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Some employers have decided to build their own housing for workers

153 points by isaacfrond 4y ago

jleyank 4y ago
As long as these company investments are proximate to cities and towns where partners can find fruitful employment in other companies, children have access to good schools and activities and the various kinds of people required for life have easy access (medical, fire, cops, …). If the companies instead want a monoculture of single, childless workers it’s going to be (quite) unstable.
- ta1243 4y ago
  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.
  - smeej 4y ago
    The article specifies that the people are buying, not renting, the houses, and they're even subject to rules (probably an HOA) saying they cannot rent the homes to others. If they want to sell in the first 3 years, the company has an option to buy the house back for what it was sold for, and for four years after that, the company has right of first refusal to buy the house at market rate. This sounds like a fairly reasonable compromise to me, though it's far from the only model that would make sense.
    - ldhough 4y ago
      I've seen people say this a few times here but the article says: "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."
      - smeej 4y ago
        And if you read past the introduction, you'll find the article is about one specific instance, which is what people are talking about.
        ldhough 4y ago
        I did read that but it seemed pretty clear that the comment thread and the comment you were responding to were not in fact discussing one specific instance, but rather the broader phenomenon: > these company investments ... > If the companies ... > Having your employer [not "having Cook"] as your landlord ... Although given that your comment was clearly about the case study I should have made clearer that my intent was to communicate that just because Cook isn't renting the houses that the parent commenter's concerns are still valid because more companies are.
  - pc86 4y ago
    You're responding to things irrelevant to the article - the employers are not landlords, don't own shops. Nobody is renting anything. The company doesn't own anything.
    - ta1243 4y ago
      "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. " Seems relevant to me
  - bell-cot 4y ago
    > 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 A century ago, at least in America, we had Prohibition* - so "no booze" was the law, no matter how the company felt. *https://en.wikipedia.org/wiki/Prohibition_in_the_United_States https://en.wikipedia.org/wiki/Prohibition_in_the_United_Stat...
  - vineyardmike 4y ago
    When I worked at Google, there was a group for people to advertise apartments to each other in SF. I think 20% of them were rentals owned by VPs/Directors or other high level employees. that seems like an even bigger conflict of interests. When you rent from a megacorp, there’s realistically a million levels of bureaucracy between “work weekends” and “rent review”. When you rent from your skip level manager… your landlord can be directly approving your raises AND rent rates. …might help with layoffs though.
coldtea 4y ago
All kind of robber-baron capitalist crap is coming back to fashion, along with neo-feudal crap... https://en.wikipedia.org/wiki/Company_town https://en.wikipedia.org/wiki/Company_town
- quickthrower2 4y ago
  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.
  - Kaotique 4y ago
    Good luck selling that house in a company town to anyone outside the company.
    - smeej 4y ago
      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.
      - coldtea 4y ago
        How does this refute the parent's argument? If anything, it just says how similar it is with the already problematic case of "one major company town". And this is even worse, as it's not "one major company town" but "just a major company and nothing else town".
  - coldtea 4y ago
    >So they wont be paying rent for the rest of their lives to the company, and presumably they can sell the houses later To newer incoming employees? Who else would buy it? Not to mention the houses will be near worthless if the company moves from the area. This ties the employee with the company, but not vice versa.
maxehmookau 4y ago
The village of Bournville in Birmingham was created for this very purpose: https://en.wikipedia.org/wiki/Bournville https://en.wikipedia.org/wiki/Bournville It didn't go quite as planned now though. The factory is owned by a US multinational and most of the homes are underoccupied and overpriced.
- krisoft 4y ago
  > 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".
  - maxehmookau 4y ago
    Oh, don't get me wrong, it's beautiful. (I live very nearby). But it's definitely not a village with affordable housing for the local factory workers. It's a pretty village where rich people live, and aspiring rich people want to live. It went _well_, just not as planned...
    - blitzar 4y ago
      It went as planned, the rest of the Country went down the toilet.
      - _Wintermute 4y ago
        The UK is full of nice places where people can't afford to live. I don't see how this is any different.
zackkatz 4y ago
Headline: Innovative company reinvents company town. Visionary leaders hope to drive employees into debt and eventually forced servitude.
- labster 4y ago
  Headline: You’ll never guess what this worker got for hauling sixteen tons
  - tommica 4y ago
    Nothing!
  - orwin 4y ago
    Another day older and deeper in debt?
- autoexec 4y ago
  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-wal-mart-de-mexico-worker-vouchers-idUSN0546591320080905 https://www.reuters.com/article/mexico-walmex/court-outlaws-...)
  - fathyb 4y ago
    Isn't this similar to McDonald's point system? Workers get points as they work, different menu items cost a certain amount of points. They have to use all points (and eat their terrible food) before a certain period, else they lose them.
    - autoexec 4y ago
      If McDonald's is taking money out of people's paychecks and replacing it with McPoints or whatever they call them, then yes. Companies can give prizes or awards on top of paying their usual wages with actual money, but as soon as they start paying people less because they're compensating them with fake money it's a problem.
wink 4y ago
Guess it depends on so many factors. I live in an 8 story building and I hardly see my neighbors, so unless we could car pool some days I couldn't care less if coworkers past and present I like or dislike are living next door. We have many blocks of old "company" apartments for the railway employees (used to be state owned, so even a little different) in my town (and probably in the whole country) - so they're technically co-workers in an org with many 10k of employees, but the chance your neighbor is visible in your daily life at work is pretty slim. Kind of a non-story, but if it helps the employees it sounds good, not much to discuss I guess?
- ghaff 4y ago
  "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.
  - HPsquared 4y ago
    [flagged]
    - eppp 4y ago
      Seems kind of silly to pay rent for company housing though.
      - HPsquared 4y ago
        It has to be paid for either way. Could be offered to rent by employees or simply provided as benefit. Probably tax rules will decide which path to take...
