Photo: SVA Architects
Rendering of Jefferson Union High School District faculty and staff housing.

In a region with the largest disparity between teacher pay and housing costs in California, a Bay Area school district is the first in the nation to build affordable employee housing funded exclusively through a bond passed by local taxpayers.

The Jefferson Union High School District in Daly City recently broke ground on the 122-unit housing project, which will be financed by a $33 million general obligation bond passed by voters in 2018. 

At the time, the move by the school district was unprecedented. But on March 3 four more school districts — Soledad Unified in Monterey County, East Side Union High School District in Santa Clara County, Patterson Joint Unified School District in Stanislaus County and Chula Vista Elementary School District in San Diego County — will follow Jefferson Union’s lead and ask California voters to tax themselves to pay for teacher housing through a general obligation bond.

School boards across the state are considering building housing for teachers and other school employees who are struggling to pay for housing in an increasingly expensive state. They see housing as a way to give their district a competitive edge when vying for and retaining teachers during California’s ongoing teacher shortage.

The shortage of teachers has particularly impacted schools in rural and low-income areas. Schools throughout the state have struggled to find teachers for high-needs subjects like science, math, bilingual education and special education. The result has been a record number of teachers in classrooms who have not completed teacher preparation programs or have received only partial training.

General obligation bonds are issued by school districts and community colleges to finance construction costs. They require approval by 55 percent of voters. Because taxpayers pay for the project, school districts don’t have to use district funds and can, in fact, generate revenue from rents that can be used for whatever the school board decides.

“If they are going to do the housing, if they can make the rent reasonable and still make a profit for the school district I think that is win-win,” said Sarah Chaffin, executive director and founder of Support Teacher Housing.org, which advocates for affordable teacher housing in the Bay Area. 

East Side Union High School District

The East Side Union High School District would use its $60 million general obligation bond to build a 100-unit apartment complex for teachers and staff that will offer affordable rents while generating revenue to boost the district’s general fund, said Superintendent Chris Funk. The district expects to make at least $1 million a year of revenue each of the first seven years and more than $3 million every year after that, he said.

This income could help the district — which has lost state funds because of declining student enrollment — through a fiscal crisis that is expected to result in layoffs, Funk said. Once the district is operating without a deficit the school board could opt to further lower rents or offer down payment assistance to employees, Funk said. 

East Side Union High School District would build its employee housing on 4.5 acres of district property, adjacent to the district’s main office in San Jose. 

Rents are expected to be 30 percent below market rates. That could help teachers, who on average make $88,797 and spend 34 percent of their salary for a two-bedroom apartment, according to an analysis of 2017-18 teacher salaries and rents by Ed Source. Beginning teachers spent more than half of their salary on rent, according to the analysis.

Affording rent is even more difficult for classified staff, such as janitors, bus drivers and clerks, who have an average starting salary of $44,000 a year. Employees of the 26,500-student district will be able to live at the complex for up to seven years, Funk said. 

“We know that when you have quality schools then the property value of your home goes up and if you have employees who live in your community and they can devote more time to building relationships with kids that improves schools also,” Funk said.

Measure J would cost homeowners about $2.70 per $100,000 of assessed value of their property annually.

Soledad Unified School District

Soledad Unified School District’s Measure E would authorize $11.5 million in general obligation bonds to build housing for teachers and staff in Soledad in Monterey County. 

Superintendent Timothy Vanoli said district leaders have not decided how many apartments would be built, how tenants will be selected and the cost of rents.

“We will figure it out,” he said. “Once this passes we will dive into the details.”

Although housing in Soledad is less expensive than the Bay Area — with the median home price at just under $400,000 — it is still too costly for new teachers to buy a home. Instead, many of the district’s teachers compete for scarce rental housing and end up commuting long distances, Vanoli said.

Currently the 5,000-student district has 19 teachers on emergency-style intern permits because it can’t fill all of its classrooms with fully credentialed teachers, Vanoli said.

