St. John's Medical Center in Jackson had a choice: Face chronic shortages of nurses and other health-care professionals, or tackle housing head-on.

The hospital chose the latter.

"With every offer, housing makes or breaks the deal," Assistant Administrator Virgil Boss said. "From entry level all the way through doctors."

In 1999, St. John's needed seasonal help. So hospital officials bought a three-bedroom condo next door for use by traveling nurses.

In 2001, they added a motel across the street and thereby acquired 38 units in one fell swoop. The units were converted into long-term rentals, short-term rentals and transitional housing.

Hospital officials hoped to fill the former motel within a year. It was full in 90 days, and has been full ever since.

"We became full-fledged landlords at that point," Boss said.

Today, St. John's Medical Center has 77 housing units - condos, houses and duplexes - in its inventory. Forty-eight more are planned between now and 2012.

"We have a full-blown property department with storage units full of furniture, a guy who spends three days a week moving people in and out, moving furniture in and out," he said. "And now what we're doing is building deed-restricted homes so they can transition out of paying rent and never get ahead, to buying a house. We're the guaranteed buyer, we build it, we sell it to them at a very fair price."

And if a buyer decides to leave Jackson, the hospital obtains two appraisals, then factors in a predetermined growth cap and writes a check.

"They don't have to deal with a realtor, they have cash in their hand when they leave the valley, and we turn it right back and sell it to the next person who's qualified for that space," he said.

When switching from owning an inventory in order to rent units to building an inventory in order to sell units, Boss said what's needed is seed money and a discount mechanism to keep places affordable to people in various economic strata.

Who gets what kind of unit is determined by a committee of non-management hospital employees, who review housing applications each month.

One criterion is fairness. "When we manage it, we don't let a guy making $200,000 get a house that is the only choice for a family making $60,000, because that's not fair," Boss said.

If the first person decides against a unit, the hospital contacts the next person on the list. Rarely is a third call necessary.

Boss says rents typically are on the low end of the market curve. The housing program has never lost a penny, he adds.

Boss doesn't buy arguments that St. John's Medical Center, a government entity, should stay out of the housing business.

"That's putting your head in the sand because when you don't have nurses and you start to cut services, the same people that give that argument will be at our door bitching because there isn't an OB nurse and there isn't an OB doctor and there isn't an ER doctor," he says.

St. John's faces the same problems as hospitals in other resort towns, like Vail and Aspen in Colorado and Sun Valley in Idaho. All have adopted similar housing programs. Every year, hospital officials from resort towns gather to compare notes and tweak their housing strategies.

It's just part of what you have to do," Boss says.

Business Editor Tom Mast can be reached at tom.mast@trib.com, or call 307-266-0574.

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