Interest in district-subsidized teacher housing in California intensifies

Photo courtesy of Jefferson Union High School District

Jefferson Union High School District in Daly City will open 705 Serramonte in May with 122 apartments for teachers and other staff.

Next month, 122 teachers and other employees in the Jefferson Union High School District in Daly City will learn if they won a drawing that will allow them to move into a new housing project with below-market rents that their district is building. Nicole Ann Polo hopes to be one of them.

A math teacher at her alma mater, Westmoor High, Polo has been living with her parents, which makes her better off, she said, than colleagues who moonlight delivering DoorDash or commute 90 minutes each way from the East Bay. But her grandparents also have moved in, and she needs a place of her own — impossible to find when, even as a fifth-year teacher and a department head, she makes in the upper $50,000s.

The rents that she and the other tenants will pay — an average of $1,462 for a one-bedroom apartment, $1,896 for two bedrooms and $2,413 for three — while not cheap in some locales — will be about 60% of market rates in the area. So, lottery willing, Polo won’t have to switch to a better-paying district or move to more affordable Poway in San Diego County, where other relatives live.

“I’m really looking forward to staying with a district that means so much to me,” she said.

When the U-shaped three- and four-story 705 Serramonte apartment complex opens in mid-May, with a gym, two outdoor play areas, a community room, and lounges on each floor, Jefferson Union will join an exclusive list. Los Angeles Unified and Santa Clara Unified are the only other K-12 districts in the state with subsidized housing for staff. And it’s been 20 years since Santa Clara pioneered the concept with its 70-unit Casa del Maestro, which, by most metrics — data on teacher retention and waiting lists for a unit — has been a success.

But the pipeline of projects is growing now, particularly in the Bay Area, where many teachers are struggling to pay for housing. Construction has begun on employee housing in the Mountain View Whisman district in Mountain View and Jefferson Elementary district in Daly City. Santa Clara County supervisors have given the green light to start construction later this year on housing for several districts on county property in Palo Alto. Meta, Facebook’s parent company, is chipping in a quarter of the $103 million cost of that project.

Five other California districts earmarked employee housing in school bonds that voters passed in the last three years. Forty-six districts are in various states of moving forward with a staff housing project, according to a 150-page report, commissioned by the California School Boards Association, that was released last week. “Education Workforce Housing in California: Developing the 21st Century Campus” compiled information for the first time on every school property in California and rated them based on teachers’ and other school employees’ need for housing assistance and the sites’ suitability for providing it.

The report’s conclusion: Half of the 151,500 acres owned by California school districts are potentially developable; those sites are located on 7,068 properties; 61% are located where entry-level teachers face challenges affording housing. And 1 in 5 properties are particularly suited for housing, after weighing employee income and the sites’ zoning and other assets.

“Districts own a lot of land, and it takes only a small percentage to do something,” said David Garcia, policy director for the Terner Center for Housing Innovation at the University of California Berkeley, a co-author of the report. “Employee housing isn’t a panacea, but it has potential.”

The report was a collaborative effort of UCLA’s cityLAB, the Terner Center, and the Center for Cities + Schools, also at UC Berkeley. Along with a database on potential housing, the report examines strategies for development and includes a 30-page, step-by-step, how-to handbook.

“We’re trying to provide more information that sparks ideas across the state and gives people a road map to do a project that might not have occurred to them,” said Troy Flint, chief information officer for the school boards association.

Alan Katz, president of the Brookwood Group, who is advising several districts planning teacher housing, said, “There’s no question in my mind that there’s a terrific interest now by a myriad of school districts. With the research in the report, you’re going to see administrators and school boards starting in Northern California and probably throughout the state to consider projects.”

Big need for housing assistance

The data cited in the report underscore the need. Nationally, 35% of teachers are considered rent-burdened, defined as paying more than 30% of their income as rent, and the problem is pronounced in California, especially among Black and Latino teachers, according to the report.

A study in 2016 by the real estate firm Redfin found that in the Bay Area, only 1.2% of homes on the market in Alameda County were affordable for the average teacher; in San Francisco, Santa Clara and San Mateo counties, it was less than 1%. Rising reprices suggest it’s only gotten worse since then.

According to data in the report, first- or second-year teachers make up 1 out of 8 teachers statewide, with salaries ranging from $37,000 to $84,476. Of those teachers, nearly half earn less than 80% of the area median income — a measure that qualifies them as “low income” and eligible for federal housing assistance. Location matters: $50,000 in the Central Valley might exceed low-income, while $50,000 definitely would not in the Bay Area.