 “The critical shortage of affordable housing puts us at a disadvantage when hiring and retaining teachers and staff,” he said. 

The bonds would cost taxpayers $30 for every $100,000 of assessed property value each year. 

Patterson Joint Unified School District

Last October the school board of Patterson Joint Unified School District, in rural Stanislaus County, voted to put a $32.5 million general obligation bond on the ballot to build employee housing. The district has 6,000 students.

The 35 to 45 apartments and townhomes would be rented to teachers and other school staff at below-market rates. The goal is to set aside a portion of each month’s rent to help the tenant save for a down payment on a home, said Philip Alfano, district superintendent.

Patterson, which has a population of about 23,000, is located east of the Bay Area in the Central Valley. It has seen the cost of residential housing rise in recent years as a stream of new residents from the Bay Area seek affordable homes within commuting distance. Companies, attracted by the large tracts of land and proximity to Interstate 5, have been moving their warehouses and distribution centers to town.

Rental housing also has become scarce and more expensive, causing many district employees to commute nearly 40 minutes from nearby towns like Modesto, Turlock and Ceres. Sixty percent of teachers and staff commute from outside the community, Alfano said.

Inevitably these teachers find jobs in the communities they live in and leave the school district, Alfano said. The district then has to scramble to fill positions, sometimes hiring up to 10 teachers with intern credentials each year to fill teaching positions. 

“I believe it is very important for a community like ours,” Alfano said of the ballot measure. “The teacher shortage is a critical one. I don’t know if everybody sees it, because sometimes we manage to fill the positions. I don’t see it getting any better but it is exacerbated when you are in a rural community like ours. We have to do something different.”

Measure N would cost homeowners $40 per $100,000 of their assessed property each year, according to ballot information. The funds will be used exclusively to provide employee housing, although expected excess income from rents could be used to supplement the district budget, Alfano said.

Chula Vista Elementary School District

The Chula Vista Elementary School District, located near the U.S.-Mexico border in southern San Diego County, has included teacher housing as part of a $300 million measure on the March 3 ballot. 

San Diego County, one of the fastest growing regions in the state, has a shortage of affordable housing. Some school employees choose to live in neighboring Tijuana, Mexico, where rents are much lower, while other employees commute from suburbs surrounding the district, said Anthony Millican, communications director for the district. About 38 percent of the staff commute 20 to 40 minutes to work, he said.

If passed, Measure M will pay for technology improvements at schools, enhance campus safety, modernize classrooms, update heating and air conditioning systems and improve playgrounds and playing fields, as well as finance construction of staff housing, according to the ballot measure. 

The district would spend $65 million to build 100 apartment units of housing that school employees can rent at 70 to 80 percent of market rates. District officials are considering under-enrolled schools and the district headquarters as potential sites to convert to staff housing. 

Beginning teacher salaries in the Chula Vista Elementary district start at about $52,000 a year, according to the district website. Rents for a two-bedroom apartment in the area average about $2,000 a month, Millican said.

“One hundred units could be the difference between someone considering a job here in Chula Vista versus, say, Arizona or elsewhere in the state or in another state that is typically more affordable,” Millican said.

Over 30 years the housing complex would generate about $37.8 million to supplement the school district general fund, Millican said.

The bonds would cost taxpayers $30 for every $100,000 of their assessed property each year.

There are five or six other districts in the state currently considering bonds to build employee housing for future ballots, said Dale Scott of Dale Scott and Company, a financial advisory firm that has worked with school districts to fund affordable housing.

There are numerous reasons that districts opt to build employee housing, Scott said. “It certainly is an issue of becoming and remaining competitive and attracting and retaining staff, but it’s also about retaining longtime employees that have been there and are being pushed out.”

