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.
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.
> It's the 'company town' problem all over where workers can be exploited with the constant threat of homelessness if they're terminated.
I think people on conflating it with that, but there is some distinction. The company doesn’t appear to have a monopoly on all housing, commerce, entertainment, and employment within the area, but are working to provide some housing options for its employees. It’s kind of hard to draw a direct parallel to “company towns” where the company controls everything.
The problem the complainers want to solve: More housing, more affording housing specific, for as many people as possible.
The problem the company is solving, specifically when they rent the house and don’t sell it: employee retention.
If a company wants to become a real estate developer and sell the housing to its employees, that’s fine. Assuming they’re actually increasing housing stock and not just gentrifying at the expense of locals. But as we all see with the American health care system, linking basic living needs to your employment is a terrible plan, and renting a company house sounds like “company towns” for that reason.
Going from employed, housed and insured to the opposite of all 3 because you got sick of your boss demanding you work weekends is pretty dystopian and exactly where this plan would lead.
Tl:dr- we don’t need any more fucking rentals, we need more home owners (generally, idgaf about anyone’s personal preference for renting or owning. If you want to hire a parasite to fix your pipes 3 weeks after they break in exchange for paying his mortgage that’s between you and your god).
Who’s “they”? This is the important part from the article you’re not discussion: “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.”
Renting from the company is bad, like my original post. It’s solving for employee retention, not affordable housing.
> Renting from the company is bad, like my original post. It’s solving for employee retention, not affordable housing.
If the rent is below market rate, it’s solving for both, at least temporarily during the employment period. Which may be ok or desired by the employee.
If the employee wants to stay within that area even after their employment ends, they can use the time that they are in the cheaper employer provided accommodations to find other housing. I think describing an employer provided housing for rent may really only be generally bad if the employer forces you to stay there and pay a captured rate as a condition of your employment.
The alternative is the company pays employees enough to afford to live in the area without having to rent them company housing. The free market system is broken and not working.
It's not a problem of being unable to build. This article mentions the company is building an _entire neighborhood_ with 14+ homes all brand new. That clearly isn't some lack of space or zoning problem.
The problem is the housing market has been inflated to astronomical levels because the housing industry is a critical part of our country GDP. If the price of homes fails to go up then banks will lose money and fail (just like in the aftermath of 2008). It's not profitable to build cheap, affordable housing so it doesn't happen.
There is also a lot of money sloshing around in real estate due to previous sustained low interest rates and QE. The problem is that some people can afford the current high prices (and will bid up anything they want), just everyone else can’t. Increasing money supply went into real estate for far too long.
Right, which is why I bring it up to directly refute the parent comment that it's not a company town because people have free will to simply live somewhere else. There is nowhere else they can afford, and that's the problem.
Exactly what did you refute? You downplay a company’s solution to a housing affordability problem by simply complaining that there is a housing affordability problem?
The company refuses to pay employees enough so they can afford what the market will bear for house pricing. Instead of--shocker!--paying employees more, the company is building housing to rent to employees so it can continue paying them peanuts. The entire system is broken and not in favor of the rank and file workers. The free market isn't working.
Ahh, so it’s apparent you didn’t read the story. The company is building new houses near a given plant that they are offering to sell to employees at a below market rate because local older homes are purchased quick by cash buyers. There is other housing in the area, but this company wants to give an option for a lesser commute to the plant for their workers. A quick Zillow search shows quite a lot of affordable rental housing at the same price point of a monthly mortgage of the company offered homes within a 15-20 mile radius from the Plant’s town. This is not an uncommon commute distance for a rural area.
If the employee leaves the company, they still own the home. The only caveat (and it’s understandable and reasonable IMO) appears to be that if the homeowner decides to sell the home within 3 years, the company has right of first refusal to buy the home at the same cost they originally sold it for to the employee.
You are making assumptions about the company’s motives that are based on your own biases. You seem to feel that the employee is somehow being wage abused for being offered a house to own at a below market rate. How is it that a) this situation describes a “company” town in the historical sense. And b) the employee is somehow abused for choosing to purchase a home below market value?
Ahhh you failed to read both the article and my original comment that started this entire thread. As I said there the first paragraphs of the article highlight that _most companies are buying property to rent, not sell_. They talk about a specific example of selling but the bottom line is more companies want to rent homes.
