https://www.npr.org/2023/05/02/1172301798/workers-affordable-housing-companies-building

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Workers can't afford housing, so some companies are building it
Businesses like Cook Medical in Indiana say the housing shortage
makes it harder to recruit and keep middle-income workers. Now, more
companies are building places for employees to rent or even buy.

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National

Would you live next to co-workers for the right price? This company
is betting yes

May 2, 20235:20 AM ET
Heard on Morning Edition

By 

Jennifer Ludden - Square

Jennifer Ludden

, 

Marisa Penaloza headshot

Marisa Penaloza

Would you live next to co-workers for the right price? This company
is betting yes

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[tommie-jon]
Enlarge this image

Tommie Jones visits the new home she's buying from her employer, Cook
Medical. It will be the first time the 47-year-old quality control
inspector has a place of her own. Marisa Penaloza/NPR hide caption

toggle caption
Marisa Penaloza/NPR

Tommie Jones visits the new home she's buying from her employer, Cook
Medical. It will be the first time the 47-year-old quality control
inspector has a place of her own.

Marisa Penaloza/NPR

Tommie Jones loves her job as a quality control inspector for Cook
Medical in rural Spencer, Indiana. But she hasn't been able to find a
place she can afford on her own, so at age 47, she's squeezed in with
her sister's family.

When Cook announced a year ago that it would build hundreds of homes
to sell to employees at below-market prices, Jones was among the
first to sign up.

On a recent afternoon before her shift, she's bursting with
excitement as she gets her first visit inside the nearly finished
three-bedroom, two-bathroom ranch house. "It's so beautiful!" she
says, walking around to check out every detail. She marvels at the
Lazy Susan cabinet in the kitchen, the lush green view of the
backyard and the size of the primary-bedroom closet.

"This is as big as my room now," she says.

Cook's move isn't purely philanthropic. As rents and home prices
across the U.S. have skyrocketed, more companies are finding it
harder to recruit and retain middle-income workers. Record-high job
openings and low unemployment have made the competition worse,
fueling staff shortages.

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. They include big names like Disney and Meta, the
meatpacker JBS and local school systems and health care providers.
Elon Musk is reportedly planning a new neighborhood in Texas for
employees of his companies SpaceX, Tesla and Boring. The trend
underscores the scale of the country's affordable housing shortage
and the ripple effects it has on the wider economy.

[spencer-co]
Enlarge this image

The first 14 homes of a larger subdivision being built in Spencer,
Ind., by Cook Group, the parent company of Cook Medical, will be
ready for occupancy this summer. Jennifer Ludden/NPR hide caption

toggle caption
Jennifer Ludden/NPR

The first 14 homes of a larger subdivision being built in Spencer,
Ind., by Cook Group, the parent company of Cook Medical, will be
ready for occupancy this summer.

Jennifer Ludden/NPR

In Spencer, Cook's brand-new subdivision, Pike Place, is taking shape
in what used to be a wheat field. Two rows of clapboard ranch homes --
14 so far -- now line a dirt road. As Jones visits, a construction
crew is pouring concrete driveways.

At first, she wasn't sure she wanted to see work colleagues on her
off-hours. "But they're all super-nice," she says. "I can see us
helping each other out if we need it and that it's going to be a
community."

The U.S. needs more affordable housing -- where to put it is a bigger
battle

National

The U.S. needs more affordable housing -- where to put it is a bigger
battle

Cook is offering these homes to employees at below-market prices.
It's an incredible opportunity for Jones, who has been with the
company nearly four years and -- with extra pay for the swing shift
and her work as a trainer -- makes just over $20 an hour.

"I would have never imagined I could have a new house on what I make,
but I can," she says. "I get a little emotional."

It's tough being a big employer where there's "no place to live"

Cook is by far the largest employer in the area, with some 700 people
at its Spencer plant alone. Based in nearby Bloomington, it
manufactures medical devices like catheters and needles, part of a
booming global industry. It offers solid jobs that don't require a
college degree, but many of its workers can hardly afford to live
near Spencer.

[spencer-pl]
Enlarge this image

Cook plans to build 99 houses in Spencer, plus another couple of
hundred in a different county, where many workers commute to its
plant in Bloomington. Jennifer Ludden/NPR hide caption

toggle caption
Jennifer Ludden/NPR

Cook plans to build 99 houses in Spencer, plus another couple of
hundred in a different county, where many workers commute to its
plant in Bloomington.