    - mperham 4y ago
      Companies already control workers by controlling access to their health care (wanna start your own business? quit a toxic work environment? can't because you can't afford losing healthcare!). This is one solution to the lack of housing but a massive side effect is that we consolidate even more power in the hands of employers.
vcryan 4y ago
This is very silly. I don't want any part of my personal life connected to my employer.
- dreen 4y ago
  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.
  - JohnFen 4y ago
    I am a huge believer in keeping my personal life as separate from my employer as I possibly can, for a whole host of reasons. I may technically spend a lot of time with my coworkers, but we're working, not socializing. My coworkers are acquaintances, not friends. That's not the same as being emotionally isolated. You still (presumably) have friends and family.
- Hamuko 4y ago
  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.
  - lallysingh 4y ago
    It's not just the people. It's also the same company providing your home, utilities, etc. Are the prices and quality at market norms or are you paying back your wages for extra profit to your employer? That's a lot of eggs in one basket.
    - Hamuko 4y ago
      I'm buying the home from the company with a mortgage from a bank, which I assume is not the company's bank. I'd also assume that the utilities are covered by a third-party. And if I have to move somewhere where there's basically no utility companies outside of my employer to service the area, then moving there is basically putting all of the eggs in one basket anyways.
Mizoguchi 4y ago
Some people don't have much of a social life outside work so colleagues become their friends and support system. It may sound depressing but many are perfectly happy living like this so in that context this sounds like a good deal to me.
- quickthrower2 4y ago
  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!
Wronnay 4y ago
Ford did similar things... "The Ford Motor Company's interest in employee loyalty went far beyond the shop floor workers. Ford owned a great deal of land near Detroit and established a land development subsidiary explicitly for the purpose of erecting middle-class housing for managers and supervisors. These homes in Dearborn were completed in 1919."
- consp 4y ago
  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.
RcouF1uZ4gsC 4y ago
I think selling the houses is fine. Renting them out, brings up issues of company towns. But as long as they are sold, I don’t see much of an issue. If the company is large, it is likely that a significant number of people in any new housing development close to the company would be employees of that company. In addition, with the ebbs and flows of employment, it is likely that the housing would end up getting sold later at market prices to people who did not work for the company. In addition, having company built housing, ends up relieving the price pressures on housing in the area. I think this overall is a good thing, as long as the houses are being sold, not owned and rented out by the company.
- dagw 4y ago
  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.
  - smeej 4y ago
    That risk exists for any home purchase in a small town/area with one major employer, not just homes the company helped build. If you work for the company and live in the town, you take on that risk, regardless of whether the company helped build the house.
    - dagw 4y ago
      Indeed, that was my argument for renting your company housing instead of buying it.
- discardedrefuse 4y ago
  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.
blitzar 4y ago
Honestly, give me the company town, the job for life, the fat pension, the regular promotions, the company schools, the company scholarships to send your kids to university and I will live next door to whoever you want.
- lozenge 4y ago
  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..."
  - segfaltnh 4y ago
    Surely there's no histoic examples of this happening. Especially not in America. /s
  - cj 4y ago
    >Why do you trust the company will continue to provide said benefits? Not sure if this is a great example from history. But my 87 year old grandmother still receives a monthly pension check from IBM from my late grandfather who passed away 6 years ago and retired over 30 years ago. I'm sure IBM wouldn't be making these payments if they had any other option. I think the answer to your question is "because they are obligated to" via contracts signed with employees (and ex-employees, and even deceased employees).
    - lotsofpulp 4y ago
      One could counter that example with the multitudes of businesses who failed on meeting their defined benefit pension promises, resulting in laws like ERISA 1974 and PPA 2006, which resulted in businesses ceasing to offer defined benefit pensions because it turns out, predicting decades of future economic conditions and insuring volatility for that length of time is insanely costly. Not to mention that IBM has been dying for a decade+. I certainly would not expect them to make good on any decent size DB pension in a few decades, and unless you are part of a politically connected group, you may or may not get fully bailed out by the feds (see General Motors pension renegotiations in 2008). See also multi employer pension plans which have crazy regulations where if one employer fails, the other employers gets to pick up the tab. https://www.americanactionforum.org/insight/the-american-rescue-plan-and-multiemployer-pensions/ https://www.americanactionforum.org/insight/the-american-res...
voxadam 4y ago
Sounds a little like Henry Ford's idea for Fordlândia[0] down in Brazil back in the late twenties. [0] https://en.wikipedia.org/wiki/Fordl%C3%A2ndia https://en.wikipedia.org/wiki/Fordl%C3%A2ndia
walterbell 4y ago
Sixteen Tons by Tennessee Ernie Ford (1956), https://www.youtube.com/watch?v=S1980WfKC0o https://www.youtube.com/watch?v=S1980WfKC0o
- tinglymintyfrsh 4y ago
  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.
Aeolun 4y ago
I think it’s interesting that all the people in this article that need housing assistance are clearly overweight, and the rich (presumably) ones are all thin.
- smeej 4y ago
  What a bizarre presumption to make with no evidence whatsoever.
  - Aeolun 4y ago
    The article shows two pictures of people needing the housing, and two of people building the housing. The builders look healthy, the buyers are obese. What makes this a bizarre presumption?
- JohnFen 4y ago
  It's almost like you have to have a pretty healthy income to be able to afford to eat decently.
  - deleted 4y ago
    [deleted]
  - SoftTalker 4y ago
    It's not true, though. You can eat decently more cheaply than you can eat junk food. People just like junk food better, and stuffing your belly with high-carb "comfort food" is basically a compensation mechanism if not an addiction.
    - JohnFen 4y ago
      > You can eat decently more cheaply than you can eat junk food. Whether or not that's true depends a lot on where you live. In economically depressed areas, just finding decent food is a challenge, let alone being able to afford it. In the US, it's generally cheaper to buy processed foods that are heavy on salt, sugar, and fat than it is to eat fresh, healthy food. There's also the issue of food preparation. Many (maybe most) people don't know how to cook from scratch in a way that is fast and healthy.
