Workforce housing refers to housing that caters to workers such as oilfield workers, nurses, police officers, grocery clerks, and other essential workers. It provides quality, reasonably priced homes for individuals and families who make between 60-120% of the area’s median income. With homeownership becoming increasingly unaffordable for many Americans, workforce housing fills a critical need by enabling communities to house the workers who are vital to their functioning. 

The demand for workforce housing has surged in recent years. By the end of 2018, the number of households that lived in workforce housing units was about 13.5 million, according to CBRE. Strong market fundamentals like low vacancy rates and robust rent growth have caused workforce housing to outperform the overall multifamily rental market over the past four years. This has transformed workforce housing into an attractive and rapidly expanding investment class. 

The benefits of workforce housing are multifaceted, ranging from societal to financial; here are eight of the most common ones. 

Economic Growth

Workforce housing fuels economic growth by providing housing that helps companies attract employees. When essential workers have access to affordable rents near their jobs, it provides a recruiting edge for local employers who can tout the benefit of a short commute. Similarly, in industries like the oil and gas sector, man camp accommodations act as temporary housing solutions, allowing for the influx of the workforce in rural areas, thereby stimulating the local economy. Workers are more likely to consider job opportunities when housing costs are affordable.

In addition, workforce housing keeps income within the local community. When workers can live near their jobs, they spend more money at businesses in the community where they live and work. This boost in local spending spurs economic growth, leading to new business openings and job creation. Thriving workforce housing supports a robust local economy.

Retention of Essential Workers

By creating affordable housing options, workforce housing helps municipalities retain essential workers like firefighters, teachers, and healthcare workers. These professionals provide crucial services but often earn middle-income salaries that make market-rate rents or homeownership unattainable in the communities they serve. Access to safe, quality, affordable workforce housing enables cities and towns to attract and retain these indispensable employees who keep communities safe and functioning.

Without workforce housing, many teachers, nurses, police officers, and other essential personnel cannot afford to live in the communities where they work. This leads to long commutes, difficulty hiring, and high turnover as workers relocate closer to affordable housing. Workforce housing gives essential employees the ability to live near their jobs, providing stability and quality of life. This makes recruitment and retention much easier for local governments and employers.

Improved Quality of Life

Workforce housing improves residents’ quality of life by providing attractive, affordable housing options near major employers. With workforce housing, essential employees can live near their jobs rather than facing long, costly commutes. This allows them to spend more time with family, save money, and reduce stress.

The stability provided by workforce housing gives essential employees peace of mind. They don’t have to worry about rising rents forcing them to uproot their families and move farther away. Kids can stay in the same school district rather than constantly readjusting. With workforce housing, the lives of essential personnel and their families are more settled.

Strong Market Fundamentals

Investing in workforce housing offers strong market fundamentals, including low vacancy rates and robust rent growth. The workforce housing sector has outperformed the overall multifamily rental market in recent years. Demand is high while new construction remains limited, especially for affordable housing. This creates favorable conditions for investors.

Workforce housing provides stable occupancy rates, with demand continuing to outpace supply. Rents also typically rise at or above the rate of inflation each year. Despite economic downturns, workforce housing fundamentals tend to remain strong. With high demand and limited product, workforce housing offers investors reliable occupancy and steady rent increases.

Value-Add Potential

Many workforce housing properties are Class B or C apartment complexes that, while dated, offer substantial value-add potential. Strategic upgrades and renovations to interiors, amenities, and exteriors enable investors to boost rents and create significant equity. Intelligent value-added programs can transform workforce housing into highly attractive, competitive communities.

Even with modest upgrades to finishes, appliances, flooring, countertops, and lighting, the perceived value and rent potential of a property improve. Developing or enhancing amenities can further boost value. Workforce housing offers experienced investors an opportunity to create value and improve local housing stock.

Stable Resident Base

Workforce housing residents often have greater housing tenure than market-rate renters, who are more likely to move for new jobs or homeownership opportunities. The typical workforce housing resident remains in place longer. This leads to stable occupancy and reduced turnover costs for investors.

With rents scaled to be affordable, workforce housing residents stay in place longer, reducing vacancy and turnover costs. They are less likely to leave for homeownership as quickly as higher-income renters. The stable resident base also builds a sense of community identity and pride.

Societal Benefits

Beyond benefiting residents and investors, workforce housing offers societal benefits. It provides safe, affordable, quality housing for teachers, healthcare workers, grocery clerks, and other essential personnel who make communities function. Workforce housing enables a better life for these critical workers.

Workforce housing also reduces traffic congestion and commuting times when located near major employers. This benefits the environment through reduced emissions. Workforce housing makes communities more equitable and inclusive by bridging socioeconomic divides. It brings essential workers and their families into the fabric of community life.


Workforce housing delivers multifaceted benefits ranging from societal to financial. It provides quality rental housing for essential middle-income workers, enabling communities to house personnel who are vital to their functioning. Workforce housing improves the quality of life, spurs economic growth, and offers investors stable occupancy and value-added potential. As homeownership grows increasingly unaffordable, the need for safe, quality, reasonably-priced workforce housing will remain strong for the foreseeable future. The benefits of workforce housing are far-reaching, making it beneficial for residents, communities, and investors alike.

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