Amid an escalating housing affordability crisis, nearly half of employers are stepping up to offer financial assistance for employee housing.
Forty-seven percent of employers are considering or already providing rent assistance to their employees, according to a survey by JW Surety Bonds, signaling a shift in the landscape of employment benefits.
The survey, encompassing anonymous feedback from 710 employees and 310 employers, sheds light on the burgeoning trend of employer-based housing benefits as a strategic response to the mounting pressures of the housing market.
With more than one-quarter of employees willing to switch jobs for housing perks and a portion favoring the benefits over traditional salary increases, the initiative could be the catalyst for a larger change in priorities in the modern workplace.
The move, although still in its infancy with a relatively small sample size, points toward a transformative approach in addressing the need for affordable living spaces, especially in sectors hardest hit by the housing crunch.
Affordability Crisis
The current landscape of housing affordability in the U.S. presents a grim picture for many Americans, a situation exacerbated by economic upheaval following the COVID-19 pandemic, according to Redfin. Median asking rents rose 1.1 percent to $1,964 in January, the largest year-over-year increase since March of last year, with areas of the Northeast seeing higher rents at $2,427 a month while the West contends with rents that average $2,358.
A report issued by the Joint Center for Housing Studies of Harvard University last month found that in 2022, an unprecedented 50 percent of U.S. renters spent 30 percent or more of their income on rent and utilities. Worse still, nearly half of that group are severely cost-burdened, dedicating more than 50 percent of their income to housing costs.
That financial strain is reflected in the rising homelessness rate, which reached record highs nationally in 2022.
Buyers, too, are feeling the pinch.
According to a BankRate survey issued Monday, the high cost of living coupled with stagnant incomes has made home ownership an elusive dream for more than half of aspiring homeowners. Specifically, 51 percent of potential buyers cite living costs as too prohibitive for saving toward a down payment, while 54 percent feel their earnings have not kept pace with escalating home prices.
Employer-led Housing and Rental Assistance
The increasing pressure of the housing affordability crisis is pushing employers to adopt innovative solutions to support their workforce, according to the JW Surety Bond survey.
One in four employers are considering offering housing benefits to their employees this year, with 47 percent of employers indicating a willingness to assist with rent, and 11 percent with purchasing a home. On average, employers anticipate providing $6,201 in housing assistance per employee.
"The trends identified in our study suggest a growing interest in employer-based housing benefits among employees," Ricardo Rodriguez, part of the creative team for JW Surety Bonds, shared with Newsweek via email. "These statistics provide insight into the shifting priorities and preferences of today's workforce regarding compensation packages."
The trend is not uniform across all sectors, however. Industries such as marketing, finance and information technology show a higher propensity toward offering the benefits, with 53 percent, 41 percent and 31 percent of employers, respectively, considering the initiatives. Small to medium-sized companies, in particular, are more inclined to adopt the approach compared to their larger counterparts, JW Surety Bonds found.
Who Wants It?
On the employee side, more than one-quarter are open to switching jobs for access to employer-sponsored housing benefits, indicating the appeal of such benefits over traditional compensation like pay raises. The desire extends to sacrificing paid time off (PTO), with 43 percent of employees willing to forego it for housing support.
The interest in housing benefits varies across industries, with the food and hospitality sector showing the highest demand. Sixty-one percent of workers in the industry would consider changing jobs or careers for housing benefits, JW Surety Bonds found, with health care workers and remote employees also expressing a considerable interest.
The shift toward employer-supported housing benefits marks a potential turning point in employee compensation, the survey found, where beyond addressing immediate financial needs, companies are acknowledging the role of housing stability in fostering a loyal and productive workforce.
Employers considering providing rental or housing benefits to employees, Newsweek wants to hear from you. Share your experiences with us at personalfinance@newsweek.com.
Employees interested in down-payment or rental assistance instead of a raise, your stories matter to Newsweek. Contact us at personalfinance@newsweek.com to share your perspective.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aj Fabino is a Newsweek reporter based in Chicago. His focus is reporting on Economy & Finance. Aj joined Newsweek ... Read more