I read it, but I didn’t assume the article was about a single sentence literally found halfway in to the article that mentions the word “rent” (along with “buy” BTW).
At any rate, you want to complain about the problem, and claim that what appears to be a working solution for an employer and it’s employees is somehow spurious, but have offered zero solutions other than outrage.
We get it, you are mad about housing affordability and want to comment about your anger. Post a solution, both here and elsewhere in the conversation you seem to avoid that. So be it.
I've lived on military bases. You get subsidized housing. You get issued military furniture. You buy from the base PX. You follow the military's rules. This all goes away if you leave the military for whatever reason.
I don't recall anyone having a big problem with it, because if you did, you opted to live "on the economy". Your choice.
When you join the military you sign a friggin contract that gives up your rights. If you desert and run away _you can be killed_ by military tribunal and firing squad as punishment for example. Military housing and matters have absolutely no relevance here, unless you have some bizarre dream that we all live under a dictatorship with your employer at the top.
> It's the same in that you don't have to live on the base
Yes, you do. Unless you're married or are above a certain pay grade / rank. An awful lot of dumbass privates marry their hometown sweethearts and pop out kids just so they ain't gotta live in what are basically dorms.
And folks in the Navy often have to live on ship in the absence of the above options. The second my buddy from HS made E-4 him and 4 friends GTFO.
Military housing also has a lot of problems, and the water around several military bases (e.g. Camp Lejeune) is dubious; awful lot of EPA Superfund sites around bases...
Restricting resales for 3 years would be OK if the company would agree to no layoffs, no facilities closing, and no takeovers of the company or the local
facilities for three years, etc, etc.
Creating neighborhoods according to short-term needs is surely short-sighted. Houses should be built to last at least 50 years, and neighborhoods longer. Whenever things turn bad for the company that has built a neighborhood for its workers, things will likely turn worse for the neighborhood. It would be extraordinary for a firm to create a community in its own image and have that image be long sustained as praiseworthy.
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
My objection is the additional leverage it grants over employees. If by reporting a safety issue in the workplace, harassment or even just landing on a bad boss I risk getting evicted from my house - I'm going to be far more motivated to suck it up and deal with it. Strike? Eviction. Complain? Eviction. Try to unionize? Turbo-eviction.
Now that's less likely when the employee owns the house as the article says, but that'll change too. And of course it ties your fates together. If the company goes under, your house becomes worthless too. If you want to move to a new employer chances are you'll have to relocate anyways.
I guess next step is company scrip? What's old is new again.
In the specific case above you have purchased and own the house. Nobody can evict you. So you're comparing company-owned rental housing to companies buying tracts of land and constructing housing for purchase by employees, which is totally different.
The trouble with owning a house in a company town is that it's hard to sell it.
If the company won't buy it back, and they're the only local employer, and employment is declining, you're stuck. This is the story of many coal mining towns in West Virginia.
More likely you have a mortgage, and now there’s all the incentive in the world for the bank backing that mortgage to have a sweetheart arrangement with the company that “sold” you that property.
Has this ever happened in American history? That someone who was paying their mortgage was evicted because the bank had a sweetheart deal with someone? That's not how I understand mortgages to work.
- You buy your house from the company via a mortgage owned by the company bank.
- You start to build equity in your house.
- You talk on your lunchbreak with your coworker about whether a union would be a good idea.
- The company fires you for no particular reason.
- There are no other employers in commuting range, and your skill-set is not conducive to working from home. As a result:
- You fall behind on your mortgage. The company bank notes that you are delinquent and immediately starts foreclosure.
- The company real estate agency doesn't show your house to people. There are no other real estate agencies in this town.
- The company bank takes possession. You leave. The bank sells the house at auction. There is one bidder: the company-owned house leasing company. They bid less than the amount the bank is owed. The bank takes all of that money, as first creditor, and you get no money from the sale.
The company-owned house leasing company cleans it out and leases it or decides to sell it to another employee.
Fannie Mae just settled a foreclosure discrimination class action in which they where failing to maintain foreclosed properties in minority neighborhoods. This caused a chain reaction where nearby homes went underwater and were subsequently foreclosed upon.
Mortgage lenders have remarkable legal resources with which to make a homeowner’s life miserable. While they usually have a financial incentive not to, that doesn’t always pan out.
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.
