Employer-Assisted Housing

History and Forms of Assistance

Employer-assisted housing dates back to the late 1800s and early 1900s when private-sector employers like the Pullman Company, Pennsylvania Steel Company, and Ford Motor Company built company towns or subsidized construction of communities to house a large number of workers near their major industrial facilities. It changed from these grand, episodic ventures to more modest but more commonly adopted programs to provide housing search, sales, and purchase assistance to corporate executives in the second half of the 20th century. During the 1990s, employer-assisted housing expanded in new directions as employers, unions, and government agencies developed programs to respond to specific job and housing market conditions, worker needs, and revitalization opportunities. Although the downturn in the economy and housing markets in the late 2000s reduced the prevalence of employer-assisted housing programs, they have continued to be implemented and adopted where public-private partnerships and market opportunities have coalesced.

As the U.S. Department of Housing and Urban Development (HUD) noted in its May 2000 overview of employer-assisted housing, programs fall into two basic categories—demand oriented and supply oriented. Demand-oriented programs help employees purchase existing housing. Typically, these programs provide home buyers with low-cost mortgages or grants, deferred loans, or forgivable loans to assist with down payment and closing costs. When mortgages are involved, they are typically originated by a private lender to whom the employer has guaranteed a minimum number of applicants or provided money for interest-rate buy-downs, mortgage guarantees, or mortgage insurance. Employers may also offer housing search and/or counseling assistance to employees in conjunction with, or in lieu of, financial assistance.

Supply-oriented programs create new housing through construction or rehabilitation and make those homes available to employees. The forms of employer involvement in supply-oriented programs vary more than those for programs that focus on demand. One example is for an employer to provide financing or land for a housing development or rehabilitation project with the assurance that some of the housing developed through the project will be set aside for employees and offered at a lower price than that charged to the general public. A second example is for a firm to guarantee the purchase of a certain number of newly constructed or rehabilitated housing units if the developer markets the homes to the firm's employees at a reduced rate.

While most employer-assisted housing programs focus on homeownership by reducing the cost of purchasing a house, programs have been extended to aid home improvements through grants or loans to existing homeowners or to those purchasing properties requiring substantial rehabilitation. A small number of programs also provide assistance to renters.

...