How is this an argument, though? This is true of every small town that has one major company in it. The huge majority of people in town work for the company, and people don't really otherwise have much incentive to live there.

Though those concerns apply if the major employer in a non-diversified area picks up and moves, goes bankrupt, downsizes, etc. whether or not something is a "company town" in some formal way or not. Look around the US Midwest for examples.

First of all, the employees are not _forced_ to buy there, they can still commute like before. Speaking of moving, the company made quite an investment building those houses so it will be less motivated to move easily someplace else. But if it does, what's stopping other businesses stepping into a pool of workers which may - or may not, of course - be readily employable in that area?