rsecora 4y ago
It was a common practice in the XIX and XX century, because there were not good living areas near factories. Some big conglomerates build houses for their workers, and they assign them to employees based on category, family size or marital status. Example Berlin [1] [1] https://en.wikipedia.org/wiki/Siemensstadt https://en.wikipedia.org/wiki/Siemensstadt
smeej 4y ago
I think the people complaining in this thread would complain about anything. 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. But then when a company, which is big enough, especially relative to its small town, does do the hard work of negotiating construction contracts and helping people find financing so they can sell homes at cost by removing inefficiencies from housing production, complain about that too? Some important points from the article: 1. The houses are being sold, not rented. 2. They're being sold at cost. 3. Anyone who buys one can sell it later to someone outside the company. The only restrictions are that 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. Is it a perfect solution? Of course not. These are humans. Humans don't come up with perfect solutions. But if you're going to complain, what would fix it for you? And is that just a matter of personal preference? 'Cause it's not like most of you are willing to live in a Midwestern small town with one major employer in the first place, but clearly these people are.
- davidw 4y ago
  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.
- zyang 4y ago
  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.
  - pydry 4y ago
    Or just makes it harder to move jobs which inevitably makes people more exploitable. It's not exactly bad ideas getting us into this situation but a rapid shift in power from workers to owners.
cvccvroomvroom 4y ago
Woz did one step further: had custom homes built beside one another.
deleted 4y ago
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JohnFen 4y ago
Well, it seems our return to "the guilded age" is complete with the return of company towns. It's only a matter of time before we start hearing the same horror stories that we heard in that era.
- CatWChainsaw 4y ago
  Only this time whistleblowers will be drowned out by accusations of astroturfing/botfarming. Progress!
AlbertCory 4y ago
Pullman, only a couple miles from where I grew up. The houses are beautiful and still in use: https://www.pullman-museum.org/theTown/ https://www.pullman-museum.org/theTown/ It was also the site of the famous Pullman Strike of 1894: https://www.history.com/news/labor-day-pullman-railway-strike-origins https://www.history.com/news/labor-day-pullman-railway-strik...
- m463 4y ago
  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 https://en.wikipedia.org/wiki/Pullman_Strike
omgomgomgomg 4y ago
So your housing and your job depends on the company? Ever had a bad boss? No thanks, unless the rental agreement is untouchable. They make a profit or two and increase your dependencies.
- anoonmoose 4y ago
  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.
  - AlexandrB 4y ago
    And then the sixth paragraph says: > 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.
- wnolens 4y ago
  Healthcare, too.
jonathankoren 4y ago
If Facebook ever does build their employee housing, it really needs to be named Zuckerburgh.
- Tade0 4y ago
  -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_Germany https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_Ge...
  - jonathankoren 4y ago
    And Pittsburgh is pronounced “Pittsberg”
abeppu 4y ago
> What about simply raising workers' pay? Median U.S. wages have long failed to keep pace with rising housing costs. But Ferguson says that raising pay won't create new homes. > Only 10 of the first 14 houses found buyers immediately. Walker says some interested employees can't break their lease yet or need more time to improve their credit scores or save for a down payment. If even when selling them at cost, the company doesn't have employees lined up and ready to purchase, then it sounds like their wages _also_ need to come up. They're not paid enough to have the financial stability to save even for a home being sold at cost.
- Finnucane 4y ago
  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.
- FateOfNations 4y ago
  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.
- carlosjobim 4y ago
  > 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.
systemtest 4y ago
Company housing is used in The Netherlands to pay people below minimum wage. Migrant workers (often seasonal) get paid minimum wage to work in agriculture, in fulfilment centers or similar jobs and have to pay a very high rent to their employer for renting subpar housing. That way the employer effectively pays less than minimum wage due to money flowing back in the form of rent. Terrible all around. Due to the housing crisis and people not being open to rent out their home to migrant workers this is often their only option. https://www.youtube.com/watch?v=Ab9L_I1WU6w https://www.youtube.com/watch?v=Ab9L_I1WU6w
llsf 4y ago
Michelin started his own experiment in 1920's. "The Group provided housing, schools, health clinics, swimming pools, and other recreational facilities in a system that became known as paternalisme (paternalism) or in more modern terms, societal or responsible support." "Rather than relying on union representation, Michelin management tried to foster the loyalty of employees through the generous provision of social benefits." source: https://www.hbs.edu/ris/Publication%20Files/Sucher%20Michelin%20Research%20Report%20%202021%202.11.21_d8433d7f-827d-44be-aed1-c30ff952e788.pdf https://www.hbs.edu/ris/Publication%20Files/Sucher%20Micheli...
- davidjfelix 4y ago
  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 https://world.hey.com/jason/changes-at-basecamp-7f32afc5o
  - freddie_mercury 4y ago
    There is no legal incentive to maximise profit, this is a myth. In the Hobby Lobby case, the US Supreme Court made this explicit. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
mikestew 4y ago
If your employees can't afford to live Spencer-friggin'-Indiana, and your company name isn't "McDonalds", you're just not paying them enough. Now, granted, it's been a couple of decades since I've spent a lot of time in Spencer, but I cannot fathom that in the intervening years that Spencer (nice town as it is) suddenly exploded into a tech hub where no one can afford a house anymore. A quick glance at Zillow says that it is not hard to find what appears to be perfectly livable homes for <$200K. Many are larger, nicer, with a bigger lot than the ~$900K houses around me in Redmond, WA. So I don't know what's going on in the leading example in TFA. On the one hand, it's not Mountain View, it's as-rural-as-rural-gets-in-Indiana with low CoL. And yet the company says, "we can't find people because they can't afford to live around here". Something just doesn't add up to me.
- opportune 4y ago
  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
- ChadNauseam 4y ago
  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.
motohagiography 4y ago
