Publication: New York Times, National Perspectives
Author: Lisa Chamberlain
Date: Dec. 19, 2005

Santa Clara, Calif. AIMEE BRINKS, a teacher in her late 20’s, lives by herself in a two-bedroom, two-bath apartment with a private garage and patio in the heart of Silicon Valley, one of the nation’s most expensive housing markets.

She is the beneficiary of an innovative solution to the high cost of housing in the Bay Area, which forces many teachers to commute several hours a day or live nearby in cramped conditions or dangerous neighborhoods. Because of Santa Clara’s determination to deal with the housing problem, she pays about 40 percent of what such a place would command in the open market.

During the dot-com bubble years, the housing crisis in Santa Clara – home to some of the biggest names in the high-tech industry, like Intel and Yahoo – became acute. The school district was losing teachers about as fast as they could be hired. Just when they were trained, they would leave for other districts where they could live more comfortably and closer to their jobs. And even after the tech bubble burst, housing prices never really came down. The median price is $714,250.

“It became a big issue in the Valley,” said Paul Perotti, the recently retired superintendent of the Santa Clara Unified School District. “School boards were talking about it, politicians were talking about it, but no one was doing anything. So I said, ‘Let’s either do something or stop talking about it.’ ”

The school board gave Mr. Perotti permission to hire the developer Thompson/ Dorfman Partners, which built an upscale apartment complex in the area. Using land that the school district owned and agreeing to a small development fee and no profit margin, Thompson/Dorfman built 40 apartments for around $6 million. The complex would have cost more than $12 million with normal land costs and profit margins, the company said. “In the development business, it’s always a struggle,” said William W. Thompson, a partner in Thompson/Dorfman, whose daughter is an elementary school teacher in Napa Valley. “After we made our presentation to the Santa Clara review board, we were applauded.” Ms. Brinks, hired in 1999, was one of the first teachers to move into the complex when it opened in 2002. She had already moved four times in three years, taking temporary sublets or paying more than she could afford for conditions that were less than desirable. One apartment had four people in a three-bedroom. Another place went to $1,900 a month from $900 overnight. Now she pays $1,075 in rent, well below the market rate of about $3,000 a month for a similar apartment in the area, and it takes her three minutes to drive to work. There are 28 people on a waiting list for the apartments.

“Before the apartment became an option, it was impossible to get settled,” said Ms. Brinks, who teaches first grade. “Now I love it here. The way the complex is designed, you can have privacy or you can socialize with the other teachers. And I can walk to the grocery store.”

The housing is helping retain teachers. According to the district, new recruits in general had a 24 percent turnover, but teachers who moved into the apartment complex had only an 8 percent attrition rate.

To avoid the company-town syndrome, where the property owner is also the employer, the school district set up a separate foundation to manage the property and handle potentially sticky situations, such as one teacher complaining to the school district about another teacher’s living habits.

There is a five-year limit in the complex, so teachers are encouraged to save money to buy their own homes. To help with that, the Santa Clara school district teamed up with Intel to offer a mortgage-assistance program, offering five-year interest-free secondary mortgage loans with monthly payments of up to $500.

The school district’s only regret is that more apartments weren’t initially planned, although Thompson/Dorfman is negotiating with the district to build 20 more units on a plot just behind the original complex.

“It’s been wildly successful,” Mr. Perotti said. “You need three things – the land to build on, a willingness to borrow the money, and a passion for getting it done.”

The Santa Clara solution has inspired others. Barbara Christensen, the head of community and government affairs at San Mateo Community College, undertook a teacher-housing project after confirming what she already suspected to be true: housing prices were causing a high attrition rate.

She sent out a survey to 1,500 faculty and staff members asking about their future with the college. Eighteen percent said they planned to leave within three years and 58 percent of them said it was because of housing. She discovered people were commuting from as far as Sacramento and Gilroy, both more than a 90-minute drive each way. The college brought in Thompson/Dorfman to build 44 units on what was a 2.5-acre parking lot, again for a small development fee and no profit margin. Bruce N. Dorfman, the firm’s other partner, explained that in an area like San Mateo, where new development is controversial, fostering good will in the community can only help when they propose market-rate housing in the future. The nearly completed teacher project, which the developers nestled into a hillside, offers sweeping views of the San Francisco Bay while protecting views of nearby residents.

Kevin Corsiglia is a physical education teacher and women’s soccer coach at San Mateo Community College, and his wife, Stacy, is an elementary school teacher in San Mateo. They want to have children, but with a joint income that is less than the median for the area, finding a suitable house is tough. They will be among the first residents of the new building, moving into a two-bedroom, two-bath unit for about $1,100 a month by the end of the year.

Mr. Corsiglia had never lived in an apartment building before. “But we looked at how they designed it and all the privacy with a balcony and private entrance to our own garage, you feel like it’s a town home,” he said.

The complex will be an improvement for Arturo Hernandez, who is a student counselor at the college. He and his wife, Jennifer, who is pregnant with twins, will move out of a trailer park near Oakland into a two-bedroom unit just minutes away from his campus job. Mr. Hernandez and his wife, who is studying for a doctorate degree in biology at the University of California at Berkeley, moved into the trailer as a last resort after bouncing from a crime-ridden neighborhood in Oakland to a crime-ridden neighborhood in Berkeley. They bought a trailer and have been paying $700 for a parking space. They move into their new apartment in January.

“If we hadn’t gotten this housing, we were thinking that we would move back to Arizona and she would have to finish her program long distance,” Mr. Hernandez said. “I started at a relatively high salary, and it still would not be enough to live in this area.”

The median price of a home in the area rose to $780,360 in 2005 from $477,300 in 2000, according to the San Mateo County Association of Realtors.

Thompson/Dorfman was recently chosen to build teacher housing in the Sausalito area, north of San Francisco in Marin County. Mr. Perotti, meanwhile, says he gets calls from all over California to give talks on how districts can go about doing this. “I guess it’s because people are realizing that this housing issue isn’t going to change,” he said.

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