What a housing shortage means for the future of work

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It hasn’t been built yet, but the plans for Willow Village, a 59-acre mixed-use neighbourhood in Menlo Park, Calif., seem like the pinnacle of progressive urban development.

It replaces an industrial warehouse complex in an underserved and lower-income part of the city and adds 1,729 apartments to a very strapped (and expensive) housing market, 320 of them designated as affordable housing and an additional 120 earmarked for seniors.

The plans, which were officially approved by Menlo Park City Council in December, detail a walkable mini-city that includes a supermarket, pharmacy, cafés, restaurants, shops, dog park – even a hotel and a town square. There’s just one thing that sets it apart from similar new developments: The landlord is Mark Zuckerberg.

Well, actually it’s Facebook’s parent company, Meta, which is leading Willow Village’s development with Oakland, Calif.-based real estate developers Signature Development Group.

The company says its motivation isn’t (only) capitalism. When the project was announced in 2017, the company explicitly cited the affordable housing crisis in Silicon Valley as a motivating factor.

“Part of our vision is to create a neighbourhood centre that provides long-needed community services. [And] housing is also critically important to these efforts,” John Tenanes, the company’s vice-president of global facilities and real estate, said at the time. “We hope to contribute significantly to the housing supply by building 1,500 units of housing on the campus, 15 per cent of which will be offered at below market rates.” (These numbers increased during the years-long approval process.)

Meta isn’t the only employer that’s tackling the current housing crisis in one way or another. Housing-related perks have historically been rare in Canada outside of companies that depend on attracting international candidates or regularly need to relocate existing staff, such as postsecondary institutions and tech companies.

The dire state of housing markets across the country means that’s starting to change.

“We’ve been in a situation for a few years now – and it certainly became more intense after the pandemic – where employers have a much more challenging time with recruitment and retention of staff,” says economist Jim Stanford, who’s the director of the Centre for Future Work, a think tank focused on studying the Canadian labour market.

Mr. Stanford says that a newly tightened labour market means employers have to work much harder to attract and retain talent.

“Employers have to think about what kind of package they’re going to offer prospective employees and right now, particularly in major cities, housing is a big crisis in working people’s lives,” he says. “It’s hard to find, whether it’s rented or owned, and it’s very expensive. It should be a no-brainer for employers to connect those two dots.”

A lack of affordable housing can cost companies money even if employees don’t quit. When workers can’t afford to live in the same city as their employer and must instead make a long daily commute, the company loses out on employee productivity.

There’s also a larger societal impact, says Mwarigha, vice-president of housing at Toronto social service agency WoodGreen. He points out that when PSWs and other front-line workers are commuting to Toronto from its outer suburbs, it can contribute to delays for Torontonians who need those services.

Some companies have been thinking about housing for years now. At the University of British Columbia, for example, there are 685 rental housing units on campus that are earmarked for full-time staff and faculty, as well as a rent-geared-to-income program that allows participants to pay “30 per cent of their household income before taxes and adjustments to rent eligible units within the UBC Faculty Staff Housing portfolio.” The school also offers interest-free loans through its Down Payment Assistance Program.

Elsewhere in academia, the University of Toronto is building faculty housing at the intersection of Spadina Road and Bloor Street in downtown Toronto because the institution is losing young professors owing to the housing crisis, says Karen Chapple, professor in the school’s department of geography and planning and director of the School of Cities. (She also consulted on Meta’s Willow Village project.)

Meanwhile, in Vernon, B.C., the Roster Sports Club Bar and Grill, a restaurant and racquet club, recently bought a property consisting of two legal two-bedroom suites, which it rents to staff at an affordable rate. Owner Anya Hollands decided on this course of action last summer, when her company was growing but she was struggling to hire more staff.

Of course, most employers who are thinking about housing aren’t entering the real estate market – in addition to being expensive, there’s just not that much land available in the cities where housing needs are the highest.

Plus, workers may be skeptical of the quality of housing they would receive, not to mention being in a situation where their boss is also their landlord. As Mr. Stanford points out, it’s fair for an employee to ask “what does that mean for my housing security if I end up in a situation of conflict with my employer, as happens in the real world?”

Instead, companies tend to offer small grants or interest-free loans to help employees. For example, Mattamy Homes gives employees a 4.5-per-cent discount on their purchase of a new Mattamy home, a benefit that resets every five years, while software company Esker offers employees $1,000 “flex funds” that can be used for first-time homeowner assistance.

But these perks usually only apply to so-called knowledge workers, and even then, they’re most often offered to very senior-level employees – who often aren’t the ones experiencing the most strain. Which brings us to salary, flexible schedules and remote work.

According to a 2017 Benefits Canada article, most employers opt for the simple solution of raising workers’ base pay rate to account for housing costs close to their offices. And while most employers would prefer to see their work forces return to the office, employees overwhelmingly prefer remote work, so that can be one way to attract and retain talent.

“Maybe it will take the market becoming more desperate for people to innovate more, but the only lever [employers] have is remote work. So they can’t give you a housing voucher, but they can say you can work from home four days a week,” Dr. Chapple says.

But what about the millions of Canadians who largely can’t work from home, but who are just as, if not more, susceptible to rising housing costs?

In 2020, WoodGreen collaborated with the Toronto Region Board of Trade on a report that makes the case for “work force” housing, which is a type of affordable housing that serves “the needs of households who earn above thresholds for traditional social housing programs, yet still struggle to find suitable accommodation within their budget. …. [These are] people who serve the city and yet can’t afford to live in it – including nurses, custodians, health care workers, shelter staff, hotel workers, teachers, artists, cultural workers and restaurant workers.”

“Work force housing is not a subsidy to individuals,” Mr. Mwarigha explains. Instead, it’s “a way to create housing that matches their level of income and provides a decent quality of life and a decent quality of living space.”

And, he says, it’s important because it helps reverse a cascade effect: Thanks to stagnating wages, rising housing costs and the dismantling of the Canada Assistance Plan (an integrated policy that tackled income, the labour market and housing that was in effect from the 1960s to the early 1990s), middle-income workers are struggling and must look to affordable housing solutions – which then pushes even more vulnerable people into homelessness, because there’s just not enough affordable housing to go around. Employers with land assets can partner with other organizations to develop work force housing, but they can also use their considerable clout to lobby municipal, provincial and federal governments to create an integrated housing strategy.

Because really, employers on their own can’t change housing – but a lack of affordable housing is shaping the future of work.