The Return of Company Towns
Corporations step in when politicians commit housing malpractice.
If I had to say which was telling the truth about society, a speech by a Minister of Housing or the actual buildings put up in his time, I should believe the buildings.
| Kenneth Clark, Civilisation
The housing crisis in the US has become an enormous challenge, exerting a massive weight on our society unequaled by anything other than the climate catastrophe.
There are many causes, but decades of underbuilding have led to a shortfall of at least five million housing units, spread across cities, suburbs, exurbs, and rural regions. Even though this crisis is well-documented, not much progress is being made.
Consider the recent hiccup in New York governor Kathy Huchul’s plans to jumpstart construction in the greater New York City metropolitan region. Her proposal to the State Legislature has a target of growing 800,000 new and renovated housing units over a ten-year period. This, she admitted from the outset, was only one-tenth of what would be needed. However, the legislators turned the plan down flat, partially because it would cost a great deal, but mostly because it would compel municipalities to grow housing at a mandated rate of 2% - 3% (depending on location) and threatened to overrule local zoning controls in certain circumstances. Her plan for state-wide approval of accessory dwelling units was sidelined for another year, as well.
This despite the fact that more than half of the 3.4 million renters in the state, about 1.7 million, spend more than 30% of their income on rent. And this pattern is reflected nationwide.
Corporations are responding to the housing crisis on their own since in many regions market and political forces seem incapable of getting housing built. Binyamin Appelbaum writes about the trend of corporations building housing for their workers, a move that reminds him of the old company towns of the 1800s:
Company towns in the United States have been around for nearly as long as corporations. From the wooden boardinghouses built for female textile workers in Lowell, Mass., in the 1830s through the development of model factory towns like Pullman, Ill., and Alcoa, Tenn., industrialists provided housing in the hopes of both attracting and controlling employees. It’s harder to defy an employer when leaving a job means leaving your home, too.
That model faded away after World War II as workers sought greater autonomy, corporations discarded a broader sense of obligation and the government assumed responsibility for providing affordable housing.
In Montana, Bozeman Health, a nonprofit health care system perpetually unable to recruit a sufficient number of nurses, is funding the construction of 100 housing units for its employees. The meatpacker JBS is building apartments near some of its Iowa slaughterhouses. Cook Medical, based in Bloomington, Ind., is building 300 single-family homes, which it plans to sell to employees for less than $200,000. Some big employers, including Meta and Disney, are partnering with developers to build affordable housing projects in the communities where they operate.
Appelbaum cites Elon Musk’s announcement about building a utopian city near Tesla’s factories in Bastrop County, Texas:
In September, Bastrop County, Texas, outside Austin, approved the construction of Project Amazing, a subdivision of 110 modest homes on land owned by Mr. Musk that is to be called Snailbrook. Banners hanging from the (solar-powered) street lamps declare, “Welcome / Snailbrook, Texas / Established 2021.” Several of Mr. Musk’s companies, including Tesla, have factories nearby, and he reportedly has been spreading the word that he wants to build a community for his workers.
Still, while Snailbrook doesn’t exist in any legal sense, the idea has progressed beyond mere tweeting. There are already a few houses on the ground and a recreation center. In Texas, as soon as a community has 201 residents, it can petition to incorporate as a town.
Appelbaum is pulled in two directions: he is opposed to company towns, on principle, but he’s aware of the financial housing challenges workers face, and of the double-bind of raising wages in an out-of-sight housing market:
In markets where construction isn’t keeping pace with demand — a category that currently includes much of the United States — giving some workers more money just makes it harder for everyone else to find a place to live. […] Workers don’t just need more money. They also need more housing.
Political leaders in the Austin area, and everywhere else companies are entering the housing business, ought to regard those plans as evidence of municipal malpractice.
Companies shouldn’t need to build worker housing.
Workers shouldn’t have to live in company towns.
But the politicians are not getting the housing crisis under control: it is getting worse. Company housing may be exactly the bridge we need.
In my city — Beacon, New York — the owners of the major supermarket and several other stores have been buying houses and renovating them for their workers. They own five or six and rent them at a below-market rate. Otherwise, their workers couldn’t afford to live in Beacon. It makes good sense and is good for the community.
Elon Musk may be a blowhard, and his dream of living on Mars may be crazy, but building company housing seems pretty down to earth to me.