Terner Center Blog: No Limits

School District Employee Housing in California

Posted on by Sean Doocy

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center.

This piece is the third in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here.

Housing costs in California have risen dramatically in recent years, particularly in employment-rich coastal urban centers like the Bay Area, yet wages for public school teachers and other school district employees have remained stagnant. The average teacher’s purchasing power in the for-sale and rental housing market has declined significantly in the past two decades, and especially in the past five years. This is a key factor driving high teacher turnover and teacher shortages in districts throughout California. In response, school districts have pursued and adopted a host of strategies to recruit and retain teachers and staff, with employee housing assistance recently emerging as the most prominent approach.

My report on school district employee housing in California details the current landscape for this emerging strategy, outlining how district housing can improve employee recruitment and retention. It offers insights from a study of Berkeley Unified School District’s (BUSD) proposal to initiate a below market rate rental housing program for employees.

Housing incentive programs for school district employees fall into one of two categories: financial assistance for housing (e.g., down payment assistance, closing costs) or direct provision of employee housing (typically through new development of rental housing). Many states and cities across the country provide the former, with down payment assistance programs specifically targeting teachers. San Francisco and San Jose have programs of this sort. The San Francisco-based startup Landed also offers an innovative alternative approach to homeownership assistance for educators, leveraging private capital through a shared equity model to provide down payment assistance for educators looking to purchase a home.

Completed School District Employee Housing Projects

Photo Credits: Teachers Village: Scott Frances, Paul Rivera; Sage Park: Nico Marques

Homeownership assistance can play a crucial role for educators who might not otherwise be able to purchase in their district. Meanwhile, many more teachers and school district staff are not on a near-term path to homeownership, and are simply struggling to afford rising rents in or close to the cities where they work. This has precipitated a recent rise in the direct provision of below-market-rate rental housing for school district employees. Such projects are either driven by private developers—such as RBH Group’s high-profile, recently-completed Teachers Village in Newark, New Jersey—or by districts themselves. In either case, the developer or the district will typically subsidize rents, offering units at a fixed percentage below market rate with the depth of the subsidy varying depending on the project. District-driven housing has become the preferred model in California, where districts are responding to the housing affordability crisis and high teacher turnover by partnering with developers to build below-market-rate employee housing, usually on surplus district property.

Recent California legislation from 2016 (SB-1413) and 2017 (AB-1157) has helped incentivize the production of district-owned employee housing. While a few district-driven housing projects had previously been completed (notably by Santa Clara Unified School District and Los Angeles Unified School District), in the wake of these recent bills, high-profile districts from San Francisco to Palo Alto to Mountain View have begun to seriously explore the option of developing employee housing on the underutilized properties in their portfolio.

Berkeley Unified School District is one such district. I worked with BUSD to conduct a study of their employees’ current housing situations and needs, along with their potential interest in housing of this type. Leveraging a survey that we designed and administered, as well as an internal employee data set, my analysis shows that many BUSD employees need assistance with rental housing and that employees have a significant interest in the prospect of living in district-owned affordable rental housing. Specifically, I identify the following key takeaways:

  • 78% of BUSD renter employees are experiencing financial pressures due to high housing costs
  • Only 30% of BUSD employees live in Berkeley, and their travel to work compounds the pressure they are experiencing from their housing situation
  • Housing costs and commute may both impact employee retention—69% of renters think the high cost of housing negatively impacts their long-term ability to stay at BUSD
  • 74% of current renters would be interested in living in BUSD-owned employee housing

Drawing on this BUSD study and my broader review of this emerging housing solution, I offer a series of recommendations in my report for other districts interested in financing, developing, and implementing their own employee housing programs. Perhaps most importantly, I urge districts, developers, and nonprofit partners to get creative with their financing. Housing for school district employees is not traditional affordable housing, and as such cannot be financed through conventional means like the Low-Income Housing Tax Credit (LIHTC). A successful district housing project must target both middle-income teachers (typically making 80-120% of Area Median Income) and lower-income district staff (making less than 60% of AMI). LIHTC income restrictions mean it is not a flexible enough funding source for these projects on its own. It’s time to think outside the box.

School district employee housing is poised to rise in prominence in California as the housing affordability crisis worsens and districts seek new and more effective ways to recruit and retain employees. Many of these projects are just getting off the ground, but the early results are promising: three years after Santa Clara Unified School District completed an employee housing project, turnover for teachers living in those units had fallen to 8%, compared to 24% teacher turnover for the district overall. As new districts enter the fray with their own proposed programs, it is critically important that they understand the current school district employee housing landscape and know how to engage with and learn from their employees. This report provides a starting point for both.


