Across the country, rising rents are making it tough for many workers to find affordable apartments and homes close to urban centers where many companies -- especially in technology -- increasingly like to be. The phenomenon has prompted some businesses, eager to have a workforce housed nearby, to offer cash incentives and other assistance to help employees find digs closer to the office.
They include Facebook (FB), which offers staff at its Menlo Park, California, headquarters at least $10,000 to move closer to the office. The social-networking giant is among several Silicon Valley firms that offer such assistance for employees as housing in the Bay Area becomes ever more expensive and commuting times climb.
These programs help employers lure talented workers who might other balk at moving to high-rent areas, such as Silicon Valley and New York City. What do the companies get for this largess? Not faced with having to meet train schedules or commuting on crowded freeways, employees who live nearby are more likely to work late and stay with the company longer, managers say.
Addepar, a maker of wealth-management software, offers its employees a $300 a month stipend to live within 1 mile of its Mountain View, California, office or within 15 minutes of the firm's Midtown Manhattan location.
The company's human resources director said the program helps employees better balance the demands of work and family by substantially reducing commuting times, which have risen in recent years in the Bay Area. One result of the area's tech boom has been to put more cars on the road. Commutes that were a one-hour drive three years ago have stretched to 90 minutes or more each way.
In Detroit, it's not a booming economy but a push to revitalize the downtrodden city that has employers offering housing assistance to employees. Companies including Compuware and Quicken Loans have offered forgivable loans, rental assistance and help paying for exterior renovations to employees who live downtown.
Of course, these types of programs aren't exactly new. In the early 1900s, Firestone Tire & Rubber founder Harvey Firestone and Goodyear Tire & Rubber founder Frank Seiberling started programs in Akron, Ohio, to build housing near their respective factories and help workers afford to buy it. The initiatives resulted in the planned communities of Firestone Park and Goodyear Heights, which still exist.
Although housing-assistance programs still often prove popular with today's workers, some companies have found their shelf life can be limited.
From 2012 to 2015, Gusto, a payroll software company, offered employees $750 a month to live within a 10-minute walk of the company's San Francisco office. But the share of employees taking advantage of the benefit dwindled in 2014, as workers began starting families. Gusto ended the benefit last May, and instead instituted maternity and paternity benefits package that it said appeals to a wider group of workers.
Housing incentives can also backfire. While still at its old headquarters in Palo Alto, California, Facebook offered employees a $300 stipend to live close by. But upon learning of the perk, area landlords quickly raised rents.
What's more, unlike health and certain other benefits, the IRS considers housing stipends as taxable income, effectively reducing the amount of the benefit.