: School districts and hospitals are wading into the housing business and even becoming landlords to attract workers

“I never thought I’d be doing this,” said Randi Lowe as she reviewed a spreadsheet of southern Vermont homes available for rent or sale. Lowe isn’t in the real estate business–she’s the superintendent of a Vermont public school system. But for the past few months, she and her staff at the Bennington-Rutland Supervisory Union have been compiling a list of properties in the hope it will help recruit and retain workers amid an acute shortage of both housing and labor. 

The educators’ adventures in real estate matchmaking started in March, Lowe said, after a topnotch applicant from the midwest turned down the school district’s job offer because she couldn’t find a place to live. In Bennington County, the primary area covered by the school district, the number of homes listed for sale dropped 82% in the five years ending in April, according to a new MarketWatch analysis of data–one of the steepest inventory declines of any county nationwide. At the same time, Lowe said, the school district was wrestling with high staff turnover and struggling to fill positions. 

“I was deeply troubled” when the applicant backed away from the job offer, Lowe said. “I said, ‘let’s do something we’ve never done before.’” A few days later, the school district made a public appeal for leads on homes for new hires, saying in a Facebook post that no matter how enthusiastic high-caliber applicants might be about teaching in the district, “these candidates simply cannot find a place to live.” The district started getting calls from landlords, Lowe said, and is now sharing listings with potential hires from outside the area–including the midwest applicant, who ultimately found a home and will start work with the district later this summer. 

“I don’t want to be doing this,” Lowe said. “This step was taken out of desperation. But it has worked very well.” 

Plagued by the pandemic, a housing shortage, rising rents, and a labor shortage, some employers most in need of essential workers–including school districts and health systems–are wading reluctantly into the real estate sector with the aim of easing their staffing problems. Some, like the Vermont school district, are helping new hires find housing, while others are going further, buying or building housing for workers.  

Many employers said such steps are unprecedented within their organizations, yet these workforce housing experiments may be the only way to avoid cutting back essential services. For patients relying on rural health providers, for example, lack of housing for clinic staff has become “yet another barrier to access to health care,” said Alan Morgan, CEO of the National Rural Health Association.  

While housing shortages have hampered the recruitment efforts of employers in many sectors, they’re a particular concern for many school systems and health providers whose workers have already been pushed to the breaking point by pandemic pressures. Among public schools looking to fill jobs as of January, 61% said the pandemic had increased teaching and non-teaching staff vacancies, according to the National Center for Education Statistics. And in a recent survey of rural hospitals by the Chartis Group, a consulting firm, 96% said they were having trouble filling nursing jobs, and more than one-third said that a lack of nurse staffing had prevented their facilities from admitting patients in the past 60 days. 

Entry-level salaries for teachers or nursing assistants don’t go far in housing markets where scant inventory has sent prices skyward. In Lowe’s Vermont school district, for example, teacher salaries start at roughly $42,000, whereas the median Bennington County home’s listing price was $450,000 in April, according to data, up more than 40% from five years earlier.  

‘We had applicants accepting positions and then turning them down because they couldn’t find housing’

The housing arrangements raise some thorny questions, employers and industry groups said. What if sharp reversals in the housing and labor markets make workforce housing seem like a useless appendage? What happens if workers move into the employer’s apartment building and promptly quit their jobs? The idea of housing employees “starts blurring lines that feel very uncomfortable to me,” said Reba Rice, CEO of NorthLakes Community Clinic, which operates 13 health clinics in northern Wisconsin and is considering buying residential real estate where it can house workers. On the other hand, if the housing can help workers move to and remain in the clinics’ communities, she said, “it’s probably worth it.” 

If a health system builds housing, will the workers come? The University of Vermont Health Network is betting on it. The health system, which has six hospitals in Vermont and New York, has teamed up with a developer to build apartments for its permanent employees. Construction is underway on the 61-unit building in South Burlington, in Vermont’s Chittenden County, where housing inventory has dropped about 79% over the past five years, according to the MarketWatch analysis. 

“We had applicants accepting positions and then turning them down because they couldn’t find housing,” said Al Gobeille, the health system’s chief operating officer. The health network, which has about 15,500 full-time positions, currently has about 2,000 jobs open, Gobeille said–a number that has nearly doubled since last summer. Some of the network’s smaller hospitals have had to limit admissions due to staffing shortages, and the network has had to hire travel nurses to fill in gaps, which “are so expensive that it’s actually really harming us financially,” Gobeille said. 

A rendering of the South Burlington, Vermont apartment building that will house University of Vermont Health Network employees.

Snyder Braverman

Hayward Area Memorial Hospital, a small critical-access hospital in northern Wisconsin’s Sawyer County, has started housing some emergency-room physicians and other employees in a hospital-owned property that was previously intended to be temporary lodging for medical students, said Luke Beirl, the hospital’s CEO. Sawyer County’s housing inventory has dropped 87% over the past five years, according to the MarketWatch analysis–the biggest decline of any U.S. county over that period. The Hayward hospital, one of the county’s largest employers, has about 45 jobs open, or 10% of its total headcount–and many of those are in direct patient care, particularly nursing, Beirl said. 

Even surgeons and other highly paid health care professionals are struggling amid the housing shortage, hospital executives say. “I’ve got people making five to 10 times the median income in the area who can’t afford a place to live,” Beirl said. One physician who moved to the area is living in a year-long Airbnb rental, he said. 

NorthLakes Community Clinic, which serves Sawyer County and other parts of northern Wisconsin, has 40 jobs open, up from about 10 two years ago, said Rice, the CEO. The clinic is trying to expand its services, but when job applicants look at the area’s home listings, it scares them off, she said. Over the past year, the clinic has started thinking about buying a property that could serve as temporary month-to-month rental housing for workers, she said. 

In some areas that have long wrestled with a shortage of affordable homes, the workforce housing issue has taken on fresh urgency. The California School Boards Association in February released research that it commissioned several years ago, examining the potential to develop school-employee housing on land owned by school districts in the state. Several such developments have already been built in California, according to the report, and nearly 50 additional school districts are pursuing this type of project. 

“We’re advocating for every school district to take a look and see if it makes sense for them,” said Troy Flint, the school board association’s chief information officer. “We’re seeing tremendous interest,” he said, as the teacher shortage has been exacerbated by the pandemic and school districts that previously viewed workforce housing as too far removed from their core mission “are now realizing how it can support their overall goals for students.” 

Katie Marriner contributed to this article.

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