Naively, I'm surprised it's not common(?) for large or well capitalized employers to offer favourable mortgages in their comp packages. Some banks certainly do it as a perk. It would also create a new asset for the company, where the loan itself could be sold on if needed. If you have a whole pile of balance sheet cash, buying up some city condos and leasing them back to key staff seems like a pretty good investment. You can use them to secure cheap debt if you need liquidity, or sell the leases, and it's an inflation hedge. It seems so simple and progressive that it must be illegal for some reason.
- guepe 4y ago
  Ski resorts house employees - at least it's very common in that industry. So clearly not illegal.
  - carlosjobim 4y ago
    My experience with seasonal resorts is that employees are housed at no charge.
- opportune 4y ago
  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.
deleted 4y ago
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gms7777 4y ago
I did a postdoc at a hospital in a HCOL city which offered still expensive but below-market hospital owned apartments for postdocs. It was a massive perk at the time and I'm not sure I would have even taken the job without it. Even setting aside the cost part, it was a massive relief just not having to visit the city in advance and trying to find an apartment in a brutal housing market and dealing with sketchy landlords. Of course it came with the stressful side of knowing that if I ever left the job (or was fired), I'd also need to move out of the apartment as well within a month.
cjohnson318 4y ago
Haven't companies been doing this for decades? Between 2000-2010 Halliburton subsidized housing for engineers in West Texas. In the 1970's, IBM subsidized housing for employees in Boulder.
opportune 4y ago
I want more businesses to try this. I think the kneejerk “company town bad” misses a lot of the contextual differences between how and why they were needed in the past, vs what employer-built/managed housing would look like today. For starters, company towns in the past (and these actually still exist) were usually for raw resource extraction in isolated areas. The workforce was a lot poorer than today and whereas now you could probably go on SSI or take a different job to not starve, people were desperate enough to take these jobs just to put food on the table. Once there, technology and infrastructure were such that connections to the outside world were difficult to make, and done by the company (who imported all the goods and provided all the services). So yeah, putting a lot of desperate people in complete control of a for-profit business led to a lot of abuse, de facto indentured servitude or what we now call debt bondage/ modern slavery, and other bad stuff. Employer housing in a place like the Bay Area would be entirely different. You’re completely connected to the rest of the world, you’d have plenty of money and options to switch jobs or engage in consumption outside the company development, you could just take your pay and use it for non-corporate housing (just like some people do with company food). There are for sure pitfalls we’d need to prevent, like lease or mortgage terms that make it too hard to switch jobs, or the employer being too nosy about what happens in its housing. But like, this model is a thing we’re all familiar with already in the form of university dorms, live-in resident managers, military housing, except it could be even more hands off. I actually think it would incentivize a lot of win-win outcomes. Employees get reasonably priced housing, employers offer a perk with nice balance sheet effects, employees get to live in presumably a safer area nearby (but not with) friends and acquaintances (ie a community), employees get a short commute, employers don’t have to pay out the nose for expensive third party corporate housing, employers get to capture positive externalities of job creation, it incentivizes development and would actually be able to make it happen because it’s a priority for a well funded and more importantly well-organized pro-housing entity… and if you thought it were creepy or better for young people than families you could just not use it. It’s a little dystopian at first glance, serfdom yadda yadda, but in the Bay Area we already have serfdom except our lords are random people who bought or inherited housing when it was cheap in the 70s-90s. And those people fight tooth and nail against development which keeps prices high and them in power. If we’re gonna have lords I’d rather have them be pro-development and giving me shares of their fiefdom.
nfriedly 4y ago
I've read that unions used to build affordable housing with the union members retirement funds, but a law was passed (maybe Taft–Hartley?) that said they had to focus on returns only, rather than consider any other benefits. So, unions don't build affordable housing any more.
- FateOfNations 4y ago
  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.
Tade0 4y ago
My father used to work at a university, which provided apartments for its employees as a benefit. Largest place I ever lived in. Anyway I can't imagine actually buying a place from my employer. What if I get laid off like so many already have during the last 12 months? These things tend to happen every 20 years or so.
- FateOfNations 4y ago
  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.
kyleblarson 4y ago
Pretty cool "company town" near where I live in Washington State: https://en.wikipedia.org/wiki/Newhalem,_Washington https://en.wikipedia.org/wiki/Newhalem,_Washington
xchip 4y ago
That was pretty common in Spain 50 years ago. One of the reasons was to show off the capitalism was better than communism.
User23 4y ago
I recall thinking when Amazon was building out SLU that they should just go ahead and build the apartment buildings too. Why let Equity Residential take the vig? At that point they could include housing in the comp package and it would essentially be a barter arrangement of work for housing. While that's still taxable, it would help maximize the ever important future free cash flow. If that pattern became widespread popular then I expect some kind of COBRA, but for housing, would be legislated.
jbverschoor 4y ago
Back in Egyptian times, they’d call it slavery. I thought that was banned
- tacocataco 4y ago
  Hasn't it always been legal to enslave prisoners?
than3 4y ago
Safety and Liability will always be an issue. Monopolistic and malign practices always creep in. Say you miss and are late on rent, and then walk in to find you've been terminated. They won't say its because you were late on rent, but its not outside the possibility that they'll have some other manufactured excuse. Maybe the buildings have ongoing recording that isn't disclosed, Wayward Pines style. The incentives for this only make sense when you factor in the additional malign control the company gets over the employee. Reminds me of that one TV series "The Colony" (not a post-apocalypse type movie).
iancmceachern 4y ago
This reminds me of how NYU is one of the largest property owners in Manhattan and makes a metric shit ton of money renting accommodations of various types to students and faculty.
theshrike79 4y ago
I come from a small factory town in Scandinavia (under 10k population). Up until the late 80's the factory either provided ready-made housing or backed the loans of employees who wanted to build a home in the town. That's how a bunch of my aunts and uncles got a cheap loan to build a home in their 20's. The bank had practically zero risk when a multimillion company was co-signing the loan.

