Day #055: City employee residency initiatives

Residency requirements are bad for attracting talent, but a residency-specific housing stipend could extract many of the same benefits without the cost.

September 12, 2014; 7:08 AM • by Aaron Williams

Inspired by Michael Bierut’s 100 Day Project, 100 Days to a Better RVA strives to introduce and investigate unique ideas to improving the city of Richmond. View the entire project here and the intro here.

Idea: Maintain residency requirements for directors while creating residency incentives for city employees.
Difficulty: 3 — Paternalism isn’t popular in the United States. The financial benefits to both parties would need to be attractive while not burdening the City coffers.

In the 1970’s, Chicago created some of the strictest residency requirements in the nation for City employees. “Housing experts and urban planners credit the residency rule with stabilizing areas on the edges of Chicago.” In other cities, residency requirements have limited the talent pool of potential hires.

There are both costs and benefits to residency requirements, and cities across the country approach the idea differently. The benefits of employees living within city limits however are undeniable. Richmond should maintain its residency requirements for department heads while creating incentives to boost the residency of City employees while attracting more talent.

Teachers, police officers, firefighters, and other City employees benefit neighborhoods and communities when they make the decision to live in the city. The employee’s incentives to perform better increase as they have a stronger vested interest in the area. Household creation boosts the population and tax base while keeping talent within the city limits.

For decades some cities have tried residency requirements in order to extract all of these benefits, but residency requirements limit the pool of talent considering employment in a city. Richmond wants the best firefighters and economists regardless of where they live.

Employees want to be a part of this community, and they aren’t willing to leave benefits or money on the table. A simple, and relatively small, residency-specific housing stipend or tax credit could incentivize residency for a smaller sum than is gained financially by the City in taxes.

For example, instead of boosting salaries $500¹ in three years, increase salaries $400 and add a $400 residency housing stipend. The city would gain back more than the $300 difference while strengthening and improving the community, and households would have more money to put towards rent or mortgages.

The program could start as a pilot either focusing on a single department such as police or focusing on employees who currently live outside of the city. Plenty of forward guidance for the program would be necessary in order to extract the full benefit, because household and employment decisions are made on a longer timeline.

There are positive externalities to having Richmond employees live within the city limits. The extra pair of trained eyes offered by the off-duty officer, the back to school advice offered by a teacher, and the increased civic engagement promoted by an assistant during a neighborly stoop conversation are just the beginning. The benefits of limiting employees to residents of the city are outweighed by the costs, but a series of incentives promoting residency creates benefits that are shared by residents, employees, and the government.

Love this idea? Think it’s terrible? Have one that’s ten times better? Head over to the 100 Days to a Better RVA Facebook page and join in the conversation.

Photo by: taberandrew