Broad Reach Healthcare Happenings

Business has been good at Pate's Restaurant. But with success has come the need to address a growing problem on the Cape, namely how to house employees where affordable workforce housing is scarce.

The cost of housing on Cape Cod skyrocketed during the pandemic, putting additional strain on a region where year-round and seasonal housing was already hard to come by. That's posed particular problems for seasonal workers on J1 and H2B visas, which many restaurants and businesses depend on to help carry them through the busy summer season.

Recognizing the problem, Pate's purchased property itself to house seasonal employees from both Pate's and the Chatham Cut.  "We have multiple restaurants in Chatham and we have another one on the drawing board, so you've got to be able to house people," said Jim Peterson, a partner in both restaurants. "If you can't, [doing business] just isn't realistic."

Pate's bought the former Master Mariner Motel on Route 28 for $850,000 in early 2022, freeing up 15 rooms that Peterson said together provide housing for 30 workers.

"It's a fact of life," he said of the purchase. "It's the cost of doing business is what it really amounts to."

Pate's is just one business that has resorted to digging into their own pockets in an effort to help house staff. The Chatham Squire similarly purchased the former Ridgewood Motel in Orleans last year, according to the restaurant's manager, Shannon Neal. More recently, the restaurant purchased land at 75 Depot Road which it had previously been renting to house staff. The properties are used to help house both year-round and seasonal employees, Neal said.

The need to get more creative on housing has grown in recent years, Neal said, noting that staffing has "dwindled" in the face of the housing crisis.  "It's hard to get staff that can afford to live here," she said.

In Orleans, Brian Junkins, who owns Friends' Marketplace, has also purchased property near the market that he plans to convert into four condo units. He discussed the realities facing local businesses relative to housing during a discussion hosted by the Orleans Citizens Forum last month.

"I've had many people show up at the store with a backpack," he said. "They'd be just off the bus from New York and they'd need a place to stay. We've been able to work that out over the years, but we know that's our job now, to try and do a better job of securing housing."

Pate's and the Chatham Cut together employ between 30 and 40 workers during the summer. Some live locally, while the Mariner provides rooms for those employees that need it. Other rooms are used to accommodate employees from other businesses, Peterson said. Those businesses pay Pate's for the room[s] up front, and the cost of rent is then deducted from employees' paychecks, he said.

But while some businesses are doing their part to make a dent in the region's housing shortage, business owners say a long-term solution to the problem remains out of sight. Peterson said Pate's will continue to rent its rooms to help other businesses as it's able. But with the unforgiving nature of the current market, the restaurant may need to eventually use those rooms for its own staff.

"I got another call today from someone looking for three rooms," he said last week. "We just don't have them. We try to help out where we can, but we have to protect our own flank at the same time."

Broad Reach Healthcare has been buying property for employee housing since 2018. The North Chatham-based company bought a six-bedroom residence in Brewster in 2018, followed shortly after by the Captain Haskell Rose building on Main Street in Chatham. Broad Reach CEO Bill Bogdanovich said the company has since purchased another property for housing in Dennis, and is currently in the process of closing on another Dennis property.  The company currently houses 25 employees across its properties, Bogdanovich said. The properties are rented according to what workers can afford to pay, and are not designed to generate a profit. But the company benefits from the stability that the housing provides its employees, he said.

"Instead of trying to look at it from a real estate perspective, we just want to break even," he said. "Our employees who are renting are often doing so at a better-than-market rate. As long as it pays the mortgage, so to speak, it's really working for us."

Broad Reach builds some flexibility into its rentals, allowing employees the option of deferring rent during the winter months to use their earnings instead to keep up with the higher cost of utilities.  Bogdanovich said Broad Reach takes a "buy smart" approach to purchasing properties, making sure the cost comes in at a point where the company can keep rent low for employees. The company also had good partnerships from local banks in its property purchases, he said.  "If we can get a better handle on it, we could do a lot to stabilize our workforce that might not otherwise be as stable, and prevent year-round people from leaving the Cape," he said of the region's housing problems. 

The issue of housing is front of mind for local officials across the Cape, as towns continue to work toward ways of creating the affordable and workforce housing that is needed in their communities. That includes changes to local zoning. In Orleans, articles are set to go before voters at the annual town meeting on May 8 that would expand upon where and how housing can be created. One article, if passed, would reduce the minimum lot size for a one- or two-family dwelling from 40,000 to 20,000 square feet. Another seeks to allow accessory dwelling units on panhandle lots. Planning officials in Orleans have also discussed the potential for creating dormitory housing in town for seasonal workers.

At last month's discussion with the Orleans Citizens Forum, Junkins said regulatory changes are needed at the local level to make efforts to create housing less restrictive.

"There has got to be other ways to make it easier," he said. "We can still adhere to every regulation that we need to adhere to, but let's think about how to make it easy rather than put the stop sign up every time we ask a question."

Email Ryan Bray at ryan@capecodchronicle.com