One aspect of the housing market we tend to hear little about these days is the idea of the company house, technology including the invention of the car, helped create mobile workforces which started to unravel the role of the company house tied to your employment, but the idea has not vanished.
The idea of company housing has a rich and interesting history and there are some current day examples, that you might find surprising. Locally we’re familiar with the concept of company-towns & housing associated with large mining projects and there are other examples across the globe aligned with coal mining and manufacturing.
Canberra is another example of company-housing, the city developed differently from the other states. For much of its history, Canberra’s housing was government built and provided not as low-cost welfare housing, but as accommodation for public servants, most of whom were relocating from Melbourne, the homes were if you like a kind of carrot.
In the late 1890s when the United Kingdom was a power-house of manufacturing, many self-styled ‘world-leading’ brands like Cadbury and Bata Shoes also developed elaborate employee housing projects.
Working for Bata or Cadbury was not like the conditions offered by other employers, because they didn’t just give you a job; they also leased you houses on their estate alongside every conceivable service, from schools and cinemas to newspapers and tennis courts, all of them run by the company. Even your social life was taken care of: tea dances, sports days and other events were regularly staged by the employer and Cadbury built Bournville.
Life at Bournville Continues Today
Bournville, a model village in Birmingham established by George Cadbury in 1893 for chocolate factory workers, is still thriving and the idea is being repeated in some new locations.
Originally consisting of 300 homes Bournville reflected modern urban community planning with a strong emphasis on open space, decent-sized houses and community cohesion, today Bournville is a sought-after community and has 25,000 residents.
The most immediate question is why has Bournville succeed when other company towns have failed and are there some ideas that could help boost affordability?
The big idea that George Cadbury had when he set up Bournville, was that the town be a mixed community, with people of all kinds of different backgrounds, not just a village for Cadbury employees, and this has proved to be an important distinction. It’s a worthwhile lesson where we see mixed-used developments, with varied demographics, are today a big factor in creating vibrant communities.
The number of Bournville residents who actually work at the Cadbury factory has never risen above 50%. The Bournville Village Trust, which now manages the community has also started to develop Lightmoor, a new development in Telford, Shropshire, which will eventually consist of 800 homes. According to the BVT Lightmoor builds upon all the positive lessons of Bournville.
Other developments taking a lead from the BVT include the Prince of Wales’s Poundbury development in Dorset, while India’s Tata Steel runs a 900-bed hospital and provides its workers with accommodation in Batapur, a town near Lahore, Pakistan.
Today’s Examples Might Surprise
In June, it was reported that Google was spending $US30 million on housing for some of its Silicon Valley employees.
In local headlines that would be familiar to anyone living in Sydney or Melbourne, it was reported that rents in San Francisco and Silicon Valley had reached unprecedented heights. Even those on six-figure incomes, including some Facebook engineers, have reportedly sought help from Mark Zuckerberg to pay their rent, and now some will receive rental subsidies and more.
Google’s parent company, Alphabet, has come up with a helping-hand: by paying around $US30 million to provide temporary, prefab housing for 300 of its local employees.
According to The Wall Street Journal, Alphabet is making a significant investment in modular housing, built to help defray the cost of local housing. San Francisco rents are reported to have jumped by almost 50% since 2010, and house prices have increased 98% since 2009. The idea of providing the prefab homes could help employees save $US700 a month in rent.
Other tech companies are also becoming more active in trying to help solve the housing problems of some of their employees. Facebook Inc. has plans for 1,500 units in Menlo Park, of which 15% will be classified as affordable housing and the company is also considering modular housing to help accelerate local supply and will also invest $US20 million in local employment training: a modern version of altruism familiar to George Cadbury.
While these names and types of industries sit hundreds of years apart: Cadbury & Bata Shoes and today Google & Facebook, still the idea of ‘company-assisted housing’ has survived.
Some blame the success of Silicon Valley for sky-rocketing rents and house prices, and so those brands might feel compelled to be part of the affordability solution.
However, history shows that there were two main motivations for the development of company housing. The first was that some of the jobs, like coal mining were so terrible (Late 18th-Century coal mining) or located in remote areas, circa Australia during the mining boom, the only way to attract workers was also to house them and provide fly-in and fly-out subsidies.
Beyond mining, as manufacturing spread and created demand for highly skilled workers, (or today tech workers) housing was supplied to help secure a skilled-workforce, that style of investment appears to be making a come-back now and involves multi-million-dollar investments.
This is a fascinating history that is evolving today to both retain skills and make housing affordable and we shouldn’t forget that our PM lives in a ‘company-house’ in Canberra and Sydney.