Author: Steve Zurier
A school district’s rental unit proves to be the path to homeownership for a California teacher.
Some people have all the luck and Katherine Nissen, 30, a teacher who manages the support program for elementary school teachers in the Santa Clara, Calif., Unified School District, has had more then her share.
Nissen’s first break came about six years ago when she won a lottery to be among the first group to reside in Casa del Maestro, or House of the Teacher, a 40-unit apartment complex set aside for the district’s teachers. The units were built by Thompson Dorfman Partners, which plans to build another 30 apartments to meet demand in the next year.
“This is such a nice thing to do for teachers,” Nissen says. “The cost of living is so high in Silicon Valley, and it’s especially tough for teachers because most of us aren’t making that much money in the first place,” she adds.
The school district dedicated two acres of school-owned property for the project. The district purchased $6 million of certificates of participation notes – similar to revenue bonds – and pays the note back with the rents from the teachers. The rents are kept well below market rate – the district uses them mainly to cover its costs and pay back the notes.
Teachers are allowed to live in the apartments for five years. Nissen lived in the complex with a roommate only one year and says the $700 a month rent allowed her to save roughly $500 a month. The $6,000 she saved, plus the money saved by her husband, Carlos, and a homeownership subsidy of $500 a month for five years that Intel offers teachers struggling to afford a home in pricey Silicon Valley amounted to enough to purchase a new $440,000 townhome. Home buyers who use the Intel money have to pay back the $30,000 subsidy after five years, and Nissen says she will probably pay the money back with a home equity line.
The house is in Rivermark, a master planned community built by Centex, Lennar, and Shea Homes, located about five minutes from Nissen’s work. The best part: Nissen’s townhome is now worth in excess of $700,000, which gives Nissen and her husband financial flexibility they never thought possible.