Undoubtedly, the condition of the U.S. economy has dominated headlines in recent years. In particular, the rising cost of housing has been a sticking point for many employees. While data shows that real wages have risen alongside inflation since 2020, Americans are still wary about their ability to afford a home in today’s real estate market.
According to reports from the U.S. Federal Housing and Finance Agency, housing prices across the country are up 1.8% year over year and 0.8% quarter over quarter.
Though salaries are up, so is the cost of a mortgage. This presents a crippling problem for employees searching for affordable housing amid an increase in return-to-office mandates.
Unfortunately, employees’ most likely solution to this issue could spell trouble for today’s businesses.
With 49% of employees reporting that they are struggling in their personal lives, more than half are actively looking for a new job. Of them, 53% cite pay or benefits as the reason for their dissatisfaction with their current job, and a whopping 69% say that these aspects are driving them to search for something better.
With so many of today’s employees struggling to balance a shaky economy with their pursuit of the American dream, this may be an opportunity for employers to introduce housing perks to their employee benefits package that can bridge the gap and prevent costly turnover.
Still, employers that may be facing their own budget constraints must take the time to decide whether this is the best move.
Here’s what HR pros and business owners need to know about the housing benefit trend, how to determine whether to green-light your own program, and tips for rolling out employer-assisted housing the right way.
What Are Housing Benefits and What Do They Entail?
Housing benefits, commonly referred to as employer-assisted housing (EAH), are benefit programs that are designed to help employees cover the cost of buying a home. Typically, these programs subsidize an employee’s housing costs in some way, such as through stipends or down payment assistance.
In addition to some form of financial assistance, EAH programs may also offer in-depth education and counseling. This benefit is designed to guide employees, especially first-time homebuyers, through the process, helping them structure their finances for a successful purchase.
Common Examples of Effective EAH Benefit Models
If you’re considering adding an EAH program to your list of employee benefits, you may be wondering what that could look like for your business. Some of the most common EAH benefit models include:
- Down Payment Assistance: The employer offers a one-time grant or forgivable loan to help employees afford a down payment or take care of closing costs
- Lender Partnerships: The employer partners with a financial institution to reduce closing costs, offer better interest rates, or customize a lending structure
- Education and Counseling: The employer offers services to help homebuyers through the process, from personal budgets to completing a mortgage application
Before deciding to offer housing benefits, it’s important to thoroughly explore each of these models and think about which fits your budget and aligns with your overall business strategy.
Tips for Integrating EAH Benefits Into Your Existing Program
Consider the following tips to help your team successfully integrate housing benefits in your company:
- Survey your employees to ensure what you’re offering adequately meets their needs so you can be confident they’ll take advantage of the program
- Consider how you will determine employee eligibility for the program, including tenure or income limits
- Select partnerships carefully, thoroughly vetting financial institutions and partnering with those that have experience offering similar programs
Don’t forget to consider how you’ll remain compliant every step of the way, especially when it comes to tax filing, handling sensitive personal information, and avoiding discrimination claims.
Strategic EAH Programs Could Change the Future of Total Rewards
Though housing has long been considered a personal issue, the prospect of high turnover and losing out on great employees could very well push it into the purview of today’s employers.
If you’re considering including housing benefits as part of your talent recruiting and retention strategy, it’s important to do it the right way. This includes considering which model works best for your budget and designing a program that actually meets the unique needs of your workforce.
Whether your team is in the exploration phase or is actively looking to add an EAH program, AssetHR is here to help. Contact us today to learn how our HR consulting services can ensure you build a compliant benefits package that closely aligns with your company’s strategy.