Mapping Oakland’s Vacant Parcels

Posted on by Hayley Raetz

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the second in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. Vacant Parcels in Oakland Despite Oakland's high demand for housing, vacant parcels remain abundant…


Measuring the Housing Permitting Process in San Francisco

Posted on by Brian Goggin

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the first in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. How long does it take to get a building permit in the Bay Area? Ask 10 developers, you will likely get…


Aligning Sustainable and Affordable Development in California

Posted on by Sarah Mawhorter and Carol Galante

California has long been considered a leader in combating climate change, but the state’s housing crisis—with inadequate supply in urban cores and a legacy of sprawling suburban development—threatens its ability to achieve its greenhouse gas emission reduction goals The Sustainable Communities and Climate Protection Act (Senate Bill 375) aligns land use and transportation planning in order to drive development in transit-accessible places and reduce car dependency and vehicle emissions. SB 375 resulted directly from the goals laid out in the Global Warming Solutions Act of 2006 (Assembly Bill 32) and was signed into law in 2008. SB 375 requires California…


Highlights from the James R. Boyce Affordable Housing Competition Studio Symposium

Posted on by Carol Galante

As the number of individuals and families experiencing homelessness remains at troubling heights, particularly in high-cost regions, planners, architects, and developers are working to confront the crisis with innovative design, financing, and construction methods. Through the James R. Boyce Affordable Housing Studio course—generously funded by a gift from CED alumni James R. Boyce (M. Arch. ‘67) and co-taught by David Baker and Daniel Simons of David Baker Architects—Carol Galante, Faculty Director of the Terner Center and the I. Donald Terner Distinguished Professor of Affordable Housing and Urban Policy in the College of Environmental Design, connects students from a variety of…


Why We Need a New Conversation on Rent Control in California, Today.

Posted on by Carol Galante

Leaders seeking to address California’s housing crisis are facing an important challenge: how to take meaningful and significant policy action to “stop the bleeding” of rising costs, eviction and displacement without generating new challenges that will only prolong the state’s deep affordability challenges. Today’s debate over rent control, and particularly, the movement to repeal Costa-Hawkins Rental Housing Act (which places statewide limits on how jurisdictions implement rent control), has pushed this challenge to the fore. One side of the debate is working to qualify a measure on the November ballot that would fully repeal Costa-Hawkins, enabling localities to expand rent…


A ‘Safe Haven’: Resident Stories Convey the Benefits of Affordable Housing

The Low-Income Housing Tax Credit (LIHTC) has become the most important funding source for affordable housing development in the United States, producing nearly 3 million housing units since its inception in 1986 and housing over 13 million people. Despite its significance in the housing market, relatively little research has been undertaken to document and understand the experiences of residents living in LIHTC-funded properties. Today, the Terner Center is releasing a new study addressing this research gap. Our analysis sheds light on how living in LIHTC properties impacts low-income residents, particularly with regard to housing stability, economic mobility, and access to…


Renting the Dream: The Rise of Single-Family Rentals

Posted on by Carolina Reid, Carol Galante, Rocio Sanchez-Moyano

Tenants living in single-family homes in the United States represent the fastest growing segment in the housing market today, but neither academic literature nor public policy has kept pace with their growing importance. Today, the Terner Center is releasing a new study seeking to better understand this group of renters, the homes and neighborhoods they occupy, and the policies that might better support their success. Our study presents data on single-family renters living in a range of housing markets across the country. Our first question: why has this market segment grown so fast? In short: a boom in single-family home…


It All Adds Up: The Cost of Housing Development Fees in Seven California Cities

Posted on by Sarah Mawhorter and David Garcia

In the summer of 2017, the Terner Center embarked on a seemingly straightforward task: determine the amount and type of fees levied on new residential development in seven California cities. What was initially thought to be a clear assignment turned into an odyssey of combing through difficult-to-obtain fee schedules, cobbling together piecemeal information across city departments, and repeatedly interviewing various city planning officials. The onerous and lengthy process our research team faced tells the story of the development fee process in California. While fees act as an important tool to mitigate the effects of new construction, the development and administration…


Perspectives: Practitioners Weigh in on Rising Housing Construction Costs in San Francisco

Posted on by Carolina Reid and Hayley Raetz

It is no secret that producing new housing in California is an expensive endeavor. Our Cost of Building Housing Research Series recently launched with the goal of understanding why this is the case, breaking down the elements of the housing development process to identify key cost drivers and potential private and public sector solutions. Today we are releasing our first brief of the series, which examines rising housing construction costs in San Francisco from the perspective of non-profit and market-rate housing developers, architects, and other practitioners on the ground. The brief shares findings from a series of interviews and focus…