District Considers Public Housing for Teachers
We were driving up the coastal area of hilly San Mateo County, just north of Silicon Valley, when we saw something ahead on the shoulder of the road. When we got a little closer, we saw it was a middle-aged man wearing a tweed jacket with elbow patches. He was holding up a sign: "WILL TEACH SCHOOL FOR HOUSING."
While this story is fictitious, the need for affordable housing for teachers in the Bay Area is very real. Several school boards, including those in San Francisco, San Jose and Milpitas, have studied the idea of building subsidized housing for teachers who cannot otherwise afford to live in the area. And in December, the tiny La Honda-Pescadero Unified School District in San Mateo County went further, by entering into an agreement with Mid-Peninsula Housing Coalition, a Redwood City-based non-profit home builder. The district and non-profit agency plan to construct between 15 and 45 units of subsidized housing on vacant district land adjacent to Pescadero High School in Pescadero, a small, unincorporated community.
The agenda for La Honda-Pescadero is clear: teachers simply cannot afford, or even find, housing in or near this semi-rural community. Housing is expensive in San Mateo County, which lies just north of Silicon Valley. The median home price of a single-family home was $605,000 in the fourth quarter of last year, according to the San Mateo Board of Realtors. Prefer to rent at those prices? A two-bedroom apartment in the area, if you can find one, goes for an average of $1,851 monthly, according to the Palo Alto office of Marcus & Millichap.
Scarcity is an even more pressing problem than high rent in the coastal area of San Mateo County. Apartments are thin on the ground to begin with, and apartment vacancies are currently 2%. Many of the district's 35 teachers are living in a variety of less-than-perfect circumstances, including converted garages and rented rooms in private houses. One district official told the San Jose Mercury News that some teachers have quit the same day they were hired because of their inability to find housing. As a result, the district is rarely able to hold onto teachers for more than three or four years.
The small district does not make matters easier by paying some of the lowest starting salaries in the region. A fully credentialed teacher starts at about $28,600, compared to starting salaries of about $34,000 in the rest of the Bay Area, according to school district Superintendent Bonnie McClung.
The proposed subsidized housing for teachers, however, could translate into something akin to a generous housing allowance that would make those paltry salaries look far more attractive. Although the project is still in the talking stages and rents are yet to be decided, subsidized two-bedroom units in the Bay Area typically run about $950 a month, according to Richard Ridenour, communications director for Mid-Peninsula Housing Coalition. With that number, we can do a seat-of-the-pants pro forma of the potential value of the subsidized housing to renters. Subtracting the subsidized rent ($950) from the market rate ($1851) leaves us a subsidy value of $900 monthly, or $10,800 yearly. All of a sudden, those La Honda-Pescadero salaries start looking a lot more attractive.
As desirable as this deal sounds on paper (to me, at least) it is conceivable that not every teacher would have a low enough income to qualify for the subsidized housing. As I mentioned above, rents are not yet available for the San Mateo County units, although we might get a rough idea of the income ranges that might qualify for subsidized housing in the South Bay, based on HUD definitions of low- and moderate-income. Low income is defined as being 50-to-60% of the median income in a particular area. In San Jose (which is probably somewhat higher than San Mateo County) 50% of the median income equals about $34,800 for a single-earner household, or $39,500 for a family of three with two breadwinners; these folks qualify for a two-bedroom apartment that rents for $925. Teachers who earn 60 percent of the median income ($41,760 for single-earner households or $46,980 for a three-person, two-breadwinner households) can rent a two-bedroom apartment at $1,120 monthly. Moderate-income is defined as starting at 80% of median income; in San Jose, that is $55,680 for single-earners and $62,640 for two-income households; those salaries qualify teachers for a unit at $1,525 monthly.
In short, those income qualifications may work for teachers who are both single and receiving salaries on the lower end of the pay scale. Those qualifications, however, may not work for married couples (unless teachers are married to freelance planning journalists). Teachers with seniority, who earn $60,000 and more, would not qualify.
Public policy problems remain to be solved. Ridenour hinted that the nonprofit may not be entirely comfortable with a teachers-only building, and it wants to include other public employees, such as fire fighters. Despite problems, I think this is a good deal all around: for the district, the teachers, the community.
I was originally intending on concluding this story with a prediction that major Silicon Valley employers would soon follow the example of La Honda-Pescadero, by purchasing or renting units for entry- and mid-level personnel. As is often the case, however, my light bulb flashed on long after someone else had the idea. Redwood City-based Oracle Corporation, one of the largest employers in the region, is reportedly planning to purchase about 300 apartment units in Foster City and Redwood Shores, which are among the few communities in the area where large-scale home building is taking place. I think it's a great idea, even if I doubt Oracle can buy enough units at this late date to make a big difference to its rapidly growing workforce of more than 10,000 people.
Nonetheless, Oracle's home buying spree is eloquent testimony that business, as well as education, needs housing at all income levels. Maybe some non-profits should stand by the side of Highway 101, holding signs that say, "WILL PROTECT CALIFORNIA ECONOMY FOR HOUSING." I bet they would get some takers.