Is workforce housing right for your district?

By Property Planning Solutions by DCG Strategies

School districts have always sought to recruit and retain the best and brightest to educate our children. But over the past few decades, there has been a steady and alarming increase in high-quality teacher shortages across the state.

Not only has the supply of new teachers diminished, but teacher attrition is also on the rise, prompting many districts and their supporting policymakers to rethink what they can do to attract and keep strong teachers.

One area that could help teacher recruitment and retention is affordable housing. Today, an average California home costs nearly two times the average national home price of $416,000 — and well above what teachers can afford. In some areas, homeowners are spending more than half of their income on housing, far exceeding the standard 30-percent threshold recommended by financial experts. Renting isn’t the solution, either. As of September 2023, the median rent for all bedrooms and all property types in California was $2,850, which is 41 percent higher than the national median.

Although there isn’t a simple solution, educators, school district administrators and policymakers are working together to develop strategies to create affordable housing options for teachers so California’s educators stay in California.

How can your district know whether it is well-suited to develop and provide rental housing to your employees?

Here are four key areas to consider when exploring workforce housing in your organization:

1. Board of education goals and priorities

  • Seeing a successful real estate development process through to completion requires strong champions who can maintain the focus and momentum throughout a project’s long timeline. To do this, it is critical to have district leadership that is aligned and committed to exploring workforce housing development.

2. Demand for workforce housing

  • Do you expect your employees to continue to have difficulty obtaining affordable housing in your community over the next 20 to 40 years? When teachers can afford to live closer to their jobs, the entire community reaps the rewards. Commute times and traffic congestion ease, neighborhoods are more diverse, local economies are strengthened by helping employers attract and retain essential workers, and families can establish roots and become invested in their community, living and growing in one place over time.
  • Workforce housing targets middle- or low-income families — those who make between 60 and 120 percent of the area median income in higher-cost metropolitan areas, such as San Francisco. Currently, most affordable housing programs are focused on low- and very low-income earners. Middle-income earners, such as teachers and school administrators, don’t always qualify for these programs.
  • Before proceeding with the development of workforce housing, it’s important to gauge demand amongst staff for district-provided rental housing. This is foundational to development planning and can also help to shape key criteria in relation to the proposed project.

3. Surplus property or underutilized real estate

  • By using surplus land or other underutilized real estate, housing units can be built to address the essential workforce housing needs of teachers and other employees in your district. While some school districts may decide to purchase land for housing development, it is helpful to own an underutilized site with or without an existing structure, that will not be needed in the future, and is physically and geographically well-suited for housing development.
  • Properties that are ideal for developing workforce housing have:
  • Size: Typically three to seven acres of land available (however, smaller sites can work)
  • Access: Easy access to transit and public utilities
  • Neighborhood context: Near a residential development of medium- to high-density homes such as townhomes or apartments
  • Use: The site is vacant or not used for education purposes

4. Funding and resources

  • One of the key questions districts ask in regard to employee housing is, “how do we pay for it?” While there are many funding mechanisms potentially available, determining the best funding source is critical. Below are examples of financing opportunities available to districts to fund construction and development of employee housing.
    • Certificates of Participation
    • General Obligation Bond Funds
    • Conventional debt
    • Tax credit financing
    • Local government

To learn more about this complicated topic, here is an article about best practices for financing education workforce housing.

If your district is interested in learning more about affordable housing development, please reach out to Property Planning Solutions and schedule a free one-hour consultation with our real estate partners, DCG Strategies.

For more information, please contact:

 Nicole Delos Reyes

CSBA Program Manager