Between 2011 and 2016, fewer than half of the people hired to work for the city of Little Rock actually lived in the Arkansas capital. This is a reality across the country, especially in places with high costs of living.
Local governments generally want their employees to live within city limits. Some require it. But the ones that don’t -- like Little Rock -- are becoming more proactive to achieve the same goal.
“Instead of making employees live within the city, why don’t we make them want to live within the city?” says Stacey Witherell, Little Rock’s human resources director. “Why don’t we try a carrot rather than a stick approach?”
The carrot in this case is a one-time payment of $5,000 to help municipal workers purchase a home in the city, or $2,500 to help them rent there.
Little Rock isn’t alone.
Cities, counties and school districts are starting to offer housing incentives to attract -- rather than force -- their employees to live where they work. These new benefits are particularly prevalent in expensive areas where lower- and middle-income employees are being priced out of the housing market.
There are multiple reasons for a government to want employees to live within its borders: improved employee engagement, better community relations, lower transportation costs, retention. According to a 2017 study by consulting firm Robert Half, nearly a quarter of the workers it surveyed across 28 large U.S. cities had quit a job because of a difficult commute.
Commuting isn’t a problem anymore for some municipal employees in Virginia’s Fairfax County. The Washington, D.C., suburb opened a 270-unit apartment building in 2016 next to offices that house the county’s major departments.
The Residences at Government Center, as it's called, was built on previously vacant county-owned land and is open to low- to moderate-income county and private-sector employees. The new residence, which was developed through a public-private partnership, supplements existing county housing for teachers, police and public health employees.
Wyoming’s Teton County is taking a similar approach.
The area has struggled to hire both homegrown and outside employees because the cost of living is 159 percent higher than the state’s average. Exacerbating that problem is the rugged terrain and difficult winters that can make it impossible for employees to get to work when winter storms, avalanches and mudslides hit.
Currently about 45 percent of Teton County employees live outside the county lines. Teton hopes to raise that number by buying cottages and condos to offer to employees at affordable prices.
These cabins are reserved for county employees. (Teton County)
San Antonio, meanwhile, is using these incentives “as a way of coupling our recruitment and retention benefit with our redevelopment strategy,” says Lori Houston, the Texas city's assistant manager.
Since 2012, the city has offered $10,000 zero-interest loans to full-time employees who are first-time homebuyers and want to live in the downtown area, and $5,000 for homes purchased in other inner-city locations. A similar program for first responders was started in 2017. The loans are forgiven after five years of city employment.
The incentive serves a triple purpose. It makes city jobs more attractive, encourages more employees to live in the city and helps revitalize the downtown area.
Although these housing incentives draw more public employees to live where they work, the gains are limited by what the municipalities can afford.
In Fairfax County, the Residences has a more than 200-person waiting list.
Teton County budgeted $1.3 million last year to buy two additional units for directors and for transitional housing for interim employees. That brought the total number of units to just 18. This year, $1 million more was budgeted for two more condos.
Still, “there are definitely more employees who are interested in county-provided housing than there is county-provided housing available,” says Alyssa Watkins, administrator for the Board of County Commissioners.
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