High rents and high-priced homes are compounding staff shortages and high turnover rates in high-cost counties, Flint and others said. Districts like Jefferson Union have become revolving doors as new teachers tire from long commutes and head to wealthier districts, said Tina Van Raaphorst, Jefferson Union’s associate superintendent of business services.

“California’s deepening housing crisis threatens the quality of K-12 education,” the authors of the California School Boards Association report wrote. “Public school employees — especially teachers — struggle to live in the communities where they work, and school districts face growing challenges in recruiting and retaining staff, creating instability that exacerbates opportunity and achievement gaps.”

The California Department of Education projects that enrollment will decline in two-thirds of districts, and some could face financial instability from a loss of state revenue. That decline, which won’t be reversed in the short or medium term, said Flint, also creates an opportunity: converting underutilized properties to school housing can give schools a leg up on recruiting classified staff and teachers.

Jeff Vincent, co-founder and director of the Center for Cities + Schools, a co-author of the report, agreed. “There are schools with maintenance problems that may have been closed or are worn out.” One option is to mothball a school; another is workforce housing, he said.

Building on school district land alone can save as much as 20% of a project’s cost, Vincent said.  But building affordable housing is complicated — a point the report reiterated — and requires thinking differently.

“It hasn’t been the mindset of school boards to think about development for other than classrooms,” Vincent said.

Financing is tricky, and piecing together a package can require a half-dozen sources; there will be regulatory and zoning hurdles at the state and local levels. And selecting a site will require patience and, the report emphasizes, transparency. Boards must make compelling arguments and collaborate from the start with neighbors concerned about traffic and losing open space for dogs and soccer.

A confluence of factors that school districts have to navigate — local zoning, construction costs during a labor shortage, complexities of tax credits and multiple site reviews — “make it incredibly difficult in the best of circumstances to build affordable housing,” said Garcia. While other types of school construction customarily take three to five years to complete, the report advises districts to add two years to the timeline for staff housing projects.

Throughout that time, Van Raaphorst said, “it’s really important to have strong board members who are willing to be hands-on, dedicated and willing to go to bat for the project.”

Removing some of the obstacles

Last week, Assemblymember Richard Bloom, D-Santa Monica, introduced legislation intended to remove some of the big hurdles to developing housing. Adopting some of the recommendations in the CSBA report, Assembly Bill 2295 would eliminate the need for approval of plans by the Division of the State Architect, whose expertise is schools, not housing. And it would establish the right of districts to build housing up to three stories on a school property, assuming projects meet basic criteria. This wouldn’t eliminate local zoning review, but it could thwart not-in-my-backyard opposition. Dana Cuff, director of UCLA’s cityLAB, helped draft the bill.

“Teachers’ salaries are not keeping up with the rising cost of living in California. Coupled with our mounting housing crisis, school districts are hemorrhaging good teachers and quality staff members faster than we can recruit them,” Bloom said in a statement.

Jefferson Union didn’t face zoning hassles or community resistance, enabling it to move from voter funding to completion in four years. The project, near Interstate 280, is on a rundown property that houses the district office in a former high school. The district had designed the site for commercial use or housing years ago. In 2018, voters approved a $33 million bond as a taxpayer subsidy to underwrite about 45% of the $75 million project, covering the rest with loans secured by rents from the apartments. 705 Serramonte may be the first phase of a commercial and residential neighborhood, perhaps including more employee housing, that would generate revenue for the district. At least that’s the vision.

705 Serramonte was financed without federal low-income housing tax credits, the primary method of subsidizing affordable housing nationwide. With the passage of California’s Teacher Housing Act of 2016, authorizing their use by school districts, they’ll be integral to most projects, Garcia said. The tax credits are competitive and carry restrictions: Targeted to employees earning less than 80% of an area’s median income, the limit is why teachers no longer qualify to live in Los Angeles Unified’s employee housing complexes and why Jefferson Union didn’t pursue them.

But the report found the 80% limit would cover many lower-paid teachers in half the districts with developable school properties. Nearly two-thirds of those districts are in urban areas, where median salaries are high. And, Garcia said, the federal tax credits could be packaged with state programs that permit incomes above the 80% threshold.

While Jefferson Union is prioritizing employees under 80% of area median income, it will accept employees earning up to 120%. It is allocating 60% of the units to teachers and 40% to classified staff. 705 Serramonte will serve about a quarter of the district’s 500 staff, Van Raaphorst said.

Nicole Ann Polo

The district didn’t heavily market 705 Serramonte, but Polo said that among her peers, teachers in their 20s and 30s, 90% are interested in it. With the most English learners in the district, Westmoor High is a special place, she said, where immigrant students from are Jordan, China, Brazil, the Philippines and El Salvador.

She and her colleagues face the same dilemma: “It’s expensive to stay but too good of a community to leave,” she said.

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