Can your employees afford to live where they work?

By Chris Harrop
October 25, 2017
Body of Knowledge Domain(s):

Many practices routinely offer some degree of relocation assistance to help bring new providers to the community they serve, but cost-of-living concerns for other employees can be an issue for practices in areas with rising housing prices.

The Harvard Joint Center for Housing Studies’ annual State of the Nation Housing Report earlier this year found about 39 million households spend more than 30% of total monthly income on either rent or mortgage costs. Kiplinger’s outlook forecast a 4% housing price increase in 2017, following a 5.8% pace in 2016 that saw “prices out of reach for many first-time buyers, a limited supply of homes for sale and mortgage credit still tight.”

This rise in housing costs may be of concern for practice leaders who need qualified staff living and working in the communities served by their organizations. In its Paycheck to Paycheck 2017 report, the National Housing Conference (NHC) found that of five growing healthcare jobs — home health aide, physical therapy aide, emergency medical technician (EMT), dental assistant and licensed practice nurse (LPN) — “not a single one is guaranteed the ability to afford to rent or purchase a home” in 203 metro areas. That assessment is based on salary averages, median home price data from the National Association of Home Builders Housing Opportunity Index and fair market rents from the U.S. Department of Housing and Urban Development.

NHC cites an average national annual wage for LPNs of $46,000 and that, in high-cost areas on the coasts, rents are unaffordable for LPNs despite income that can range as high as about $57,000 in some cases.

“A shortage of key health workers can make it more difficult to … support the overall health of all individuals,” the report states, noting that only 70 metro areas have housing costs where LPNs can afford to purchase a home.

For positions with lower compensation rates, a housing affordability issue can exacerbate issues with turnover rates that are already traditionally high. A May MGMA Stat poll found that more than 50% of respondents said clinical support staff — including LPNs, medical assistants and registered nurses — have the highest rates of turnover in their practices.

Some larger healthcare organizations institute employer-assisted housing programs to ensure employees have access to affordable housing in the communities they serve. NHC cites the Henry Ford Health System’s Live Midtown program in Detroit that provides loans for homebuyers and rental assistance for the first year of residence, as well as grants for home improvements to those living in the Midtown area, which borders the hospital.

Practice leaders who face housing cost concerns for potential employees also can work to make qualified job candidates aware of federal, state and local housing assistance programs, including the Low-Income Housing Tax Credit (LIHTC) and Federal Housing Administration financing for first-time homebuyers.

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Chris Harrop, senior editorial manager, Publications, MGMA

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