153 points by isaacfrond 4y ago

As long as these company investments are proximate to cities and towns where partners can find fruitful employment in other companies, children have access to good schools and activities and the various kinds of people required for life have easy access (medical, fire, cops, …). If the companies instead want a monoculture of single, childless workers it’s going to be (quite) unstable.

ta1243 4y ago
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.
- smeej 4y ago
  The article specifies that the people are buying, not renting, the houses, and they're even subject to rules (probably an HOA) saying they cannot rent the homes to others. If they want to sell in the first 3 years, the company has an option to buy the house back for what it was sold for, and for four years after that, the company has right of first refusal to buy the house at market rate. This sounds like a fairly reasonable compromise to me, though it's far from the only model that would make sense.
  - ldhough 4y ago
    I've seen people say this a few times here but the article says: "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."
    - smeej 4y ago
      And if you read past the introduction, you'll find the article is about one specific instance, which is what people are talking about.
      - ldhough 4y ago
        I did read that but it seemed pretty clear that the comment thread and the comment you were responding to were not in fact discussing one specific instance, but rather the broader phenomenon: > these company investments ... > If the companies ... > Having your employer [not "having Cook"] as your landlord ... Although given that your comment was clearly about the case study I should have made clearer that my intent was to communicate that just because Cook isn't renting the houses that the parent commenter's concerns are still valid because more companies are.
- pc86 4y ago
  You're responding to things irrelevant to the article - the employers are not landlords, don't own shops. Nobody is renting anything. The company doesn't own anything.
  - ta1243 4y ago
    "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. " Seems relevant to me
- bell-cot 4y ago
  > 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 A century ago, at least in America, we had Prohibition* - so "no booze" was the law, no matter how the company felt. *https://en.wikipedia.org/wiki/Prohibition_in_the_United_States https://en.wikipedia.org/wiki/Prohibition_in_the_United_Stat...
- vineyardmike 4y ago
  When I worked at Google, there was a group for people to advertise apartments to each other in SF. I think 20% of them were rentals owned by VPs/Directors or other high level employees. that seems like an even bigger conflict of interests. When you rent from a megacorp, there’s realistically a million levels of bureaucracy between “work weekends” and “rent review”. When you rent from your skip level manager… your landlord can be directly approving your raises AND rent rates. …might help with layoffs though.

coldtea 4y ago

All kind of robber-baron capitalist crap is coming back to fashion, along with neo-feudal crap... https://en.wikipedia.org/wiki/Company_town https://en.wikipedia.org/wiki/Company_town

quickthrower2 4y ago
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.
- Kaotique 4y ago
  Good luck selling that house in a company town to anyone outside the company.
  - smeej 4y ago
    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.
    - coldtea 4y ago
      How does this refute the parent's argument? If anything, it just says how similar it is with the already problematic case of "one major company town". And this is even worse, as it's not "one major company town" but "just a major company and nothing else town".
- coldtea 4y ago
  >So they wont be paying rent for the rest of their lives to the company, and presumably they can sell the houses later To newer incoming employees? Who else would buy it? Not to mention the houses will be near worthless if the company moves from the area. This ties the employee with the company, but not vice versa.

maxehmookau 4y ago

The village of Bournville in Birmingham was created for this very purpose: https://en.wikipedia.org/wiki/Bournville https://en.wikipedia.org/wiki/Bournville It didn't go quite as planned now though. The factory is owned by a US multinational and most of the homes are underoccupied and overpriced.

krisoft 4y ago
> 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".
- maxehmookau 4y ago
  Oh, don't get me wrong, it's beautiful. (I live very nearby). But it's definitely not a village with affordable housing for the local factory workers. It's a pretty village where rich people live, and aspiring rich people want to live. It went _well_, just not as planned...
  - blitzar 4y ago
    It went as planned, the rest of the Country went down the toilet.
    - _Wintermute 4y ago
      The UK is full of nice places where people can't afford to live. I don't see how this is any different.

zackkatz 4y ago

Headline: Innovative company reinvents company town. Visionary leaders hope to drive employees into debt and eventually forced servitude.

labster 4y ago
Headline: You’ll never guess what this worker got for hauling sixteen tons
- tommica 4y ago
  Nothing!
- orwin 4y ago
  Another day older and deeper in debt?
autoexec 4y ago
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-wal-mart-de-mexico-worker-vouchers-idUSN0546591320080905 https://www.reuters.com/article/mexico-walmex/court-outlaws-...)
- fathyb 4y ago
  Isn't this similar to McDonald's point system? Workers get points as they work, different menu items cost a certain amount of points. They have to use all points (and eat their terrible food) before a certain period, else they lose them.
  - autoexec 4y ago
    If McDonald's is taking money out of people's paychecks and replacing it with McPoints or whatever they call them, then yes. Companies can give prizes or awards on top of paying their usual wages with actual money, but as soon as they start paying people less because they're compensating them with fake money it's a problem.

wink 4y ago

Guess it depends on so many factors. I live in an 8 story building and I hardly see my neighbors, so unless we could car pool some days I couldn't care less if coworkers past and present I like or dislike are living next door. We have many blocks of old "company" apartments for the railway employees (used to be state owned, so even a little different) in my town (and probably in the whole country) - so they're technically co-workers in an org with many 10k of employees, but the chance your neighbor is visible in your daily life at work is pretty slim. Kind of a non-story, but if it helps the employees it sounds good, not much to discuss I guess?

ghaff 4y ago
"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.
- HPsquared 4y ago
  [flagged]
  - eppp 4y ago
    Seems kind of silly to pay rent for company housing though.
    - HPsquared 4y ago
      It has to be paid for either way. Could be offered to rent by employees or simply provided as benefit. Probably tax rules will decide which path to take...
  - mperham 4y ago
    Companies already control workers by controlling access to their health care (wanna start your own business? quit a toxic work environment? can't because you can't afford losing healthcare!). This is one solution to the lack of housing but a massive side effect is that we consolidate even more power in the hands of employers.