Jennifer Ludden/NPR

The town is tiny, just a few blocks around a central square. The
entire county's population is only about 20,000. There hasn't been
much new housing for years, and what has been built is too pricey for
plant workers on hourly wages. Older, cheaper homes often get snapped
up by buyers with cash, and they might need expensive upgrades. Cook
employees were having to live farther out, meaning increasingly long
commutes.

"Availability of labor is just really short," says Steve Ferguson,
chairman of the board of Cook Group, the parent company of Cook
Medical. "And you're trying to hire young people to come, and there's
no place to live."

To keep home prices low, Cook cut a deal

In a 2021 company survey, 136 people said they were interested in
buying a house. But as Ferguson researched the lack of affordable
places, he was told that contractors don't want to build smaller
homes because there's not much profit in them. And banks don't want
to finance smaller mortgages because they carry more risk for less
profit.

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. And he didn't want to build
rental units, because he says it's too messy to be both employer and
landlord. He's also thinking bigger.

"You don't build communities with apartments and rentals," he says.
"And people don't build wealth living in apartments." Instead, he
wanted to build houses where people could "raise their kids and live
there their entire life."

[steve-ferg]
Enlarge this image

Steve Ferguson, chairman of the board of Cook Group, says he'd like
to see businesses play a larger role in tackling the nationwide
crisis in affordable housing. Marisa Penaloza/NPR hide caption

toggle caption
Marisa Penaloza/NPR

Steve Ferguson, chairman of the board of Cook Group, says he'd like
to see businesses play a larger role in tackling the nationwide
crisis in affordable housing.

Marisa Penaloza/NPR

The new homes are roughly 1,300 to 1,500 square feet. Ferguson
originally wanted to price them all under $200,000 and keep monthly
mortgage payments no more than $1,000, but then inflation spiked,
along with construction costs. So the houses are priced between
$188,000 and $212,000.

To keep prices that low, Cook cut a deal. The builder works at scale
-- with no risk since there's a guaranteed buyer -- and there are no
real estate agent fees. Cook held homebuying workshops to help
interested employees prepare and connected them with local banks that
could finance a mortgage. People who still need help paying, like
Tommie Jones, can get it from a federal loan program for rural
buyers.

A California school district is asking families to rent rooms to
teachers

National

A California school district is asking families to rent rooms to
teachers

Local officials also helped extend sewer lines, water lines and roads
to the new homes, and one key advantage was the lack of much zoning
regulation. That means the project faced little opposition beyond
neighbors lamenting the loss of open space.

To Ferguson, building homes for Cook employees revives a long
tradition of business solving a problem when governments can't or
won't. The U.S. has a history of company towns, most famously by the
luxury rail-car maker Pullman in Illinois. A century ago right here
in Bloomington, he says, the Showers Brothers furniture-maker helped
finance homes for its employees.

Ferguson hopes Cook can be a model and says it has gotten calls about
the project from companies in other parts of the country. "We now
have a crisis nationwide," he says, "and I think business has to deal
with it."

"I don't think this will solve the problem"

But housing experts say the U.S. shortage is too vast for business
alone to fix. "I don't think this will solve the problem," says Katie
Fallon, who studies housing supply at the Urban Institute.

She also doesn't think companies truly want to become housing
providers, though she understands the pressure that's driving them to
step in. "We have desperately needed housing supply for 15, 20
years," she says. "The rate of housing production has just slowed so
drastically over time."

Fallon says there's a need for more federal and state housing
subsidies and for money to rehab buildings that are falling into
disrepair. She'd also like to see states and cities open up their
zoning so that it's harder to block new construction of affordable
housing.

Still, she says anything that adds more supply is good.

High inflation and housing costs force Americans to delay needed
health care

Shots - Health News

High inflation and housing costs force Americans to delay needed
health care

In Spencer, the head of the local chamber of commerce thinks the Cook
homes could be transformative and encourage other development. Marce
King has helped out by organizing a lottery for would-be buyers,
since the company did not want to be in charge of picking who gets
homes.

She also recently held an open house for interested workers and their
families and says she found the experience surreal after watching the
local population shrink for more than a decade. "For this young
couple to walk through the door, and they were prepped and ready ...
and they had smiles on their faces," King says. "It's so exciting."

