Dayna Sarver, Development Specialist
The #1 challenge local employers shared with me before COVID-19 was their ability to attract and retain talent with the skills needed to grow the business. In fact, the private sector is keenly aware of the need for diverse talent. Research has shown that there is a positive correlation between gender/racial diversity and business performance. Companies with high levels of racial diversity had average revenues that were nearly 15.5 times higher than those with low levels of racial diversity. This is because diverse talent provides a broader understanding of customer needs and desires. As a result, innovation increases, the quality of decision making improves, employee satisfaction improves, and the company’s global image improves. (Not to mention that it is the socially responsible thing to do.)
Other challenges employers shared related to talent attraction and retention included access to public transportation and affordable housing. Employers are looking for ways to capture all of the available workforce and housing that supports them. This is not simply an urban or suburban problem. In fact, COVID-19 has created a market disruption that may accelerate growth in more rural areas which will soon need to be addressing these issues as well.
A self-evaluation of how well communities are welcoming the varieties of talent that their businesses are trying to attract would be beneficial. From our perspective, evaluating housing affordability, transportation access, and the presence of a forum for community dialog is the low hanging fruit for a community to put out the welcome mat.
Affordable Housing Definitions & Components
If “the occupant(s) is/are paying no more than thirty percent (30%) of his or her income for gross housing costs, including utilities,” a housing unit is affordable. Overall affordability analyzes the housing stock within a municipality and whether the median household can afford a median‐priced unit.
There are two components to “affordable housing”:
- Subsidized housing is when a government program, such as the housing tax credit program, reduces the rent/price, or owned by a non-profit or government agency. There are typically some restrictions on the eligibility of the tenant.
- “Naturally Occurring Affordable Housing” (NOAH) are older, smaller, or lower quality dwelling units that are affordable without subsidies.
Housing Tax Credit developments must remain affordable for a 30-year period. Additionally, these developments must also meet one of two thresholds:
- At least 20% of all units in a development must be reserved for households at or below 50% of area median income (AMI), OR
- At least 40% of all units must be reserved for households at or below 60% of AMI.
Housing affordability is not only a function of the current housing supply, but also housing demand. Housing demand is a function of income, employment and household growth within a region due to employee commuting patterns. Wisconsin cities and villages with populations of 10,000 or more are required to prepare an annual Housing Affordability Report on the city or village’s implementation of and possible improvements to the housing element in the comprehensive plan. While this report is currently required for communities of a certain size, COVID-19 has created a market disruption that may accelerate growth in more rural areas. It could be valuable for communities of any size to evaluate their current housing stock with forecasted housing demand for all income levels.
Key stakeholders within a region may benefit from having an annual summit to discuss housing topics. Possible discussion topics include: obstacles to developing affordable housing, trends in consumer preferences, range of housing choices, consumer feedback, and the community’s ability to meet this forecasted housing demand.
Missing Middle housing is a range of house-scale buildings with multiple units that fit within the context of the neighborhood, are walkable to/from amenities, and have access to public transportation. Missing middle could be defined as “attached townhouses, duplexes, triplexes or quads, and cottage clusters.”
Here are few ideas to implement missing middle housing:
- Allow for more density in residential subdivisions with smaller lot sizes that still meet the public safety setback requirements.
- Allow “missing middle” housing types in at least one, if not many, residential zoning district as a permitted use by-right.
- Incentivize workforce housing development by providing density bonuses for workforce housing projects.
Housing costs are only one part of the affordable living equation. Households incur varying amounts of transportation costs depending on where they live, work, and play. Location efficient neighborhoods with lower transportation costs tend to be denser, mixed-use neighborhoods with convenient access to jobs, services, transit and amenities. The H+T Index offers an expanded view of affordability. It combines housing and transportation costs. Therefore, the index benchmark of affordability is no more than 45% of household income. The key takeaway is that employment centers and neighborhoods should be developed as location-efficient places.
An evaluation of the location of a potential workforce, their transportation needs, and the hours of operation within industry employment clusters is recommended. It will help facilitate conversations and develop implementation strategies with key stakeholders.
- Analyze the costs and benefits of creating or extending public transportation services.
- Create or contract for a vanpool service. Vanpools are groups of 8 to 15 commuters sharing their ride to work in a passenger van. The van is owned, insured and serviced by a public or private entity. Passengers share operating costs by paying a fare. Alternatively, participation in the program may be incentivized by their employer. The costs of the program may be negotiated between the private and public sector.
A committee with stakeholders from multiple disciplines and representatives of various protected classes would provide a forum for a continual dialog regarding the issues of the day, housing development needs, and any challenges certain communities face. This committee may develop metrics for strategically evaluating progress, provide input for programs and policies to the governing board, and educate constituents about the collective decision-making process. The City of Elk Grove in California and City of Warrensburg, MO are a couple of examples of communities with such committees.
Roles & Goals
Such a committee should have a specific role and set of goals for the community. Example roles and goals a committee could pursue include:
- Educating the public about community initiatives
- Collaborative decision making and/or mediator for community issues that present competing priorities
- Act as an organizing body or collaborator for various efforts throughout the community
- Hold municipality/community accountable to its goals
Collaborating with the school district to communicate actions, measures, and needs within the community is one example of partnering with an outside entity. The school district is an excellent starting point and a good resource in understanding the various values represented by the student body and the perception of the schools in your community are an important factor in attracting talent. Some communities host events celebrating their community’s heritage. Alternatively, other communities invite various ethnic groups to showcase their cultures either all together in a multicultural showcase or as separate events. These types of events provide an opportunity for an open dialog within a community about the culture’s history, influence, and present issues. It facilitates common understanding and builds trust.
Additionally, some communities have opened the conversation by inviting community members to ask the questions they are perhaps afraid to voice, issued public statements of community inclusion and events to promote community healing. One such example, is the City of Sun Prairie, WI.
COVID-19 has created a market disruption. Therefore, should the remote work trend stick, rural communities may see an increased interest of housing developers and consumers looking for less congested, welcoming live-work options. As community economic developers, we believe that all communities would benefit from evaluating their “welcome mat.” This evaluation should include the following:
- Assessing housing affordability for a variety of income levels and consumer preferences
- Transportation access for those units,
- The presence of a forum for community dialog.