Workforce housing is difficult to find, and there are a couple of reasons behind it. Unless investors move away from conventional real estate investments, the chances of workforce employees finding a place to rent they can afford will always remain a dream.
With rising home prices, for employees earning minimum wage or 80% to 120% of their area’s median income, finding a house or apartment that falls under their budget can be challenging. Before we discuss the ‘whys’, let’s look at what makes workforce housing so important:
Typically, workforce housing is defined as affordable accommodation for low to moderate-income workers. However, industry professionals define it as affordable housing that is located near to an employee’s office. The range of eligible professionals for workforce housing includes service-industry employees, retail workers, first responders, and teachers.
The Importance of Workforce Housing
Workforce housing holds great importance for low-wage employees. Imagine the daily life of a first-responder. A call comes in about a burning building, and it’s an all-hands-on-deck situation, so all the firefighters are called in. Some live a little far away from the headquarters, and they have to make haste to reach on time.
Every second of delay will put a civilian’s life in danger, and this is why these workers need to be close to their office.
Three Reasons Why Finding Workforce Housing Is Difficult
1. Increasing Rent
Due to COVID-19, many people have lost their jobs or have experienced a decrease in their income. With the housing market in shambles, owners who are offering apartments on rent have increased the price. This increase is because they need to pay down the mortgage, and with low rent, they will end up paying more interest rates. Circling back to the topic of high rent, which low-wage employees can’t afford, and you know why workforce housing is so difficult to find.
2. Lack of Housing Aid
Workforce housing is more difficult to find in some regions than the others. That’s because places with jobs have expensive lands. Factor in the materials and labor, and you have got yourself a standstill situation. In this case, it’s not just about the high rent but low income too.
As a result, real estate investors feel that creating workforce housing might not give them a satisfactory ROI.
3. Static Income
In the past two years, the workforce industries that were hit the hardest include tourism and hospitality. Those who were lucky enough to survive the crisis and stay at their job did not receive any increments or incentives. This led to fixed income, and because of it, employees had a hard time managing their financials.
Real estate investors can boost their economy by investing in workforce housing projects such as those by Maxwell Drever. Yes, this will lead to an increase in population, but this will also bring in companies worldwide and expand and diversify the job market.