Why Employers Must Treat Workforce Housing Like Roads, Water and Power
By Kevin Davis, Chief Commercial Officer, Centinel Public Partnerships
Imagine a hospital without enough nurses for its emergency department. A school district and university losing teachers and professors who can’t afford to live near campus. A municipal government that posts the same civil engineer position for the third year in a row.
It isn’t hard to picture. Scenarios like these are happening in communities across the country. The common thread that runs through all of them? No affordable workforce housing.
For too long, institutional employers like governments, universities, school districts, health systems and large anchor employers have treated housing as someone else’s problem. A market failure for developers to solve, a policy issue for housing authorities or a zoning question for the planning boards. But this abdication of responsibility isn’t tenable anymore. The workforce housing shortage is a direct operational and competitive threat. Institutions must recognize housing for what it truly is: mission-critical infrastructure.
When we call something infrastructure, we mean it’s foundational for economic and civic life—something so essential that its absence makes everything else impossible. Roads, water, power and broadband aren’t amenities; they are prerequisites.
We must start thinking of housing in the same way. Without adequate housing, workers can’t live near their jobs. Without workers, institutions can’t deliver services. And without services, communities can’t function. No hospital would accept unreliable electricity, and no university would locate somewhere without functional roads to access campus. But these same institutions routinely face a situation in which their workforce can’t afford to live within a reasonable commute of their workplace.
The data paints a stark picture of the consequences. In high-cost metros, median rents for a two-bedroom apartment eat more than 40% of the take-home pay of teachers, firefighters and nurses. Even in mid-sized cities that were once considered affordable, rents are rising faster than wages and pricing people out. Nurses, teachers, first responders, skilled tradespeople and administrative staff are the people who hold our communities together; institutions can’t function without them. But they’re precisely the people we leave stuck between a rock and a hard place: They technically earn too much to be eligible for subsidized housing but not enough to afford market-rate rents in the communities where they work.
The consequences only compound over time. Long commutes lead to burnout and absenteeism. Housing-cost stress affects retention. Chronic vacancies in critical roles drive up overtime costs and strain the remaining staff. Even if institutions respond by increasing wages, they find themselves chasing rents in an upward cycle, since the root cause—absence of adequate housing supply—remains unaddressed.
The American Hospital Association estimated that hospitals and health systems spent over $26 billion on contract labor in a single year to make up for their inability to recruit and retain permanent staff. School districts in high-cost markets routinely report classroom teacher vacancies of 10% to 20%.
These aren’t run-of-the-mill inefficiencies. This is a system-threatening failure. The good news is that, once we accept the root cause, we can address it.
Treating workforce housing as infrastructure doesn’t require institutions to become developers or landlords. Instead, it requires fundamental reorientation. Housing outcomes for the workforce must become defined institutional priorities and be resourced and managed accordingly. What does that look like in practice?
- Land and capital development. Universities and healthcare systems often have substantial and underutilized land holdings. By ground-leasing land to qualified workforce housing developers at no or below-market rate cost, they enable economic freedom that would otherwise be impossible without subsidies.
- Master lease programs. Institutions can enter master lease arrangements, taking on market-rate units and subleasing to employees at reduced rent. The spread becomes a benefit cost rather than manifesting as recruitment or retention loss.
- Zoning reform. When anchor employers like major hospital systems or flagship universities publicly champion increased housing density in surrounding neighborhoods, it makes a political difference and serves as a form of infrastructure investment.
- Housing allowances and homeownership assistance. Down payment assistance programs, employer-sponsored forgivable loans and location-based housing stipends are proven tools for anchoring and retaining workers in high-cost communities.
- Public-private partnership leadership. Local governments can convene developers, lenders, nonprofits and anchor institutions around shared workforce housing strategies. State governments can establish revolving loan funds, tax credit programs and regulatory frameworks that make it easier to build at the income levels where the housing shortage is most acute.
Treating housing as infrastructure isn’t a new idea. Some major tech firms and finance companies in the private sector offer housing benefits. The U.S. military has long understood that housing is critical to military readiness, too. Service members distracted by housing insecurity are less effective, so the Department of Defense implemented its Military Housing Privatization Initiative (MHPI) to ensure every service person has access to affordable, adequate housing. By allowing the DOD to partner with private-sector development companies like Centinel Public Partnerships, the MHPI has delivered over 75,000 new homes and 50,000 major renovations since 1996, contributing directly to service members’ ability to safely and soundly perform their jobs.
Governments, universities, hospital systems and major employers anchor our communities. More than just large employers and large landowners, they are influential voices in local policy—giving them the responsibility and the capacity to act. Right now, many of them are reactive, absorbing the costs of chronic workforce shortages while waiting for a market correction that may never arrive.
But what would our communities look like if these institutions were proactive—shaping solutions, deploying capital, leveraging land and championing local policy changes? We build roads because we know mobility is essential to economic life. We invest in water systems and power lines because public health and modern life depend on them.
It’s time to extend that same logic—and the same institutional commitment—to workforce housing. Not because it’s easy, but because it is necessary.