The world was already experiencing an acute housing shortage, but the global market is only getting tighter by the day. The war in Ukraine, global shipping and supply chain issues, and the precarious reawakening of economies post-pandemic is wreaking havoc on construction and building materials, causing rapid price increases while housing supplies shrink. Inflation is creeping towards double digits in many countries, driven by the energy crisis.
Over the past few months, the resurgence of business-initiated moves has contributed to dramatic surges in demand for housing and our supply chain partners and Destination Service Providers are raising the alarm.
Several hot markets have very limited temporary housing options, most international schools have long waitlists, and some regions are suffering limited goods and services, including cleaning and renovations. Some of the hardest-hit regions include Singapore, Germany, Ireland, The Netherlands, and the UK. Ukrainian refugees have absorbed much of the capacity in neighbouring countries (Germany and Poland, in particular) and peak summer volume is likely to further exacerbate the challenges.
The best way around the housing hurdle is great preparation. Here are some of our top recommendations to help you plan accordingly, minimize negative employee experiences, and avoid disappointment among business partners depending on mobility.
How you can support your Assignees and Transferees:
- Support mobility counselors with a unified voice. While conducting internal planning and initiation calls, acknowledge and alert business partners and your employees that the current global housing market is challenging.
- Authorizations should include longer lead times to initiate the start of assignment to allow time to secure housing.
- Provide documentation of salary (Letter of Assignment/Employment Letter) immediately upon authorization, so that your employees can carry this information with them as they visit locations.
- Review Housing Budgets on a more frequent basis (quarterly or monthly) with data providers AND validate with local HR. Be ready to approve exceptions quickly.
- In the tightest markets, expect shorter lease terms and rental increases during the term of the assignment. Allow for housing budgets to be revisited throughout the assignment, as guaranteed monthly rental fee for the duration of the assignment is no longer a given.
- Be flexible on the number of days provided for Temp Housing and don’t delay authorizing an extension if your employees are struggling to find permanent housing.
- Be open to alternative housing options until permanent housing is available. It may be possible, depending on any given market, to use longer-term, extended stay hotels, and co-living which includes private rooms with en-suite bathroom and shower, but shared kitchen and living space.
- Be open to employees temporarily living in second-tier cities and working hybrid, part-time, from a home office.
- Consider “sight unseen” short-term rentals for a minimum of 4-6 months, or possibly longer, and extendable for up to 1 year or more. Photos and videos can be made available, but the employee will not have the option to preview the property in person.
- Evaluate where group moves or significant volume into one location take place and research investing in apartment “blocks” exclusively for assignment needs. Note that this solution requires companies to consider vacancy risk and services required, and takes a few months to implement.
Tips for Assignees and Transferees navigating tight housing markets:
- Start virtual home searches early, to get an idea of types of properties available in any given market.
- If virtual tours are not possible, prioritize home search immediately upon arrival.
- Expect rapid changes in availability.
- If suitable housing is found, secure it right away, even if it means an extra 2 months’ rent. At the very least, weigh this option against typically more costly long term stays in a hotel or corporate housing.
- Decide quickly (quick = on the spot or within a few hours, not a few days).
- Be ready with your deposit; same day and on the spot is not unusual.
- Save “wish lists” for improvements for after securing the unit with a deposit, signed agreement, or both and keep them to a minimum.
- Bring proof of employment, base salary, and funds for a deposit on the property visits.
For non-essential moves, consider interim virtual assignments, unaccompanied short-term assignments and/or extended business trips/commuter assignments. As the market eases up, the family can join under less stressful conditions and experience a smoother, calmer transition.
Remember that you’re not in this alone. Weichert can be instrumental in supporting these recommendations, helping to speed up the process of securing appropriate housing even within the most challenging markets. For more guidance on overcoming the global housing crisis with minimal impact to your program and the employee experience, talk to us!
Editor’s Note: In speaking with partner providers in The Netherlands, Germany, United Kingdom, Ireland, Singapore, and Hong Kong, the feedback was unanimous: Airbnb and similar sharing economy solutions cannot be universally endorsed due to inconsistent quality control, safety and security concerns, and local restrictions on lengths of stay. Learn more in our Duty of Care whitepaper.