Depends very much on the employer. I've spoken at length with a small sample (13, to be exact) leaders of companies from SMBs to mid-sized enterprises and they're all for national healthcare, as taxation is a relatively predictable expense and reduces overhead in other ways (like paying for benefit management services). Its also likely a shared tax, and in some cases is a net benefit for them because it makes recruitment easier (this in particular with blue collar businesses and those that aren't what would be considered traditionally technology companies. Benefits is a big part of the recruitment tactics still)
I think health insurance companies run the biggest two faced business of all time, extracting money out of companies and individuals while line driving the cost down as much as possible without benefit to those who use their plans. Cigna[0] even uses automatic denials based on automated heuristics, a human doesn't even look at the file, for instance.
I know "Medicare For All" programs aren't a silver bullet either, but I think it would at least put everything and everyone on a playfield that is even enough to have smaller reforms over issues that get missed in these proposals
Speaking from personal experience Cigna's line employees will also lie directly to your face on a recorded phone call while you're taking notes because their policies are geared toward following the letter of the law vis a vis retention while ensuring that their arbitration process effectively blocks you from suing them effectively unless you sue them before trying to work with them.
We've been quoted 6 weeks to have a manager listen to a phone call, which is the exact period of time that their call recordings are retained. They're the worst health plan I've ever had the displeasure of using.
They will also from time to time edit your explanation of benefits, which is against the law. Don't trust them and keep all the paper copies of everything they send you.
Minor point that you also have the non-profit Blues (i.e. Blue Cross Blue Shield) in the US health insurance marketplace, who are literally obligated to return healthcare savings to customers in the form of rates.
They have their own problems, but profit-mongering is not one of them.
What companies lobby against socialized medicine? Employer based health insurance is ridiculously expensive and the cost is usually hidden from the employee. You get quoted a salary net of benefits. And a lot of jobs are required by law to provide insurance which means the mandate could be a huge percent or the employees overall cost to the employer.
This is closer to employee 401k since you take it with you if you leave, which has been very beneficial even compared to pensions as you don't have to bet on your current employer being around and able to support the benefits 30 years from now
The law should require this disclosure upfront, or at least the proportion of premium of the metal level, such as employer will pay 50% of silver level plan within x network.
The employer is required to disclose total premium cost on the W-2 however, line 12 code DD I believe.
White collar employees that have marketable skills really benefit from being able to silo their risks in employer pools, because their healthcare costs are lower than those of blue collar workers.
I specifically remember people complaining about increasing premiums after Affordable Care Act because they would have to subsidize sicker people who simply did not have insurance in the first place, and I believe former Senator Lieberman from Connecticut, home to many health insurance companies, was able to capitalize on this and strip the “public option” from the Affordable Care Act.
The whole thing is an exercise in splitting the populace into various tribes of haves and have nots and pitting them against each other.
Another handout to big businesses by government is the pre tax purchase of health insurance premiums by a business for employees, but if an employee of a business that does not offer insurance subsidies buys it themselves, they have to pay with post tax income.
The health insurance companies? Both Ds and Rs collect millions in lobbying efforts from the healthcare industry; it's the 6th largest industry in terms of campaign contributions, more than the oil and gas industry.
Many other OECD states feature private insurance that's (at least largely) not employer-provided. Private coverage may be the main coverage for a large proportion, or even majority, of the population.
How does it differ from the US?
1) Less emphasis on or no norm of employers providing healthcare (and this may not be encouraged through tax law, leaving little reason to do it versus just paying more money)
2) These are often more tightly-regulated than in the US—coverage minimums (we kinda have these now, in the US, sort of, so that's nice), disallowing for-profit insurance, et c.
3) There's often a government fallback plan
4) AFAIK every single other OECD state leverages price controls in some fashion, whether de facto or de jure (usually de jure, in the countries with strong private insurance markets), which affects everything, including the price of private health insurance.
I feel like a broken record, as I’m always saying what you’re saying when people discuss health insurance. Most folks want to trash public health care under the quick quip of “that’s socialism” or trash “privatized health care” with the current employer-provided system as a proxy for “privatized health care”. People get so caught up defending “their side”, that they forget the objective is to get a better health care system.
