Tennessee Ernie Ford sang it best with his hit “16 Tons.” Where he warbles the line “I sold my soul to the company store.

Well, Disney and Universal aren’t planning old coal-mining company stores … yet … but they are getting into the housing market.

Orlando, Florida, is on the front line of an industry trend as major employers like Universal and Disney look to close the area’s workforce housing gap.

For visitors, Universal Studios Florida offers a chance to visit a fantastical land full of wizards, Minions and various characters from NBC Universal’s many film and television properties. But for the roughly 28,000 men and women who work at the 840-acre theme park and resort complex in Orlando, the troubles of the real world — like the rising cost of housing — are not far away.

Central Florida has seen some of the nation’s fastest pandemic-era rent increases, thanks to a confluence of job growth, migration and housing underproduction that has put a strain on residents. The average tenant in the region saw their monthly rent jump by $600 between early 2020 and early 2023. According to the National Low Income Housing Coalition, the Orlando-Kissimmee-Sanford metro area has one of the worst affordable housing shortages in the US, with only 15 available units for every 100 extremely low-income renter households.

The dire need for workforce housing is behind the entertainment conglomerate’s latest project in Central Florida: a 1,000-unit mixed-use development, set to open in 2026, that promises to give tenants who work in the service industry a short commute to the constellation of tourist attractions and hotels nearby. To launch the project, Universal donated 20 acres of land adjacent to the Orange County convention center. Called Catchlight Crossings and built in partnership with local developer Wendover Housing Partners, the project broke ground in November.

Universal’s nearby rival is also wading into affordable housing. In 2022, Walt Disney Co. announced plans to donate 80 acres for a proposed 1,450-unit affordable development a few miles to the southwest. Also set to open in 2026, the project would be built near Flamingo Crossings Village, a campus for participants in Disney’s college internship program that also leases units to some Disney World cast members. (Oh great, brainwashing by woke Disney types).

As housing costs in Central Florida have soared, the theme park giants have faced criticism for underpaying workers. In June, Universal raised its minimum wage by $2 to $17 an hour, while Disney, which employs 82,00 people in Florida, agreed to bump its starting hourly rate to $18 in 2024. Still, both lag behind the $18.85 that the Massachusetts Institute of Technology’s Living Wage Calculator estimates would be needed to support an adult with no children in Orange County.

Even smaller theme parks in more affordable areas have become homebuilders in an effort to ease the housing crunch. In May, Indiana’s Holiday World opened a $7 million development called Compass Commons, which is meant to provide seasonal housing for up to 136 employees. It will replace a proposed theme park attraction that was set to open last summer.

Such partnerships between entertainment industry employers, developers and local government represent the latest spin on a solution for the ongoing scarcity of apartments for lower-income households. Catchlight Crossings is part of Universal’s Housing to Tomorrow initiative, which was inspired by the Orange County mayor’s Housing for All Task Force. The company represents almost 10% of the tax base of Orange County, which includes Orlando.

“What could we do that would be more than just the typical corporate response?” said John Sprouls, executive vice president and chief administrative officer at Universal Parks and Resorts. “If you’re going to provide affordable housing, providing affordable housing where the jobs are sure makes a lot of sense.”

The Truly Missing Middle

Workforce housing is a much-needed housing type without a precise definition. Unlike affordable housing, which must meet stringent rental rates matched to specific income levels to qualify for government support and subsidies — typically 40% of units need to be priced to support those households who make 60% of the area median income — workforce housing stands as more of a catch-all term. Some define it as housing that serves those making between 80% and 120% of median area income. Often, the term is used to invoke housing for teachers, first responders and other public servants who have been increasingly priced out of expensive metros.

Over the last decade, and through the recent pandemic-era surge in apartment construction, developers have largely ignored the lower end of the market, focusing instead on Class A apartments. Beginning in 2013, half or more of units delivered each year were considered high-end or luxury, according to statistics from the National Multifamily Housing Council. Only since the middle of 2022 has that shifted towards Class B, or more affordable units.

Seeking lower production costs and rents, a handful of big developers have created new sub-brands of apartments designed to appeal to less-monied tenants. Grubb Properties launched a series of “car-light” developments called Link, which emphasize accessibility to major urban employers, while Greystar’s Modern Living Solutions concept offers modular multifamily buildings that are assembled on site from factory-built elements in an effort to trim construction costs.