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  1. Richard Michael 909-378-5401 7 months ago7 months ago

    Proposition 39 bonds can only be used for the construction or acquisition of "school facilities." All four workforce housing measures, illegally attempting to use Proposition 39 bond proceeds, are failing. The East Side Union High measure is close enough that it might pass. If it passes, don't be surprised if the election is challenged in an election contest for offenses against the elective franchise. Why didn't Lambert get a legal opinion? Using public moneys for purposes not authorized … Read More

    Proposition 39 bonds can only be used for the construction or acquisition of “school facilities.”

    All four workforce housing measures, illegally attempting to use Proposition 39 bond proceeds, are failing. The East Side Union High measure is close enough that it might pass. If it passes, don’t be surprised if the election is challenged in an election contest for offenses against the elective franchise.

    Why didn’t Lambert get a legal opinion?

    Using public moneys for purposes not authorized by law is a felony (Penal Code 424(a)(2)).

    Mr. Scott is just pushing the envelope to see what he can get away with. It’s a whole new way to bilk taxpayers while enriching himself, the school administrators, and the contractors who gouge taxpayers.

    The San Francisco Controller, in the voter information guides, describes general obligation bonds. They can’t be used to generate revenue. “General Obligation Bonds are used to pay for projects that benefit citizens but do not raise revenue (for example, police stations or parks are not set up to pay for themselves).” He doesn’t site the specific law. He also describes revenue bonds: “Revenue Bonds are used to pay for projects such as major improvements to an airport, water system, garage or other large facilities which generate revenue.”

    Mr. Scott only cares about his pocketbook. He hasn’t gotten any legal opinion from anyone to support his scheme.

    Just because Jefferson Union High got away with it, doesn’t make it legal. The official statement that offered its bonds for sale didn’t describe what the proceeds would be used for. The IRS, the SEC, the DOJ, the county treasurer, and the county district attorney might not look on the scheme the same way as Scott.

  2. J. Owen L. 7 months ago7 months ago

    This seems like a really heavy-handed effort, made on the backs of working people who are already struggling to pay their taxes. There are currently more vacant apartments and houses, in the Bay Area at least, than there are homeless or inadequately housed individuals. If we prevent wealthy realty speculators from buying up properties and keeping them vacant to drive up the prices, then prices would go down and a huge amount of housing would be … Read More

    This seems like a really heavy-handed effort, made on the backs of working people who are already struggling to pay their taxes.

    There are currently more vacant apartments and houses, in the Bay Area at least, than there are homeless or inadequately housed individuals. If we prevent wealthy realty speculators from buying up properties and keeping them vacant to drive up the prices, then prices would go down and a huge amount of housing would be available. We don’t need any more housing when we already have so many vacant homes. And what happens when the district has to lay people off? Are they going to lose their jobs and their housing along with it? Seems like school districts would be able to prevent strikes and lower teacher pay because they’re getting the “benefit” of affordable housing.

  3. SD Parent 7 months ago7 months ago

    It is shocking to me that it is legal for school districts to "launder" school bond funds into general operating funds through the loophole of building housing for district staff. In essence, the school district gets the equivalent of a parcel tax with the lower voting threshold of a school bond. School districts consider bond funds "free" money and clearly relish the idea of turning school district land into cash cows for the … Read More

    It is shocking to me that it is legal for school districts to “launder” school bond funds into general operating funds through the loophole of building housing for district staff. In essence, the school district gets the equivalent of a parcel tax with the lower voting threshold of a school bond.

    School districts consider bond funds “free” money and clearly relish the idea of turning school district land into cash cows for the district—and apparently care little for the students who would be displaced when closing a neighborhood school to do it. Meanwhile, property owners are on the hook to pay back the bond funds with interest (at nearly twice the price) so that the district can take the profits from rental income to use it for whatever purpose they want.

    This loophole should be closed. Any revenue generated from building housing–or any other “revenue-generating project”–using school bond funds should either be used to pay back the bonds or be restricted to capital improvements of school sites.

  4. Keith 7 months ago7 months ago

    Soledad? How does a small town with two exits and maximum security prison in a rural area next to nowhere have a high cost of living. Same with Patterson, an extremely poor town in the middle of nowhere on 5?