If your employees can't afford to live Spencer-friggin'-Indiana, and your company name isn't "McDonalds", you're just not paying them enough. Now, granted, it's been a couple of decades since I've spent a lot of time in Spencer, but I cannot fathom that in the intervening years that Spencer (nice town as it is) suddenly exploded into a tech hub where no one can afford a house anymore. A quick glance at Zillow says that it is not hard to find what appears to be perfectly livable homes for <$200K. Many are larger, nicer, with a bigger lot than the ~$900K houses around me in Redmond, WA.
So I don't know what's going on in the leading example in TFA. On the one hand, it's not Mountain View, it's as-rural-as-rural-gets-in-Indiana with low CoL. And yet the company says, "we can't find people because they can't afford to live around here". Something just doesn't add up to me.
This is a good point, the motives for first party corporate housing in an inexpensive area without severe supply restrictions are going to be completely different than in an expensive area with those restrictions.
I still think it’s possible for it to be a win-win and solve a collective inaction problem. When a business wants to expand in a rural area, it may create an acute housing shortage which the market would only eventually address, and it requires each individual developer or buyer to go through the process of finding new housing. If the business knows it’s gonna need a 100 new homes they might as well start the process asap, and I don’t mind if they get rewarded for doing so as it incentivizes job creation and housing construction.
In the scenario where it’s not nefarious and just a smart win-win, it reminds me how Japanese rail recoups its costs by purchasing/developing land adjacent to stations. It’s just a smart way of capturing externalities from an economically beneficial endeavor, which reduces costs/increase the incentive for the good thing. I support it
In my opinion, if your employees can't afford to live Spencer-friggin'-Indiana, that's between them and their government. Your employees probably still wouldn't afford to live in Spencer if you didn't hire them. But unaffordable housing suddenly becomes your problem just because you hired someone, which strikes me as backwards. You didn't decide how much housing would cost, and unless you're a monopsony or close to it, you didn't decide what the market prices for their labor are. And in many industries, margins are so tight that it's impossible to stay solvent while paying much above market prices, because your competition certainly won't.
If those "market prices" are not enough to pay for somebody's housing, then they are not truly "market prices". Nobody is going to accept employment at that rate since they can't live off it. So it's not actually the "market price". It only is if there are recent deals made at that price.
It's like saying "well I'm only asking for market prices" when offering somebody to sell some stock to for 100 USD even though they and everybody around them only want to pay 50 USD. That doesn't make 100 USD the "market price". Only if you've seen some recent trades for 100 USD, then it's the "market price".
> If those "market prices" are not enough to pay for somebody's housing, then they are not truly "market prices".
Housing really is the unbalanced part of the equation. Yes, I agree that salaries should increase - a lot. But we can't turn a blind eye that there is a massive civilization-destroying crush of the population by the landed gentry, who demand that just about all surplus production of the continent becomes profit for them. Companies and labourers produce goods and services that benefit all, the rent seekers produce nothing and burdens all.
Those "rent seekers" are the investors that provide you with capital to build something in the first place. They don't produce anything physical directly with their own hands, but if they don't provide the funds, then nobody else would either. The HN crowd of all people should understand this. Your salady doesn't come out of thin air. It comes from somebody believing in that the thing you are hopefully going to produce will hopefully eventually produce a profit that flows back to them. Without this believe, there would not be an investment in the first place and thus no salary for you.
Of course this leads to accumulation of wealth, which can be an issue for society if it goes to far. And I agree that that's happening and that we can't turn a blind eye to it. But the solution here is not to make villains out of investors, but to tax profits. Seems to be hard to get that into peoples heads though, especially in the U.S. where taxes are always viewed as something bad.
> Those "rent seekers" are the investors that provide you with capital to build something in the first place. They don't produce anything physical directly with their own hands, but if they don't provide the funds, then nobody else would either.
Read my comment again, I'm not calling company investors rent-seekers - I'm saying those who live off other's labour through their real estate are rent seekers.
It's pretty funny that 99% of "investors" do not invest a dime in actual companies that produce goods and services. Instead most invest in rental properties to leech of their fellow man or invest in land with the excitement that it will increase in value and that they can price-gouge somebody who might need it for something productive.
When I talk to everyday people, what are their dreams? It's not striking out on a business with their own great idea, it's not even investing in interesting ventures by others. The dream is always the same: Buy some rental property and live care-free on the rent that others pay. It's pathetic.
Part of it is explained as (paraphrasing) "builders won't build low cost homes because the profit isn't there" so all the builders are 20 miles away over in Bloomington Indiana building $500K houses for the same labor and materials cost and making a lot more money.
Yeah, builders won't build "small" homes so they're building "small" 1300-1500 square foot houses and selling them for $200k. I live in a "low" cost of living area in Canada and $200k USD might get you an 800 square foot condo.
Seems inappropriate; McDonalds beats minimum wage and has significant opportunities for career growth that many other "fancier" restaurants don't offer.
So I don't know what's going on in the leading example in TFA. On the one hand, it's not Mountain View, it's as-rural-as-rural-gets-in-Indiana with low CoL. And yet the company says, "we can't find people because they can't afford to live around here". Something just doesn't add up to me.