To promote more construction of this type of housing, a bipartisan coalition of federal lawmakers recently introduced the Workforce Housing Tax Credit Act. Like the low-income housing tax credit, the proposed legislation would provide tax credit to investors who build affordable apartments. The bill’s sponsors, including Oregon Senator Ron Wyden, say the credit would finance approximately 344,000 affordable rental homes. It’s been a pet issue for Wyden in particular; 70% of Oregon school districts have built or rented housing to provide support for their teachers.

Nationwide, the US is short approximately 2.2 million workforce units, according to a 2022 Fannie Mae study. Central Florida’s service-based economy has left it with one of the highest levels of need, Wendover founder and Chief Executive Officer Jonathan Wolf said. There are roughly 100,000 people living within a five-mile radius of Catchlight Crossings who would income-qualify for the development.

Rents at the Universal-led project will range from $400 to $2,200, depending on income qualifications (the average two-bedroom unit in the area rents for just shy of $1,900 a month). The development will also contain medical offices, retail, community space including pools and fitness centers, bike and walking paths and a tuition-free Bezos Academy preschool and adult education center. A transit center will connect residents to buses, ride-hailing services and company shuttles; a stop on the proposed Sunshine Corridor, a new east-west rail line that’s designed to help tourism workers get around, may take shape nearby.

“You’re not creating an economic ghetto,” Wolf said. “You’re creating a lifestyle enhancement for so many people, giving folks the ability for mobility.”

The theme park giant owns a few thousand acres in the area, so this was a relatively small donation, according to Sprouls. It also comes during a time of booming profits: Central Florida’s tourism industry generated a record $87.6 billion in economic impact in 2022. And since Universal transferred the land via a 501c3 charity with deed restrictions, the donation can lower development costs and help ensure long-term affordability; lots of affordable housing tends to revert back to market-rate pricing after a set term.

Employer-sponsored projects like Catchlight Crossings can’t mandate that only their employees can be tenants — that would violate fair housing rules. But for a customer-facing company like Universal, working to close the region’s housing gap can pay direct benefits, Sprouls said. When employees can’t find housing nearby and need to drive hours to get to work, it impacts not just their performance, but the guest experiences that drive satisfaction and repeat visits.

“It helps us to be able to recruit because people are able to have jobs here,” Sprouls said. “Salaries go into making you an attractive employer in the area, but you also need to make this an attractive place to live.”

Corporate Housing’s Mixed Record

Still, it remains to be seen if privately financed efforts like the Universal and Disney investments can have a significant impact on the lives of local renters. Other industries, most notably tech, have poured hundreds of millions of dollars and even billions into financing the construction of workforce housing near their headquarters. Amazon.com Inc., Google and Meta Platforms Inc. have all done variations of this kind of development, with mixed results. Many such efforts took off after severe backlash to the impact tech jobs had on local housing markets, and most were in the forms of loans, financing and leases, which can be helpful but not exactly game-changing. Recent swings in interest rates and increases in housing costs, not to mention struggles in the tech industry, have curtailed many of these programs.

“There was a lot of energy, and then there wasn’t,” Alex Schafran, a visiting scholar at San Jose State University’s Institute for Metropolitan Studies and a former consultant for Facebook’s housing initiative, told the Guardian. “The balloon didn’t pop overnight, but now there’s very little air in it.”

And the support of powerful local employers can’t inoculate these projects from community pushback. At a town meeting for the Disney project in September, residents raised a host of familiar objections about traffic congestion, school crowding and site location. When it comes to building multifamily developments, even Goofy has to contend with NIMBYs.

Wendover’s Wolf argues that while the financing part is critical, it may not be enough. His firm has been very involved in pushing for more government support for the affordable housing projects they specialize in. Associate Ryan von Weller, for example, was among the local developers who consulted with Florida lawmakers on a state bill, Live Local, which directed more than $700 million into supporting affordable housing. (Sprouls said Universal won’t see any tax benefits from their land donation.) But Wolf believes the area’s big corporate employers need to play a bigger role in solving this crisis.

“We need your involvement in it in a very direct way to work alongside us, to make this a success,” he said. “It’s not just a simple check and walk away. We need the land. We need cooperation.”

Here is the REAL problem with the lack of housing stock. Growth of new housing units has slowed to negative speeds as mortgage rates soared, but aren’t growing again with declining mortgage rates which remain relatively high. Add in the 11 million or so illegal immigrants crossing the border and we have a major problem.