The new homeowners will face some limits on reselling

Cook's long-term plan is for 99 houses in the Spencer subdivision and
a couple of hundred more in a different county, where many workers
commute to its plant in Bloomington. Officials have said they might
build even more homes if there are still workers wanting to buy them.
The company's goal is to sell at cost and break even financially.

[ron-walker]
Enlarge this image

Ron Walker, who heads the Cook Group company developing homes in
Spencer, says employees who buy the homes don't have to stay with the
company, but they face some limits on reselling. Marisa Penaloza/NPR 
hide caption

toggle caption
Marisa Penaloza/NPR

Ron Walker, who heads the Cook Group company developing homes in
Spencer, says employees who buy the homes don't have to stay with the
company, but they face some limits on reselling.

Marisa Penaloza/NPR

Once employees buy, they are not required to stay with Cook. But Ron
Walker, who heads the Cook Group company that's developing the Pike
Place subdivision, says there are a few other requirements.

First, buyers must live in the home and not rent it out. If they want
to sell within the first three years, "we have the option to buy it
back at the price we sold it to you," Walker says. "And we're doing
that to keep people from trying to flip these homes in short order."

For four more years after that, homeowners will be able to sell at
market price, but Cook will still have first dibs to buy it back, he
says, "in case there was still a demand by Cook employees to get into
this neighborhood."

Rent control expands as tenants struggle with the record-high cost of
housing

National

Rent control expands as tenants struggle with the record-high cost of
housing

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.
Others say they're waiting for the next round of construction, which
will include two-story homes with four bedrooms.

Cook expects demand to grow as people see the neighborhood develop.
But if at any point there are homes with no takers within the
company, they'll be opened up for anyone. "We know the community
needs them, and they need them at this price range," Walker says.

First homes will be move-in ready by summer

Shelby and Ryan Bixler can hardly wait to move into their new home.
They're both quality control inspectors at Cook and just sold another
house to come here. It's an older one out in the country that they
bought three years ago, and it needed lots of updating.

[bixler-ful]
Enlarge this image

Cook employees Ryan and Shelby Bixler stand in front of the house
they're buying from the company. They say they never could have
afforded a new place like this at the full market price. Jennifer
Ludden/NPR hide caption

toggle caption
Jennifer Ludden/NPR

Cook employees Ryan and Shelby Bixler stand in front of the house
they're buying from the company. They say they never could have
afforded a new place like this at the full market price.

Jennifer Ludden/NPR

"There just wasn't much on the marketplace, and so we had to just
grab what there was," Shelby Bixler says. When they put their old
place on the market, it got snapped up in five days, so they are
living with family until the move.

As they walk around their new home, they admire the bigger bedrooms
and "humongous" closets. The couple did think twice about trading the
country for a subdivision with houses so close. But they've warmed up
to the idea. They have a toddler, and they're excited to be near all
the schools she'll attend in town.

"Living right next to people, I think, will be fun, especially as our
daughter is able to start playing with friends, and neighbor friends,
and having people over," Shelby Bixler says.

Plus, they already know and like one neighbor -- Tommie Jones, whose
house is right across the street.

Jones already has her things boxed up to go and has been buying wall
decorations for months, planning where to put everything. She has
picked out which room she'll have ready for her niece and nephew to
stay over in.

[bixler-1-_]
Enlarge this image

Homes in the first group of Cook houses have three bedrooms, two
bathrooms and granite kitchen countertops. The homes are priced below
market, from $188,000 to $212,000. Marisa Penaloza/NPR hide caption

toggle caption
Marisa Penaloza/NPR

Homes in the first group of Cook houses have three bedrooms, two
bathrooms and granite kitchen countertops. The homes are priced below
market, from $188,000 to $212,000.

Marisa Penaloza/NPR

The financing process has been exhausting, she says, though she's
grateful to Cook for guiding her through it. If not for that, she
says, "I would have never got financing, because I didn't know what
to do."

Jones has been so anxious to see her new house that she has made
multiple trips to peek through the windows as it takes shape. She
dreams of the day when she'll finally move in.

"I'm gonna lay down on the floor and just nap," she says, laughing.
"Because it's mine, and I can."

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  * affordable housing
  * real estate
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