Thompson/Dorfman Partners LLC of Sausalito, Calif., is developing a modest 44-unit apartment complex on 2.6 acres on the campus of San Mateo Community College in San Mateo, Calif., a suburb about 20 miles south of San Francisco, for faculty and staff. Once the development is completed next September, the San Mateo County Community College District, which operates three community-college campuses, will manage and lease the complex to its faculty and staff at below-market rates.

Offering one-, two- and three-bedroom units for $800 to $1,400 a month, or about half of what comparable units rent for, will not only "help retain employees, but we think it will help attract faculty," as a good chunk of the current faculty is expected to retire over the next several years, says Barbara Christensen, director of government relations for the San Mateo Community College District. "If we can offer a faculty position and housing, it's that much of better of a deal" for recruiting candidates.

During the dot-com boom of the late 1990s, calls to offer housing assistance to teachers, police officers, fire fighters and others, who were priced out of the for-sale and rental residential markets, reached a fevered pitch as efforts to attract and retain those workers in high-priced areas became difficult. Most of the efforts that emerged involved providing mortgage assistance to such workers. Only a few employers took the step of developing housing for their workers.

San Mateo Community College District was one of them. For the district, bringing in Thompson/Dorfman Partners to develop the $8 million College Vista Apartments was the least costly means of retaining and attracting faculty and staff.

Even with the dot-com bust, the district continued to have a problem retaining employees, says Ms. Christensen. "In 2001, it really reached a peak."

The district was losing 14% of its staff and faculty of about 1,400 every year. After conducting a survey of its employees, the district found that 18% of those who responded to the survey said they planned to leave the district during the next three years. Of those, 58% said it was because housing in the area was unaffordable.

"They could get jobs somewhere else where they could afford to buy a house," says Ms. Christensen. "We looked at what we could do in terms of paying higher salaries to help them overcome the housing issue. But to afford the median-priced home, we needed to pay employees $150,000 a year. We can't afford to pay that."

Instead, faculty and staff will be eligible to rent a unit at College Vista for up to five years. Priority will be given to full-time faculty and staff who have never owned a home, although employees who have sold a home as a result of a divorce may qualify, says Ms. Christensen. She says preference will be given to those employees who earn 120% of the median income for the area or less. That's because at about the same time the district began considering the College Vista development, it implemented a mortgage-assistance program for faculty and staff. In order to be eligible for that program, applicants must fall within the same income range.

The hope is that district employees "can save money and get their credit in order, and then we can can get them into our homeownership mortgage program," she says.

Ms. Christensen says the district plans on awarding the units through a lottery. Already, about 100 people have put their names on a waiting list. Given the response, the district is considering developing additional apartment complexes at its two other college campuses, she says.

Although the units will be rented out at below-market rates, College Vista will offer many of the same amenities and features as a market-rate apartment complex, says Bruce Dorfman, a principal at Thompson/Dorfman Partners. College Vista will "blend into the surroundings" with its Craftsman-style design, says Mr. Dorfman. All the units will have private entries and patios or balconies, while 39 of the units will have attached garages. The complex will also have a recreation building with a kitchen, fireplace, a big-screen television and a view of the San Francisco Bay.

"Working with school districts is a good thing, because the city likes to try to dig in and help," says Mr. Dorfman. "We've gotten concessions on fees and help from the city to accelerate the approval." Ms. Christensen says state law prevents one public agency from charging another agency fees, such as planning and development fees, so the College Vista project avoided about $400,000 in charges.

Thompson/Dorfman Partners developed a similar residential project a few years ago for the Santa Clara Unified School District in the heart of the Silicon Valley, where the teacher turnover rate skyrocketed to 300% over a five-year period as teachers were priced out of the housing market. Like the Santa Clara project, Thompson/Dorfman Partners is developing the San Mateo project at cost for the district. And once the project is completed, the keys to the complex will be handed over to the district.

"This is a giveback to this community," says Mr. Dorfman, hoping that the decision to develop College Vista at cost will work to the firm's advantage when it embarks on for-profit development projects in the area. "We feel supporting this community is important for our housing projects as a whole," he says. So far, though, Thompson/Dorfman Partners doesn't have any market-rate residential projects in the works in either San Mateo or Santa Clara. But, he says: "We're looking hard" for opportunities.

-- Ms. Muto is a national real-estate writer for The Wall Street Journal. Her "Bricks & Mortar" column appears most Wednesdays exclusively on RealEstateJournal. She is based in the Journal's San Francisco bureau.