IMO, a huge number of the problems that exist with US health care (non-portability between jobs, people stuck with plans ill-suited to their needs, lack of access to affordable health care) could be easily addressed by a ban on employer-provided healthcare with a provision to ensure the costs are forwarded to the workers as monetary compensation. Workers can go choose a plan that works for them.
The biggest misses were providing a government fallback plan (aka Medicare-if-no-other, which I don't think is part of it?) and regulating negotiations between providers and payers (so as to avoid payer combination into a few large companies, who can then get the best prices from payers).
One example is Medi-Share (https://www.medishare.com). I'm sure plenty people will find some reason to hate it due to the explicitly Christian theme and I'm sure there are some downsides I am not aware of. I do not use it myself, but I know several people who do, and they have used it to cover their bills. To a person, they are quite pleased with the cost and idea behind it. I haven't dug into it, but I find no issue on the surface. Maybe they refuse to cover sex change surgery or something and that makes them Literally The Worst, I don't know. The idea of "everyone puts in a bit and when someone needs help they take some out" is the basis of insurance as a concept, and it seems to work if there's just a little bit of gatekeeping. ACA and coverage of preexisting conditions under the insurance model really fucked things up imo. Not that preexisting conditions shouldn't be cared for, but as an entirely separate model.
It because a lot of people are already struggling with the cost of housing. It's hard to tell people they should be worried about this company exploiting them, when their only other option is to pay someone else even more money to keep a roof over their head.
> I think this is a tempting solution but a bad idea in the long run.
The best part about this plan is it sounds like the company doesn't want to be in this for the long run. Selling the homes rather than renting them, and having a fairly limited term on restrictions means in the long run, these will end up being just regular homes with a historic tie to the company. IMHO, this looks like the company doing something good for itself and its employees in a way that's hard to manage otherwise. Building the housing as a bulk project makes it less costly and easier to manage shared costs, but it would be hard for the employees to organize that on their own.
Perhaps in theory. But how hard are we-don't-build-housing employers currently lobbying in favor more housing for their workers? And how many orders of magnitude would employers providing housing have to grow by, before any cutbacks in that lobbying could have a meaningful effect?
Sure. But "if this was scaled up several orders of magnitude, and continued for years, then there would likely be bad side-effects" is a argument against doing pretty much anything. Ever.
It's also a really good argument for not putting all our eggs in one basket and for avoiding total homogenization of the systems by which we live. This is not currently practiced at scale, as anyone who has boarded a plane in one state and lands in identical surroundings in another state can attest.
> 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.
Company towns still exist in China. Heck, I think my wife owns a duplex in an education related development her father worked for. Full blown SOE company towns (not just buildings or neighborhoods) are stranger but then again employment is pretty much guaranteed for life (iron rice bowl) if you get to live there.
It isn't literally the same thing as a company town but the concept from the headline at least is close enough to cause a pretty visceral reaction. Honestly, even as explained in the top level comment I am uncomfortable with my corporate employer having any rights to my property after I leave their employ no matter how 'weak' they may seem. Work should be a fair exchange of labor or product for capital, imo. It's more a symptom of housing being used as an investment than as actual housing for humans that this is considered a good deal. If housing wasn't increasingly difficult to come by, this wouldn't even be on the table as a compelling offer.
The restriction that you have to own it for 3 years because you're getting it at cost seems aligned with nearly every government mortgage subsidy. They're normally loans that have to be repaid if you sell within a time period. And ROFR at market value after that doesn't seem like it has any negative effect on the seller.
And, to be clear, these restrictions would apply to someone who was still an employee and wanted to sell, not just to someone who wasn't an employee anymore. The restrictions are because of the financial considerations being offered at the purchase of the home, not because of the employment relationship.
Yeah. It's not super terrible. The restrictions are pretty reasonable to keep the company from being overrun with people that take a job, buy a house, and leave.
I don't think it's great for competition since smaller companies won't be able to offer the same incentive, but it does create downward pressure on the housing market and at least the employees end up owning a major asset.
Another way to look at it is the company providing enough total compensation for their employees to buy a house. It almost seems unnaturally altruistic which kind of freaks me out. Lol.
Generally exploitive features include: an exclusive buying right by a certain party (allowing them to set prices), incidentals and necessities of life only being purchased from a certain party, mortgaging future assets in exchange for current goods/services (often with steep or complex credit terms), and restrictions on free sale of assets to arbitrary third parties (preventing price discovery and realization of fair market value).