vcryan 4y ago

This is very silly. I don't want any part of my personal life connected to my employer.

dreen 4y ago
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.
- JohnFen 4y ago
  I am a huge believer in keeping my personal life as separate from my employer as I possibly can, for a whole host of reasons. I may technically spend a lot of time with my coworkers, but we're working, not socializing. My coworkers are acquaintances, not friends. That's not the same as being emotionally isolated. You still (presumably) have friends and family.
Hamuko 4y ago
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.
- lallysingh 4y ago
  It's not just the people. It's also the same company providing your home, utilities, etc. Are the prices and quality at market norms or are you paying back your wages for extra profit to your employer? That's a lot of eggs in one basket.
  - Hamuko 4y ago
    I'm buying the home from the company with a mortgage from a bank, which I assume is not the company's bank. I'd also assume that the utilities are covered by a third-party. And if I have to move somewhere where there's basically no utility companies outside of my employer to service the area, then moving there is basically putting all of the eggs in one basket anyways.

Mizoguchi 4y ago

Some people don't have much of a social life outside work so colleagues become their friends and support system. It may sound depressing but many are perfectly happy living like this so in that context this sounds like a good deal to me.

quickthrower2 4y ago
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!

Wronnay 4y ago

Ford did similar things... "The Ford Motor Company's interest in employee loyalty went far beyond the shop floor workers. Ford owned a great deal of land near Detroit and established a land development subsidiary explicitly for the purpose of erecting middle-class housing for managers and supervisors. These homes in Dearborn were completed in 1919."

consp 4y ago
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.

RcouF1uZ4gsC 4y ago

I think selling the houses is fine. Renting them out, brings up issues of company towns. But as long as they are sold, I don’t see much of an issue. If the company is large, it is likely that a significant number of people in any new housing development close to the company would be employees of that company. In addition, with the ebbs and flows of employment, it is likely that the housing would end up getting sold later at market prices to people who did not work for the company. In addition, having company built housing, ends up relieving the price pressures on housing in the area. I think this overall is a good thing, as long as the houses are being sold, not owned and rented out by the company.

dagw 4y ago
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.
- smeej 4y ago
  That risk exists for any home purchase in a small town/area with one major employer, not just homes the company helped build. If you work for the company and live in the town, you take on that risk, regardless of whether the company helped build the house.
  - dagw 4y ago
    Indeed, that was my argument for renting your company housing instead of buying it.
discardedrefuse 4y ago
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.

blitzar 4y ago

Honestly, give me the company town, the job for life, the fat pension, the regular promotions, the company schools, the company scholarships to send your kids to university and I will live next door to whoever you want.

lozenge 4y ago
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..."
- segfaltnh 4y ago
  Surely there's no histoic examples of this happening. Especially not in America. /s
- cj 4y ago
  >Why do you trust the company will continue to provide said benefits? Not sure if this is a great example from history. But my 87 year old grandmother still receives a monthly pension check from IBM from my late grandfather who passed away 6 years ago and retired over 30 years ago. I'm sure IBM wouldn't be making these payments if they had any other option. I think the answer to your question is "because they are obligated to" via contracts signed with employees (and ex-employees, and even deceased employees).
  - lotsofpulp 4y ago
    One could counter that example with the multitudes of businesses who failed on meeting their defined benefit pension promises, resulting in laws like ERISA 1974 and PPA 2006, which resulted in businesses ceasing to offer defined benefit pensions because it turns out, predicting decades of future economic conditions and insuring volatility for that length of time is insanely costly. Not to mention that IBM has been dying for a decade+. I certainly would not expect them to make good on any decent size DB pension in a few decades, and unless you are part of a politically connected group, you may or may not get fully bailed out by the feds (see General Motors pension renegotiations in 2008). See also multi employer pension plans which have crazy regulations where if one employer fails, the other employers gets to pick up the tab. https://www.americanactionforum.org/insight/the-american-rescue-plan-and-multiemployer-pensions/ https://www.americanactionforum.org/insight/the-american-res...

voxadam 4y ago

Sounds a little like Henry Ford's idea for Fordlândia[0] down in Brazil back in the late twenties. [0] https://en.wikipedia.org/wiki/Fordl%C3%A2ndia https://en.wikipedia.org/wiki/Fordl%C3%A2ndia

walterbell 4y ago

Sixteen Tons by Tennessee Ernie Ford (1956), https://www.youtube.com/watch?v=S1980WfKC0o https://www.youtube.com/watch?v=S1980WfKC0o

tinglymintyfrsh 4y ago
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.

Aeolun 4y ago

I think it’s interesting that all the people in this article that need housing assistance are clearly overweight, and the rich (presumably) ones are all thin.

smeej 4y ago
What a bizarre presumption to make with no evidence whatsoever.
- Aeolun 4y ago
  The article shows two pictures of people needing the housing, and two of people building the housing. The builders look healthy, the buyers are obese. What makes this a bizarre presumption?
JohnFen 4y ago
It's almost like you have to have a pretty healthy income to be able to afford to eat decently.
- deleted 4y ago
  [deleted]
- SoftTalker 4y ago
  It's not true, though. You can eat decently more cheaply than you can eat junk food. People just like junk food better, and stuffing your belly with high-carb "comfort food" is basically a compensation mechanism if not an addiction.
  - JohnFen 4y ago
    > You can eat decently more cheaply than you can eat junk food. Whether or not that's true depends a lot on where you live. In economically depressed areas, just finding decent food is a challenge, let alone being able to afford it. In the US, it's generally cheaper to buy processed foods that are heavy on salt, sugar, and fat than it is to eat fresh, healthy food. There's also the issue of food preparation. Many (maybe most) people don't know how to cook from scratch in a way that is fast and healthy.

