Club and Resort Owners Tackle the Major Problem of Employee Housing
By Steve Eubanks
Of all the problems facing course owners who are trying to recruit high-quality talent, one of the toughest is the nationwide housing crisis. Regardless of your job, if you work in the golf industry, buying a home has become an almost insurmountable challenge. Interest rates for 30-year fixed-rate mortgages are at their highest levels in two decades. And with younger college graduates carrying greater debt into their careers than any generation in history, more young people are moving back home with their parents to save money than at any point since pollsters began asking the question.
According to Zillow, with current inflation, it takes the average first-time homebuyer nine years to save enough for the median down payment for a modest U.S. home today.
Rents aren’t much better. According to recent surveys, a majority of Americans under age 35 struggle to make rent payments in the areas where they are employed.
That problem is exacerbated in neighborhoods near high-end clubs, and off the charts in resort areas. The better the golf course, the tougher it is for employees to live nearby. Have you checked the home and rental prices near Pebble Beach lately? It makes you wonder where the cart-barn staff and maintenance crew live.
“It’s interesting, I just calculated the average commute for our employees and it’s 40 minutes one way,” said Wes Pudwill, director of talent and culture at Desert Mountain in Arizona. “We’re located in North Scottsdale, which is an affluent area, and most of our employees live in central Phoenix, so it’s not easy for them to get up here.”
Commute times have always been a recruitment barrier for clubs and resorts. Unless you are an older club on a public transportation route, getting golf maintenance and food-and-beverage staff on site is a problem. Great employees often choose a job closer to home or in another industry.
Desert Mountain, which has seven golf courses and 2,000 homes, has taken a multi-pronged approach to this problem.
“There are a number of things we’ve done here,” Pudwill said. “The first is compensation. We make sure that we are at the top of the market in terms of pay scales. We don’t want to be competitive. We want to be at the top. We want to be the finest club in North America, so we have to pay like the finest club in North America to keep our people here. We conduct compensation surveys multiple times a year to ensure that we’re at the top of the market.
“The other thing that has really helped us here is we offer van pools for our agronomy staff. We have more than 250 employees in just our greens staff and they are typically the lowest paid of our positions, so they need help with transportation. We partnered with Maricopa County, and we provide vans and drivers to pick employees up and take them home.”
The club also looked to alleviate another major expense with a healthcare option. Desert Mountain has an onsite medical clinic manned by physicians and nurses that provide free services for employees and their families.
“We have to have better benefits than others,” Pudwill said. “We do H-2B and J-2B (part-time employment), and we have partnered with an apartment complex to help with housing. But it’s still about 40 minutes away. We’ve examined a number of options on that front, including looking at small apartments to buy or small hotels to buy. But the real estate market shot up and it’s just not (economically) feasible.”
That’s the crux of the problem. The first law of real estate is that a piece of ground is valued on its highest and best use. Land around resorts or high-end clubs is more expensive. As demand for housing in those areas rises, affordable options move farther and farther away. Again, there aren’t many $1,000-a-month apartments on the Monterey Peninsula.
Cliff McMackin, director of resort development for Sea Pines on Hilton Head Island, saw this problem coming years ago and put a plan into action to fix it.
“There haven’t been many multifamily or apartment developments in the last few years, but the moment they do come up, they’re snatched up by snowbirds or people downsizing,” McMackin said. “So, rents are pushing the markets and really aren’t affordable for the workforce.
“We had the vision and foresight going back to 2016 to start searching for land to acquire that was close to the resort, but also has pedestrian connectivity to grocery, healthcare, banking and other needs that we all have. We weren’t looking for land in the middle of nowhere.
“We were able to piece together 6½ acres less than a mile from our front gate that we were able to assemble from several entities. We bought that specifically for the purpose of finding housing solutions for our employees. Right away, we built 16 three-bedroom apartments and opened those in 2021. Those were immediately utilized for our international workforce and internships. That provides housing for 92 employees.
“Our next phase will focus on our domestic workforce. That could be 60 to 100 units, one to two bedrooms, that will be for more of our permanent employees. Golf and food and beverage are going to be our two biggest areas where this will help recruiting. In golf maintenance, it’s paramount to have these facilities.
“It’s going to be an absolute requirement for a resort to have its own employee housing. It’s the cost of doing business. As an industry, we hadn’t had to face that music yet, but it’s here now.”
A lot of northeastern clubs have offered limited employee housing for decades. From the beginning of golf in America, pros had small apartments over the golf shop, or the maintenance facility had a few dorm rooms in the back. But nothing at scale has existed in the U.S.
Asia is a different story. From the beginning of the golf booms in China, South Korea and Japan, employee apartments – many of them the tallest buildings on the properties – have been an integral part of golf clubs.
In America that sort of thing wasn’t necessary, until now.
“We didn’t have any problems in the past,” said Fred Fung, CEO and general manager of Bonita Bay Club in Bonita Springs, Florida, just north of Naples. “We had historically subsidized apartments for our seasonal employees and interns, and we provided some guidance for those employees who lived in the area. For example, if you were coming to work here from Georgia or other parts of Florida, you knew how to find a place to live. But if you were coming from another country, that process was more difficult. In the past, we were able to work out arrangements with local properties.
“But after 2020, once people realized that they could work remotely or they wanted warmer weather, the Southwest Florida real estate market exploded, which resulted in a huge diminishment of reasonably priced real estate. Rental prices, while always higher than other parts of the country, were at least reasonable in the past. You could find an apartment somewhere near the workplace that made economic sense. But demand has pushed those properties out of reach now. Even if seasonal employees could afford it, there simply isn’t enough inventory.”
That’s true everywhere. Old motels have become retro-boutique apartments, apartments have been retooled as condos, and small, single-family homes have been razed for million-dollar properties.
“We’re unique in this area in that we’ve found a creative solution,” Fung said. “We own a building that was zoned for many different uses except employee housing. After receiving a gracious waver from the Bonita Springs City Council, we’re converting it to employee housing, almost dormitory style. The building will accommodate 42 beds, the majority will be modules featuring two double rooms sharing a common bath. Each floor will have a lounge, kitchenette, and laundry.”
That won’t work for everyone, obviously. For example, a newly-married assistant golf pro won’t move his bride into a unit with a common bath. But for seasonal maintenance workers, it could be perfect. And with the housing option, Bonita Bay, like Sea Pines and Desert Mountain, will have the ability to recruit quality talent.
“Owning your own building for staff housing will be an absolute game changer,” Fung said. “We will no longer be reliant on the local market for either reliability or availability.”