An age-old marketing tactic of offering rent discounts to employees of certain companies could be boosted into corporate-subsidized housing in a concept that is gaining political traction among Buckhead leaders. But such “preferred employer programs” may shut other people out of the housing market and were banned in Seattle as discriminatory.
The idea of super-sized preferred employer programs was raised last year in a housing affordability study commissioned by the Buckhead Community Improvement District and the nonprofit Livable Buckhead. The study looked at the affordability crunch and ways to preserve middle-income housing closer to Buckhead’s employment centers to cut down on commuter traffic. As the first concrete step from that study’s recommendations, Livable Buckhead now seeks to study preferred employer programs and is awaiting word on a grant to conduct it.
“We haven’t even started the conversations yet,” said Denise Starling, executive director of Livable Buckhead. It remains to be seen whether the concept is viable, she said. But the gist at this point is anything from a company covering an employee’s security deposit to the “employer actually buying housing units and having them available to employees,” she said.
Some local apartment complexes offer one-time discounts as preferred employer programs. One is Icon Buckhead, a luxury skyscraper that opened on Peachtree Road in October with rents for a studio unit starting at $1,764. Icon offers a one-time $500 rent discount to employees of several companies, mostly massive corporations and nonprofits like Coca-Cola, Salesforce, Delta Air Lines, Emory Healthcare and the law firm Morris, Manning & Martin. However, it also applies to apparently anyone working at the local Atlanta Tech Village and Tower Place complexes.
Karen Houghton, a vice president at Atlanta Tech Village, said her organization was happy to partner with Icon Buckhead on the program. “It’s within walking distance to the Village and with a lot of young entrepreneurs who work long hours, saving money and time on your commute leaves more time to work on your business,” she said.
Jennifer Spara of The Related Group, which operates Icon Buckhead, said about 10% to 15% of the tenants work at the program’s preferred employers. She said she has worked at other complexes that offered ongoing rent breaks of 5%.
Starling said such existing programs are “more of a marketing tool” and “not full-fledged, employer-assisted housing” of the sort Livable Buckhead has in mind. But her discussion of the programs at public forums in recent months has garnered significant support.
“I think we’re going to have to do something like that,” said District 8 City Councilmember J.P. Matzigkeit, noting that Buckhead’s housing costs make it hard for employees to stay.
The Buckhead Council of Neighborhoods is on board as well. “That has to be figured out economically and appropriately, but we think it makes a whole lot of sense,” BCN chair Mary Norwood said the employer-subsidized housing idea at a Feb. 13 Buckhead Business Association meeting.
District 3 City Councilmember Antonio Brown has a different term for preferred employer programs. It’s “discriminating,” he said. Brown was the sponsor of recent council legislation that bars landlords from discriminating on the basis of tenants’ income, including the use of federally subsidizing housing vouchers. “I didn’t know that was happening,” he said of preferred employer programs, adding that if landlords present them as an affordable housing solution, they may be “operating as if they’re trying to fix the problem when they are the problem.”
The Seattle ban
That was the take of the Seattle City Council when preferred employer programs became controversial there in 2015. According to media reports, the city’s Office for Civil Rights began investigating rent discounts and move-in incentives reserved for well-paid employees of such mega-corporations as Microsoft and Amazon, which are among the causes of rapid gentrification there. The question was whether preferred employer programs are discriminatory under fair housing laws.
Landlords said no, because employer status is not a protected class of people. But housing rights activists said yes, in what is called “disparate impact,” meaning an apparently neutral policy that has discriminatory side effects.
“Data has shown workforce gaps exist in the tech sector, for example, based on gender and race, which negatively impact groups who are currently underrepresented in the tech workforce,” says a Seattle city webpage about preferred employer programs. “Given Seattle’s high rents and increasing unaffordability, incentives and opportunities for certain groups over others may perpetuate existing racial, gender and other social inequities.”
In 2016, the Seattle City Council banned the programs. The city website said the Office for Civil Rights reviews them on a case-by-case basis.
“Tenants benefiting from preferred employer rental discounts aren’t the tenants that need assistance in the affordability crisis Seattle faces,” Councilmember Lisa Herbold, who sponsored the ordinance, said in a written statement at the time. “It’s the renters who are on Social Security or who receive child support assistance that need a helping hand, and that’s who this law was intended to aid.”
For what Livable Buckhead has in mind, “I wouldn’t call it discriminatory,” said Starling, likening it to MARTA pass subsidies from employers. But she added, “That’s a tough question. It’s a good question. It’s something we need to consider as we craft this strategy.”
It remains to be seen how landlords and employers will respond to Livable Buckhead’s ideas. Spara said her company would be glad to review proposals, and responded positively to the idea of employer subsidies to let people live closer to work. “I think it’s an awesome and helpful solution to traffic problems,” she said.
On the other hand, the Atlanta Apartment Association, an industry group, says preferred employer programs are already waning naturally.
“Preferred employer discount programs are fairly common, and have been traditionally used to assist larger employers whose offices are in close proximity to available housing,” said association spokesperson Kelly Cole. “Programs vary as to what’s provided. With the rapid rise of digital marketing, and specific preferences of today’s prospective residents, preferred employer programs are on the decline, as a small discount based on their employer being ‘preferred’ is viewed by most employees as not all that important in their apartment search.”
Starling said there are questions on the tenant side as well. “We may find people don’t want their employer involved in their housing,” she said.
She said Livable Buckhead hopes learn in the next 60 days whether it has secured grant funding for the study to answer such questions.