As GP observed, these specific modern agreements generally avoid those pitfalls.
How about Ford, in Dearborn MI? They were really into controlling their workers' behavior outside of work. If Ring had existed in Henry Ford's time, he would have had surveillance cameras in every home, reporting to Ford's internal sociology department.
This is such a visceral "oh no" for so many people that I've seen part of the rising tension of multiple horror movies, including one released this year, be either revealing or highlighting that an employee will be sleeping on employer-owned property, which the viewer is expected to implicitly understand to be dangerous. Which, in the horror tradition, goes back to gothic horror—Dracula, the live-in governess, that kind of thing. It's a well-trod trope that this situation makes one vulnerable.
Now, none of this (and even my original post) means it's necessarily a bad idea—but that, the actual history and the way we read that situation in fiction, is why people are inclined to immediately have a bad reaction to such a plan.
Companies built worker housing (and charged for it), paid workers in scrip that could only be redeemed at the company store. It became de facto slavery.
Throughout almost all of human history. An exceptionally few persons of any population owned their own dwellings, most people were a variant of servants/serfs/slaves to the landed gentry. Today's ruling generations decided that this order of things had to come back - and here we are again.
Some examples are the TVA/Arthur Miller's Norris TN, Pullman Chicago, Fordlandia in Brazil and Lowell MA (mills), with the latter 3 being popularly known mostly for the associated labor strikes.
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.
Absolutely. The Singapore HDB model is a great example to follow. [1] Almost 80% of Singaporeans live in HDB flats.
But the reason the government won't build is the same reason they don't let individuals build. They are beholden to the voting land-owning class who doesn't want to see the value of their properties go down by adding new supply.
Here the people excluded are non-residents and non-citizens. So the system works for all residents and citizens, to whom the government is beholden. It could just as easily be extended to include foreign workers, and they've been moving in that direction already. This is an explicit decision not an implicit one. It's not that the system wouldn't be able to support them due to some fundamental or intrinsic issue, it's a choice. That isn't true of the US model.
To me it sounds like failure actually. Kind of like soup kitchens, it's great that they exist, but I wouldn't cheer if 80% of people used their services. Free markets are better providing variety and choice, while governments are better at providing consistency and a minimum floor on quality.
A successful government intervention would look to me like ~0% homelessness but >90% living in privately produced housing.
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.
It's being explicitly sold to employees as a way to build wealth. Steve Ferguson, chairman of the board of Cook Group, the parent company of Cook Medical, said "And people don't build wealth living in apartments."
Seems like the guy who approved this project thinks its supposed to be an investment!
I mean, this is a company that has operated and expanded in this area for a long time. They are well established. Obviously nobody can predict the future but it's a pretty good bet that they will be there for another three years. That's a bet I'd take if I worked there. This is not an SV software company, it's a company that makes physical products, has a huge investment in the facility to do that, and have been operating in the area for decades.
Oh, I totally believe the company will still be there (although they could move the factory to another country, it's not unheard of.) My point is if you want to own that house, you need a job and they have most of the jobs. So if they fire you or you quit, you probably will have to sell the home back to the company. That's a lot of pressure they can exert on you.
Not in a 3 year period you don't build much equity. Equity is built more in the later years. After the first 3 years, on a 188k house at 6% interest over 30 years they will have accumulated a little over $5,800 in equity. Less than the realtor fees would be (except this was a direct sale). Not nothing, but at that point well worth crunching the numbers on renting vs. buying.
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.
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."
> 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?
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.
> 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.
Maybe if all the people in their 20s and 30s stopped watching the toktok and star comic and buying furbobbles and being too fat or too frail to work just got their act together and went to work we wouldn't have to hire 14 year olds!
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.
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.
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.
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.
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
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.
> Why not just sell these houses with no restriction even at a market profit?
Because they will be bought up by property management companies, headquartered in another state probably, who will turn them into rentals that the people there can just barely afford. Cook is trying to come up with an alternative to that.
It seems like that would only be viable if supply remains constrained. If they kept building for new hires plus a spare percentage, then holding tons of empty un-rentable properties seems like a bad return. It is a complicated question for sure.
The constraints are the political power of the ownership class. By discussing alternative solutions, we slowly build consensus, and eventually power to dismantle upper class power.
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.
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.