Affordable and Attainable Housing for Healthcare Workers - White Paper #1

As part of the monthly Riverstone Platform Partners new white paper series, we will be exploring issues impacting specific sectors of the affordable, attainable and workforce housing market. Our inaugural white paper is on the importance of providing housing for healthcare workers, especially front line, essential and support staff that keep our medical centers running.

Why provide housing for healthcare workers?

Providing affordable housing for healthcare workers is crucial for multiple reasons, benefiting not only the workers themselves but also the healthcare system and the community as a whole:

·         Increased Employee Satisfaction and Retention: When healthcare workers have access to affordable housing options, they experience less financial stress and can focus more on their work, leading to higher job satisfaction and reduced turnover rates. Organizations save on recruitment and training costs associated with hiring new employees. Baptist Health South Florida found that the cost of living has caused some current employees to seek living and employment elsewhere and has seen applicants rescind job offer acceptances once they have researched the local housing market.

 ·         Improved Work-Life Balance and Productivity: Affordable housing near workplaces reduces commute times, allowing healthcare workers to spend more time with families or engaging in activities they enjoy. This improved work-life balance contributes to overall job satisfaction and well-being, leading to increased productivity.

 ·         Enhanced Quality of Patient Care: Well-rested and less stressed healthcare professionals are more likely to perform at their best, leading to higher quality patient care. Additionally, workforce housing can help attract and retain healthcare workers in urban and underserved areas, improving access to healthcare services for these communities.

 ·         Support for Healthcare System Efficiency and Responsiveness: When healthcare workers live closer to their jobs, it’s easier for them to respond to emergencies or unexpected shifts, further supporting the healthcare system’s efficiency and responsiveness.

 ·         Attracting Top Talent and Building a Stable Workforce: Health systems are finding it difficult to recruit and retain talent, and in many places, high housing costs contribute to the problem. Healthcare systems are building their own living complexes to mitigate the costs of relocation and help employees crack the tough housing market. By providing affordable housing options, healthcare facilities can attract top candidates, particularly in competitive markets. Without the ability to secure a stable, affordable home or eventually purchase a home, healthcare workers will struggle to build wealth, and their employers will struggle to maintain a stable workforce.

 ·         Strengthened Community Ties: Providing affordable housing options near healthcare facilities can foster stronger ties between healthcare workers and the communities they serve. This integration can lead to a greater understanding of community needs and improved healthcare delivery.

By addressing the housing needs of healthcare workers, we not only recognize their invaluable contributions to society but also invest in a healthier and more resilient community.

Trends in Housing Development for Healthcare Workers

One growing trend to help healthcare workers find affordable housing is for healthcare facilities to create their own workforce housing. Health systems nationwide are building their own living complexes to mitigate the cost of relocation and help employees navigate the difficult housing market. For example, Moab Regional Hospital in Utah is buying land to build staff housing because of housing shortages in the area. The hospital hopes that this project will entice possible recruits to come to the area. The University of Vermont Health System has put $6 million toward a 120-apartment complex for employees and clinicians, which also has a childcare center. This is their second project, as a 61-unit complex is scheduled to open in April.

Another trend is the growth of partnerships to address the need for affordable housing for healthcare workers. These partnerships are seen to slowly stir growth in communities. Some hospitals and healthcare providers are partnering with affordable housing developers to connect housing to health services and to create more affordable housing for their workers. For example, Kaiser Permanente is investing $400 million in Oakland, California to support the construction and preservation of 30,000 housing units by 2030. This type of long-term, low-cost loan has become even more valuable with rising interest rates and building costs.

Hospitals are also partnering with local governments and non-profits. For example, in San Francisco, a large hospital system partnered with the city government to develop a housing complex for healthcare workers. The hospital worked with the city to find and develop underused land, and the city provided tax incentives and expedited planning processes. The result was hundreds of affordable housing units for hospital staff, reducing commute times and improving quality of life. In the Midwest, a non-profit specializing in affordable housing worked with a regional healthcare system to renovate existing buildings near the healthcare facilities. The healthcare system gave financial support and guaranteed rental payments for its employees, while the non-profit ensured the housing was affordable.

Engagement with Private Developers: Partnerships with private real estate developers can lead to mixed-use developments that include affordable housing units specifically for healthcare workers.

Hospitals are also investing in affordable housing and looking at innovative approaches to providing housing. Some hospitals are financing the acquisition, construction, and/or rehabilitation of affordable, mixed-income housing developments in their service areas, targeting both customers and employees. For example, the Bon Secours Health System owns multiple apartment buildings in Baltimore. Others, like Montefiore Health System, have created community development corporations to renovate and stabilize apartment buildings. Some healthcare systems are providing loans to cover affordable housing development costs. For example, Dignity Health, through its Community Investment Program, has invested more than $100 million in affordable housing development, with over $70 million of that in the form of loans. Some are exploring the integration of on-site housing units within healthcare facilities, while others are considering repurposing existing facilities or using modular housing solutions.

There are several factors motivating hospitals to invest in affordable housing. Hospitals and health systems want to advance their mission of improving health in their communities. They also want to strengthen public-sector relationships and enhance relationships with residents. They also are looking to enhance their reputations and competitiveness. These investments often generate small financial returns for the hospital, directly through interest on loans or indirectly through savings and avoided costs. A new Medicare pilot program may also encourage the growth of partnerships between affordable housing developers and healthcare organizations. The program allows some healthcare providers to use Medicaid funds for housing.

In addition to building, financing, or rehabilitating affordable housing, hospitals are engaging in other housing related activities. Hospitals are:

·         Providing medical care to those in need of stable housing

·         Offering health clinics at affordable housing sites

·         Sharing data with housing partners

·         Creating medical respite programs

·         Educating their employees about homeownership programs

·         Offering employees financial assistance to help with down payments or closing costs

However, hospitals face several challenges in engaging with affordable housing efforts. They cite several concerns including:

·         The time commitment required to address housing needs

·         The large number of households that struggle to afford housing

·         The perception that housing-related projects are risky

·         The lack of resources to serve a larger population

·         The need for more evidence that housing initiatives improve health and reduce costs

Overall, the increasing involvement of healthcare facilities in providing affordable housing for their workers is a positive trend. These efforts not only support the well-being of healthcare workers but also contribute to stronger communities and improved healthcare delivery. Partnering with experienced housing developers can help healthcare providers mitigate challenges and achieve the goal of providing attainable and affordable housing for their workforce.

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