something like this would get roasted hard by the media and even politicians for this. Classic handwringing about any perceived nefarious plot because it’s done as part of a big tech/pharma/finance/whatever company

Honestly, if my bigtech employer had some company housing benefit, I’d really appreciate it and likely use it. “Company towns” from a century go are so, so different from what a big tech housing development would be: none of us would be getting paid in scrip, we’d easily have transport options outside the corporate housing (it’d probably just be somewhere in the middle of an urban area like South Bay or Queens), we’d be consciously choosing it because of municipal policy failure making housing too expensive and not because it’s literally the only option in the area.

I would have to understand better what you mean by a mortgage though because I doubt I’d want to live in a corporate housing development years after leaving the company. It would probably be better for capitalization (capture the depreciation$$$) for the company to own the building but offer it for rent at a low rate to employees.

This sounds like a recipe for a messy divorce. It makes sense for a bank to offer a discounted mortgage, because they're in the business of mortgages, and it's not unreasonable to still bank with a bank you used to work for.

OTOH, I wouldn't want to have to have a payment relationship with my employer after I left. Sometimes it's nice to keep a 401k with an old employer, but you end up caught up in their drama still --- when they change 401k providers, you need to pay attention, if they go through a merger, you need to pay attention, etc. It would be worse if they were administering your mortgage.

Now --- if they want to partner with a bank/credit union and subsidize a lower rate or something, that might make sense. It could be win-win-win; it might be less risky loans for the bank, a nice perk for the employee, and a way to attract employees. Of course, it depends on what happens the employer; it also concentrates the loan portfolio of the bank; if you had a lot of loans to employees of a company that has a big problem, you've now got a lot of borrowers risking default at the same time. I got a nice deal on a car and factory loan incentives because of who I worked for, and there's lots of other employee perks available.

The issue is more with ERISA, which came about in the 70s. It requires all employment-connected retirement plans to act “solely in the interest of participants and beneficiaries” for the “exclusive purpose of providing benefits” to them. In that context, the fiduciaries do have an obligation to maximize risk-adjusted returns for the benefit of the plan participants as a whole. While the fiduciaries have latitude in selecting investments, intentionally investing in something they know won't maximize returns to the plan participants would not be allowed. The "benefit" of a below-market-rate affordable housing project doesn't count because those benefits would go to the housing occupants and not all plan participants.

Why do you trust the company will continue to provide said benefits? Someone new could come in and say, "hmm, let's raise the rent on the main street, close school canteens, add a co pay element on the universities..."

Once the company provides everything, they are in an excellent position to alter the deal, and they will.

Don't forget the company-provided housing.

I grew up in a mining town in northern Canada where the company provided everything you mention, plus summer jobs at the mine, chartered plane to pick up students, train tickets for vehicles, and much more.

The mine was originally owned by a group that started in the area so they had incentives to make the area great for the employees. Which they did, my grandfather and father got great paying jobs that allowed them to support their families.

But then a massive mining company came in and bought majority shares in the mine and they have been scraping these benefits ever since.

My point is, you never know what's going to happen. So don't get to attached to these benefits. For most places that's alright because there are other opportunities, but in a mining town there generally is one employer.

This ^ but it's an employee owned company. And since the company is doing so many things, like running schools and towns and pensions and scholarships, we should have some of the employees represent all of the others to make sure all the voices are heard. We could vote on those representatives and even have two different sets to keep them in check.

Either a portion of each employees pay could fund all of this or since the company is providing everything then we could just do without pay entirely. Not sure which method is best really.

Yeah if you all get on it you are in walking distance to work and all your friends! Downside is if you fall out with someone, there is no escaping them!

At least with the company featured in the story, it's your house to keep regardless of your employment status. The company does say it's keeping an option/first right of refusal to buy it back from you for the first three years at the same price you paid (to prevent flipping). Once that period is over, you are free to sell it on the open market.

-berg is actually a fairly common component of city names in Germany - unsurprisingly especially in Bavaria and Baden-Württemberg:

https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_Ge...

From one side you are correct and entitled to be able to do that. From another, and IANAPsychologist, I doubt the psychological effect of trying to emotionally isolate yourself from people you spend most of your time with is positive.

I wouldn't really call my neighbours a "part of my personal life". They're just people who live near me and have relatively little impact on my life. If anything, I wouldn't be surprised if people working at my company are more similar/relatable to me than just a random set of people in the same socio-economic class that move next to me.

Okay, just ignore the company's offers.

But if your coworker says "yes, please!" to the company's free Thanksgiving turkeys and Christmas hams and cheap T-shirts with company logos and subsidized health care and retirement plan and such - that's their choice.

On the flip side, by buying the house you are taking on a lot of extra risk. If the company shuts down or moves its factory you will be left both unemployed and left with a virtually worthless house, since no one will want to buy a house in a place where the by far single biggest employer just left. If you're renting you'll just be unemployed and can easier move to where you can find a new job.

Even though the article is about a home buyer, the article says at the very beginning, "a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy."

As if employer provided health insurance wasn't enslaving enough; now they want to bring back fiefdoms.

What a bizarre presumption to make with no evidence whatsoever.

It's almost like you have to have a pretty healthy income to be able to afford to eat decently.

Second paragraph states they are selling the homes, not renting them. You don't have to sell if you're fired, but the parent company gets right of first refusal at market rate for four years. So these concerns as articulated seem moot.

Healthcare, too.

Headline: You’ll never guess what this worker got for hauling sixteen tons

I can't wait until they start paying their people in company scrip! Walmart already tried to bring it back to Mexico in 2008 (https://www.reuters.com/article/mexico-walmex/court-outlaws-...)

Headline: This isn't a company town and nobody is going into debt to the company.

I know it violates the guidelines but I suggest you actually read the article and reply to that, rather than just making things up in your head and replying to the fantasy.

I'm astounded that someone could read TFA, as I'm sure you did, and come away with that summary. Because it's the summary I might come up with if I read only the headline and was in a hurry to let the world view my hot take.

Hasn't it always been legal to enslave prisoners?

The company here is avoid this to some extent by selling the houses to the employees at a good deal. So they wont be paying rent for the rest of their lives to the company, and presumably they can sell the houses later. Basically sounds like they want to boost the housing supply in a small town.