The Springs Living had already hired chefs from Columbia for its newest community in Bozeman, Montana. But, there was a problem in that they had nowhere to live.
In early 2020, Bozeman was in the midst of an explosion of its already-crowded real estate market, making finding housing hard. That is not to mention the fact that the city is less than a two-hour drive from Yellowstone National Park, making it a popular tourism spot.
Faced with a housing shortage for its new workers, The Springs Living altered some of its existing studio apartments units previously earmarked for independent living, and in the process created workforce housing.
The Springs Living is just one of the few senior living operators exploring setting aside housing for workers as a way to remove barriers that might otherwise hamper recruitment.
“But the math has to work,” according to The Springs Living Founder and CEO Fee Stubblefield.
“It might be a complete loss leader on one side, but if you have a stable workforce and [they’re] not burning out … you might have to use a little new math,” he said.
Workforce housing is not a common benefit offered by senior living operators, but it is a trend that stretches beyond senior living into other industries.
For example, the Wall Street Journal reported that the Walt Disney Company (NYSE:DIS) is seeking to use a portion of a recent 1,300-unit affordable housing development for theme park workers. Medical device manufacturer Cook Group also is building 300 homes in south-central Indiana adjacent to a production facility to house workers. .
Beyond its first foray into workforce housing, The Springs Living is now exploring what it would mean to build workforce housing into a memory care and assisted living expansion of its Whitefish, Montana location.
“Now we’re going to add independent living and workforce housing,” Stubblefield told SHN. “As part of that design process, we’re looking at operations for including a tranche of workforce housing as part of that campus.”
In senior living, The Springs is not alone. Moorings Park this year announced it had entered into a deal that would provide 16 units of housing in a repurposed hotel for its workforce.
Though Moorings Park and The Springs Living are just two operators exploring the concept, their success could provide a blueprint for other senior living operators facing similar problems in the coming years as middle-income housing remains hard to find in some markets.
“We all know that [senior living] has challenges because the type of people we employ in senior living often cannot afford to live in very close proximity to our communities,” Moorings Park CEO Dan Lavender told Senior Housing News.
Resort to workforce housing
As the cost of housing rises in the U.S., some are finding it hard to live near where they work. This trend has hit the senior living industry hard in some markets, particularly those where housing is expensive due to local market forces.
Bozeman is known for its ski and winter resorts, and the city also is home to Montana State University. That has helped make the market one of the fastest-growing in the state — but it also makes long-term, affordable housing harder to find.
The thesis behind building workforce housing is relatively simple: If companies can offer decent housing at a price affordable to their workers, then in theory they can more easily hire them. Other companies, particularly those in the tourism sector, have embraced affordable workforce housing, with at least nine such projects planned, underway or operational in the city.
The senior living industry has been relatively cool on workforce housing in recent years, given its complexities. But then came the Covid-19 pandemic in 2020, which created a work-from-home wave and caused further distress in the local real estate market, according to Stubblefield.
Faced with those pressures, the company decided to think creatively about housing workers. Thus, the idea to house the chefs from Columbia in converted units was born. ,
Stubblefield said the company’s initial attempt at workforce housing is essentially a pilot program.But he mentioned the company is exploring ways to house more of its workers at more of its communities. One concern he has is that workers in some markets must traverse sometimes treacherous, snowy roads to get to and from their place of employment.
“We have care workers that will drive 100 miles to come work with us, and when you realize the risk that they take after their shift driving home — we can’t do that,” Stubblefield said during the event.
The Springs Living is currently adding workforce housing at its community in Whitefish, another Montana ski resort community.
Compared to Bozeman, the local area is more rural and significantly smaller with a population about nine times smaller, so “very few of our care staff actually live in the town of Whitefish … many of them drive hours to get to work,” Stubblefield said.
Other senior living operators in similar areas, such as those with communities in markets near the Rocky Mountains, have similarly needed to find ways to get frontline staff a place to live with enormous disparities in cost of living.
Casey’s Pond, a life plan community in the Christian Living Communities portfolio, is based in Steamboat Springs, Colorado and also participates in a workforce housing program. That housing was developed by K2 Developers, a development firm that specializes in workforce housing developments.
The Springs Living is still hammering out the plan for workforce housing at the Whitefish location, but the goal is to earn planning approval in the coming year and begin construction before the calendar turns to 2024.
‘Differentiate us as an employer’
For Moorings Park in Naples, Florida, a long commute and hot real estate market were the main drivers of the workforce housing project it started working on earlier this year.
“We’ve had half a dozen employees just tap out,” Lavender told SHN. “They would say ‘I love working here, I’d love to stay in Naples, Florida, but I have to go back.’”
Lavender estimates that slightly less than a quarter of its workforce lives more than 25 miles away from any one of the company’s campuses.
“And that is often on highways that could be bottled up, so you’re talking an hour on the way into work and an hour on the way home from work,” said Lavender.
The original plan that Moorings Park had in motion was to lease out a section of a repurposed, 80-unit hotel that was also being developed by K2 Developers. Moorings park under the plan was to lease 16 units, and then sublease those units to its employees.
Moorings Park workers would share the hotel with workers from other industries including a local hospital system, according to Lavender.
Moorings Park planned to do some slight renovations to the rooms. Then Hurricane Ian came and disrupted the time frame of those plans.
“We had 18 of our employees without a house,” Lavender said. “But because we had acquired this hotel, within two days we had 14 of those units housing 11 different families that work here. Some families had children that took more than one room.”
Lavender considers the timing of the acquisition to be lucky and believes that “it’s already demonstrated how volatile the world is and how something like this is going to be able to differentiate us as an employer.”
The company plans to renovate all of the units in its new workforce housing building and equip them with things like kitchens. Despite some units being filled as a result of Hurricane Ian, the company will move forward with renovation plans for its remaining unfilled units in the coming months.
“I want the best talent. I need to compete on pay, health insurance, and retirement. And now, housing and lifestyle are going to be a component of that,” said Lavender.