Welcome to Muskville, Texas

Elon Musk, who inhabits the role of a gonzo captain of industry like no other figure in modern American life, has lately been dreaming aloud about building his own version of an old-fashioned company town.

And not just dreaming. In September, Bastrop County, Texas, outside Austin, approved the construction of Project Amazing, a subdivision of 110 modest homes on land owned by Mr. Musk that is to be called Snailbrook. Banners hanging from the (solar-powered) street lamps declare, “Welcome / Snailbrook, Texas / Established 2021.” Several of Mr. Musk’s companies, including Tesla, have factories nearby, and he reportedly has been spreading the word that he wants to build a community for his workers.

Company towns in the United States have been around for nearly as long as corporations. From the wooden boardinghouses built for female textile workers in Lowell, Mass., in the 1830s through the development of model factory towns like Pullman, Ill., and Alcoa, Tenn., industrialists provided housing in the hopes of both attracting and controlling employees. It’s harder to defy an employer when leaving a job means leaving your home, too.

That model faded away after World War II as workers sought greater autonomy, corporations discarded a broader sense of obligation and the government assumed responsibility for providing affordable housing. Developers continued to build utopian model towns like Columbia, Md.; The Woodlands, Texas; and Irvine, Calif., which included housing and places to work. But the employers did not own the housing, and residents did not necessarily work in the community.

Snailbrook is a throwback. And as a dire housing shortage makes it hard for companies to recruit and retain workers, Mr. Musk is not alone in judging that it’s time for a revival.

In Montana, Bozeman Health, a nonprofit health care system perpetually unable to recruit a sufficient number of nurses, is funding the construction of 100 housing units for its employees. The meatpacker JBS is building apartments near some of its Iowa slaughterhouses. Cook Medical, based in Bloomington, Ind., is building 300 single-family homes, which it plans to sell to employees for less than $200,000. Some big employers, including Meta and Disney, are partnering with developers to build affordable housing projects in the communities where they operate.

Mr. Musk has been wrestling for some time with the problems caused by high housing costs. In October 2021, he listed the shortage of housing in the San Francisco area among the reasons that he had decided to move Tesla’s headquarters to Austin. Even before he came to that decision, Mr. Musk tweeted in April 2021 that there was an “urgent need to build more housing’’ in the Austin area.

The region’s housing crisis has only intensified. In Bastrop County, the median monthly rent is about $2,150, according to Zillow. That is more than half of the average worker’s monthly salary at Tesla’s Giga Texas plant.

Building outside an existing town means Mr. Musk gets to be in charge, which has long appealed to rich people who don’t want to be restrained by democratic checks and balances. Les Wexner, the former chief executive of L Brands, created a town of mansions to surround his own mansion in the Columbus bedroom community of New Albany, Ohio. Before he became king of England, Charles oversaw the construction of an ersatz antebellum town, Poundbury, to underscore his view that his country took a terribly wrong turn somewhere around World War II. The Italian designer Brunello Cucinelli renovated the hilltop village of Solomeo as a kind of fashion show.

Mr. Musk does seem to have enjoyed exercising his naming rights. Snailbrook is named for Gary, the official snail of the Boring Company, a tunneling company that is one of Mr. Musk’s less successful ventures, which has a workshop nearby. Company towns are often named for their owners — Alcoa; Hershey, Pa.; Steinway Village, N.Y., in Queens — but one can surely sympathize with Mr. Musk’s decision not to call his town Boring.

Yet the initial plans are strikingly devoid of the utopian aspirations and showmanship that characterize most of Mr. Musk’s ventures. He’s just planning to build a few rows of low-cost homes in the middle of a field. The Wall Street Journal, which first reported Mr. Musk’s plans, said one building would house a small Montessori school.

The real benefit of building outside an existing municipality is that cities and towns, particularly in desirable areas, increasingly operate as private clubs devoted to preventing development. Last year Vail Resorts announced plans to build subsidized housing for 165 workers in Vail, Colo., where the average home costs well more than $1 million. The town responded by invoking eminent domain and moving to seize the property to prevent construction. The town’s mayor, Kim Langmaid, says the proposed housing would cause bighorn sheep to starve.

It’s hard to know how seriously to take Mr. Musk, who has a long history of dreaming out loud. He previously suggested that he might seek to establish a city around SpaceX Starbase, his rocket-launching facility outside Brownsville, Texas. In a March 2021 tweet, Mr. Musk declared that he was “creating the city of Starbase, Texas.” He added, “From thence to Mars, and hence the Stars.”

(Mars, as you may recall, is another place where Mr. Musk plans to build a city.)

Still, while Snailbrook doesn’t exist in any legal sense, the idea has progressed beyond mere tweeting. There are already a few houses on the ground and a recreation center. In Texas, as soon as a community has 201 residents, it can petition to incorporate as a town.

The standard takeaway from the history of company towns is that the best way to help workers is to pay them. When Disney announced plans last year to build housing on company land in Orlando, Fla., one of its largest unions blasted the idea as a poor substitute for better pay. “Workers don’t need affordable housing; they need to be able to afford their housing,” Jeremy Haicken of Unite Here told The Orlando Sentinel.

But raising wages isn’t enough by itself. In markets where construction isn’t keeping pace with demand — a category that currently includes much of the United States — giving some workers more money just makes it harder for everyone else to find a place to live. Disney workers don’t just need more money. They also need more housing.

Political leaders in the Austin area, and everywhere else companies are entering the housing business, ought to regard those plans as evidence of municipal malpractice.

Companies shouldn’t need to build worker housing.

Workers shouldn’t have to live in company towns.