rsecora 4y ago

It was a common practice in the XIX and XX century, because there were not good living areas near factories. Some big conglomerates build houses for their workers, and they assign them to employees based on category, family size or marital status. Example Berlin [1] [1] https://en.wikipedia.org/wiki/Siemensstadt https://en.wikipedia.org/wiki/Siemensstadt

smeej 4y ago

I think the people complaining in this thread would complain about anything. 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. But then when a company, which is big enough, especially relative to its small town, does do the hard work of negotiating construction contracts and helping people find financing so they can sell homes at cost by removing inefficiencies from housing production, complain about that too? Some important points from the article: 1. The houses are being sold, not rented. 2. They're being sold at cost. 3. Anyone who buys one can sell it later to someone outside the company. The only restrictions are that 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. Is it a perfect solution? Of course not. These are humans. Humans don't come up with perfect solutions. But if you're going to complain, what would fix it for you? And is that just a matter of personal preference? 'Cause it's not like most of you are willing to live in a Midwestern small town with one major employer in the first place, but clearly these people are.

davidw 4y ago
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.
zyang 4y ago
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.
- pydry 4y ago
  Or just makes it harder to move jobs which inevitably makes people more exploitable. It's not exactly bad ideas getting us into this situation but a rapid shift in power from workers to owners.

cvccvroomvroom 4y ago

Woz did one step further: had custom homes built beside one another.

deleted 4y ago

[deleted]

JohnFen 4y ago

Well, it seems our return to "the guilded age" is complete with the return of company towns. It's only a matter of time before we start hearing the same horror stories that we heard in that era.

CatWChainsaw 4y ago
Only this time whistleblowers will be drowned out by accusations of astroturfing/botfarming. Progress!

AlbertCory 4y ago

Pullman, only a couple miles from where I grew up. The houses are beautiful and still in use: https://www.pullman-museum.org/theTown/ https://www.pullman-museum.org/theTown/ It was also the site of the famous Pullman Strike of 1894: https://www.history.com/news/labor-day-pullman-railway-strike-origins https://www.history.com/news/labor-day-pullman-railway-strik...

m463 4y ago
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 https://en.wikipedia.org/wiki/Pullman_Strike

omgomgomgomg 4y ago

So your housing and your job depends on the company? Ever had a bad boss? No thanks, unless the rental agreement is untouchable. They make a profit or two and increase your dependencies.

anoonmoose 4y ago
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.
- AlexandrB 4y ago
  And then the sixth paragraph says: > 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.
wnolens 4y ago
Healthcare, too.

jonathankoren 4y ago

If Facebook ever does build their employee housing, it really needs to be named Zuckerburgh.

Tade0 4y ago
-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_Germany https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_Ge...
- jonathankoren 4y ago
  And Pittsburgh is pronounced “Pittsberg”

abeppu 4y ago

> What about simply raising workers' pay? Median U.S. wages have long failed to keep pace with rising housing costs. But Ferguson says that raising pay won't create new homes. > Only 10 of the first 14 houses found buyers immediately. Walker says some interested employees can't break their lease yet or need more time to improve their credit scores or save for a down payment. If even when selling them at cost, the company doesn't have employees lined up and ready to purchase, then it sounds like their wages _also_ need to come up. They're not paid enough to have the financial stability to save even for a home being sold at cost.

Finnucane 4y ago
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.
FateOfNations 4y ago
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.
carlosjobim 4y ago
> 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.

systemtest 4y ago

Company housing is used in The Netherlands to pay people below minimum wage. Migrant workers (often seasonal) get paid minimum wage to work in agriculture, in fulfilment centers or similar jobs and have to pay a very high rent to their employer for renting subpar housing. That way the employer effectively pays less than minimum wage due to money flowing back in the form of rent. Terrible all around. Due to the housing crisis and people not being open to rent out their home to migrant workers this is often their only option. https://www.youtube.com/watch?v=Ab9L_I1WU6w https://www.youtube.com/watch?v=Ab9L_I1WU6w

llsf 4y ago

Michelin started his own experiment in 1920's. "The Group provided housing, schools, health clinics, swimming pools, and other recreational facilities in a system that became known as paternalisme (paternalism) or in more modern terms, societal or responsible support." "Rather than relying on union representation, Michelin management tried to foster the loyalty of employees through the generous provision of social benefits." source: https://www.hbs.edu/ris/Publication%20Files/Sucher%20Michelin%20Research%20Report%20%202021%202.11.21_d8433d7f-827d-44be-aed1-c30ff952e788.pdf https://www.hbs.edu/ris/Publication%20Files/Sucher%20Micheli...

davidjfelix 4y ago
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 https://world.hey.com/jason/changes-at-basecamp-7f32afc5o
- freddie_mercury 4y ago
  There is no legal incentive to maximise profit, this is a myth. In the Hobby Lobby case, the US Supreme Court made this explicit. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

mikestew 4y ago

If your employees can't afford to live Spencer-friggin'-Indiana, and your company name isn't "McDonalds", you're just not paying them enough. Now, granted, it's been a couple of decades since I've spent a lot of time in Spencer, but I cannot fathom that in the intervening years that Spencer (nice town as it is) suddenly exploded into a tech hub where no one can afford a house anymore. A quick glance at Zillow says that it is not hard to find what appears to be perfectly livable homes for <$200K. Many are larger, nicer, with a bigger lot than the ~$900K houses around me in Redmond, WA. So I don't know what's going on in the leading example in TFA. On the one hand, it's not Mountain View, it's as-rural-as-rural-gets-in-Indiana with low CoL. And yet the company says, "we can't find people because they can't afford to live around here". Something just doesn't add up to me.

opportune 4y ago
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
ChadNauseam 4y ago
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.

motohagiography 4y ago

Naively, I'm surprised it's not common(?) for large or well capitalized employers to offer favourable mortgages in their comp packages. Some banks certainly do it as a perk. It would also create a new asset for the company, where the loan itself could be sold on if needed. If you have a whole pile of balance sheet cash, buying up some city condos and leasing them back to key staff seems like a pretty good investment. You can use them to secure cheap debt if you need liquidity, or sell the leases, and it's an inflation hedge. It seems so simple and progressive that it must be illegal for some reason.

guepe 4y ago
Ski resorts house employees - at least it's very common in that industry. So clearly not illegal.
- carlosjobim 4y ago
  My experience with seasonal resorts is that employees are housed at no charge.
opportune 4y ago
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.

