In some of the nation’s hottest real estate markets, school districts are trying new tactics to help employees cover the spiraling costs of renting or buying a home.
The Denver district, for example, is teaming up with a lending company to help teachers, principals, custodians, and others who work in schools put down as much as half the down payment on a home.
In Florida’s Miami-Dade County, the school district and the county are floating a proposal to build apartments—with first preference for teachers but spots for others who work in the district—on the campus of a brand-new middle school.
The Denver and Miami-Dade efforts highlight a growing concern in school districts where educator salaries have not kept up with housing prices: how to recruit and keep workers who must fork over huge chunks of their paychecks for rent or cannot afford to buy homes where they work.
Housing costs are a concern not just for rookie teachers and other lower-salaried employees but also for principals and other district leaders—a pressure that is forcing school systems to think up new ways and partnerships to meet their workers’ needs.
‘Acute Concern’
In Colorado’s Roaring Fork district in Glenwood Springs, about 41 miles from Aspen, officials have already built low-cost housing for teachers. More than a decade ago, officials in the Santa Clara, Calif., district, in the heart of Silicon Valley, where housing costs are some of the highest in the country, opened what would ultimately become 71 affordable one- and two-bedroom apartments for teachers.
From offering child care to building tiny homes, districts are trying out a variety of ways to recruit teachers and keep them around.
“This is a problem that’s shared by all members of our team,” Tom Boasberg, the superintendent in Denver, said. “It’s an acute concern for our teachers; it’s an acute concern for our bus drivers, our custodians, our paraprofessionals, our school psychologists.”
In addition to Denver’s skyrocketing housing prices—in March, the median price of a single-family home was $459,500, according to the Denver Metro Association of Realtors—Colorado’s per-pupil funding has lagged behind the nation’s average by nearly $2,500. And in the eight years since the Great Recession ended, the state’s school funding levels still have not rebounded, Boasberg said.
Just last week, Colorado lawmakers dropped a proposed funding formula that would have sent more money to school districts, providing more resources to pay district employees. Hundreds of the state’s teachers flooded the state Capitol late last week for a two-day walkout to press the legislature to boost school funding.
In a recent survey, three-quarters of the district’s teachers said that housing affordability was an important factor in deciding whether they would continue to teach in the school system, and the same percentage said they would be interested in applying for a down-payment-assistance program if that option were available, Boasberg said. The base salary for newly hired teachers is roughly $42,000 annually.
That survey, along with a report by the Denver-based Donnell-Kay Foundation on how high housing prices affect teacher retention, was part of what led Denver to work with Landed, a Silcon Valley startup that specializes in offering down payments to people who work for school districts in jurisdictions where housing prices have increased in recent years.
The company has helped nearly 50 educators—all of them in the San Francisco Bay Area, Marin County, and Orange County, Calif.—make down payments on homes. While the majority are teachers, some are principals, others work as support staff and in district facilities and athletics departments, said Alex Lofton, the company’s co-founder. The company has also offered home owner classes to a larger number of educators, he said.
Creative Solutions
States and cities have long operated affordable rental- and homebuyer-assistance programs for which some teachers and district workers qualify. But in some of those cases, administrators and veteran teachers earn too much to qualify, and some of the terms can make such programs unappealing to applicants.
New Jersey, until recently, offered a Live Where You Work program, which provided low-interest loans to qualified homebuyers to buy homes in the cities where they work. Many teachers and school-based employees would have qualified for the program, which in some cases had a maximum income limit of $100,000 for a two-person household.
The city of San Francisco also already has a down-payment-assistance loan program, as well as one to help teachers pay for closing costs on home purchases.
While housing affordability is often the challenge in high-cost urban districts, lack of housing and poor quality of the housing stock are often the headaches in rural areas, said Robert Mahaffey, the executive director of the Rural School and Community Trust.
As a result, a program like Landed may not work in helping to recruit and retain teachers in rural areas, Mahaffey said.
However, a comprehensive investment program that includes help for not just educators but also returning military veterans, small business owners, and health-care workers may incentivize builders and contractors to build new housing or restore the ones already there. Teaching villages, such as one in McDowell County, W.Va., can also help, he said.
The Miami-Dade project, which envisions about 300 apartment units as part of a new middle school complex, is still being refined. But the proposal gives a hint at how complex it can be when school districts wade into housing. The county housing agency is involved, along with a private developer who will build the units. The project will also receive money from a special taxing district in which the school is located, according to the Miami Herald.
Meanwhile, the Denver district is working with the city to expand affordable-housing options, and it’s reviewing its building inventory to see whether unused or underused district property could be used for housing, Superintendent Boasberg said.
Veteran teachers and principals who do not qualify for many of the city’s affordable-housing programs because they make too much money may be able to take advantage of the Landed program.
The company’s foray into Denver—its first outside of California—was helped by a $5 million investment from the Denver-based Zoma Foundation. The money will be used to make the down payments on the homes.
Landed provides half the down payment, up to $70,000. When the homeowner sells the house, Landed collects 25 percent of the profit. If the value depreciates, the company shares in the loss. Landed is a for-profit company that collects referral fees from real estate agents whom they connect with clients who’ve already got their financing lined up.
Lofton acknowledged that his company’s program will not help all educators: They still have to come up with their half of the down payment.
But the program provides an entry point for many who do not have family wealth to tap into. About half the people who have used Landed are those of color, Lofton said.
“It’s really been the bank of mom and dad. ... [That’s] how a lot of people have been able to purchase their first home,” Lofton said. “They get support from family, and that support, unfortunately, is limited to families that have been able to build wealth for generations and generations.”
Getting Into the Game
Corey Kern, the deputy executive director of the Denver Classroom Teachers Association, is skeptical that Landed will have a big impact on teachers in a district where owning a home has become a “fairy tale” and some teachers need roommates to pay the rent.
“It’s really a smart move for Landed because the Denver market is growing really fast; it’s a good PR move for the district,” Kern said. “But for teachers, I think there is a very low number of folks who will be able to participate.”
Still, the union has sent program information to its members, and union brass met with Landed before the program was announced in April.
“I think that stuff’s good Band-Aid stuff to talk about in the meantime, but the fact of the matter is folks work hard to become teachers and care a lot about people’s children, and they should be paid with respect,” Kern said.
Dy, 35, a special education teacher in the Sequoia Union school district in Redwood City, Calif., about 30 miles south of San Francisco, and her partner, Jen, 34, a police officer, used Landed to come up with the down payment to buy their $975,000 townhouse in San Francisco’s Mission District. (Their surnames are being withheld to protect the home security of the police officer.)
With an annual income of about $200,000, the two still had trouble coming up with the down payment for a home in a city flush with Silicon Valley cash and where the median home price in March was $980,000.
“We needed a down payment,” Dy said. “We have great credit; we are super-responsible; we have secure jobs; we have secure incomes. ... We were great on paper for all of that. We almost have zero debt.”
The couple, who now has two children, had tried other affordable-housing programs the city offered, but either fell out of the income brackets as their salaries increased or got stuck in red tape.
Until they heard about Landed, they had been resigned to staying in their $2,300 per-month one-bedroom rental—with two kids, a dog, and a cat—"until the walls [were] falling off,” they said.
Even with the agreement that they must pay back the company 25 percent of the appreciation on the value of their home if they sell it, the couple said it’s a worthy investment. The money will be used to help other civil servants live where they work, they said.
“We just needed to get into the game,” Dy said. “We had no access to this game that creates wealth in this country. The system is just very inequitable to people who don’t come from money or have money to invest in real estate. We thought of this as investing in ourselves.”