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gms7777 4y ago

I did a postdoc at a hospital in a HCOL city which offered still expensive but below-market hospital owned apartments for postdocs. It was a massive perk at the time and I'm not sure I would have even taken the job without it. Even setting aside the cost part, it was a massive relief just not having to visit the city in advance and trying to find an apartment in a brutal housing market and dealing with sketchy landlords. Of course it came with the stressful side of knowing that if I ever left the job (or was fired), I'd also need to move out of the apartment as well within a month.

cjohnson318 4y ago

Haven't companies been doing this for decades? Between 2000-2010 Halliburton subsidized housing for engineers in West Texas. In the 1970's, IBM subsidized housing for employees in Boulder.

opportune 4y ago

I want more businesses to try this. I think the kneejerk “company town bad” misses a lot of the contextual differences between how and why they were needed in the past, vs what employer-built/managed housing would look like today. For starters, company towns in the past (and these actually still exist) were usually for raw resource extraction in isolated areas. The workforce was a lot poorer than today and whereas now you could probably go on SSI or take a different job to not starve, people were desperate enough to take these jobs just to put food on the table. Once there, technology and infrastructure were such that connections to the outside world were difficult to make, and done by the company (who imported all the goods and provided all the services). So yeah, putting a lot of desperate people in complete control of a for-profit business led to a lot of abuse, de facto indentured servitude or what we now call debt bondage/ modern slavery, and other bad stuff. Employer housing in a place like the Bay Area would be entirely different. You’re completely connected to the rest of the world, you’d have plenty of money and options to switch jobs or engage in consumption outside the company development, you could just take your pay and use it for non-corporate housing (just like some people do with company food). There are for sure pitfalls we’d need to prevent, like lease or mortgage terms that make it too hard to switch jobs, or the employer being too nosy about what happens in its housing. But like, this model is a thing we’re all familiar with already in the form of university dorms, live-in resident managers, military housing, except it could be even more hands off. I actually think it would incentivize a lot of win-win outcomes. Employees get reasonably priced housing, employers offer a perk with nice balance sheet effects, employees get to live in presumably a safer area nearby (but not with) friends and acquaintances (ie a community), employees get a short commute, employers don’t have to pay out the nose for expensive third party corporate housing, employers get to capture positive externalities of job creation, it incentivizes development and would actually be able to make it happen because it’s a priority for a well funded and more importantly well-organized pro-housing entity… and if you thought it were creepy or better for young people than families you could just not use it. It’s a little dystopian at first glance, serfdom yadda yadda, but in the Bay Area we already have serfdom except our lords are random people who bought or inherited housing when it was cheap in the 70s-90s. And those people fight tooth and nail against development which keeps prices high and them in power. If we’re gonna have lords I’d rather have them be pro-development and giving me shares of their fiefdom.

nfriedly 4y ago

I've read that unions used to build affordable housing with the union members retirement funds, but a law was passed (maybe Taft–Hartley?) that said they had to focus on returns only, rather than consider any other benefits. So, unions don't build affordable housing any more.

FateOfNations 4y ago
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.

Tade0 4y ago

My father used to work at a university, which provided apartments for its employees as a benefit. Largest place I ever lived in. Anyway I can't imagine actually buying a place from my employer. What if I get laid off like so many already have during the last 12 months? These things tend to happen every 20 years or so.

FateOfNations 4y ago
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.

kyleblarson 4y ago

Pretty cool "company town" near where I live in Washington State: https://en.wikipedia.org/wiki/Newhalem,_Washington https://en.wikipedia.org/wiki/Newhalem,_Washington

xchip 4y ago

That was pretty common in Spain 50 years ago. One of the reasons was to show off the capitalism was better than communism.

User23 4y ago

I recall thinking when Amazon was building out SLU that they should just go ahead and build the apartment buildings too. Why let Equity Residential take the vig? At that point they could include housing in the comp package and it would essentially be a barter arrangement of work for housing. While that's still taxable, it would help maximize the ever important future free cash flow. If that pattern became widespread popular then I expect some kind of COBRA, but for housing, would be legislated.

jbverschoor 4y ago

Back in Egyptian times, they’d call it slavery. I thought that was banned

tacocataco 4y ago
Hasn't it always been legal to enslave prisoners?

than3 4y ago

Safety and Liability will always be an issue. Monopolistic and malign practices always creep in. Say you miss and are late on rent, and then walk in to find you've been terminated. They won't say its because you were late on rent, but its not outside the possibility that they'll have some other manufactured excuse. Maybe the buildings have ongoing recording that isn't disclosed, Wayward Pines style. The incentives for this only make sense when you factor in the additional malign control the company gets over the employee. Reminds me of that one TV series "The Colony" (not a post-apocalypse type movie).

iancmceachern 4y ago

This reminds me of how NYU is one of the largest property owners in Manhattan and makes a metric shit ton of money renting accommodations of various types to students and faculty.

theshrike79 4y ago

I come from a small factory town in Scandinavia (under 10k population). Up until the late 80's the factory either provided ready-made housing or backed the loans of employees who wanted to build a home in the town. That's how a bunch of my aunts and uncles got a cheap loan to build a home in their 20's. The bank had practically zero risk when a multimillion company was co-signing the loan.