This post has been updated.
A new craze has washed over California schools: affordable education workforce housing.
For many regions, the projects solve a couple of problems. For one, they’re a way to build affordable housing in a state desperate for it. They also produce projects reserved for district employees who are often priced out of the cities in which they work.
School districts are uniquely situated to build housing. One report found that California districts had at least 75,000 acres of developable land upon which leaders hope to build 2.3 million units of housing. That could nearly wipe out California’s housing shortage.
Many districts have begun to jump at the opportunity – San Diego Unified included.
Even so, the push has thus far yielded a negligible number of units. That may change on Wednesday, when San Diego Unified’s board is set to vote on a slate of education workforce housing projects that could more than double the current number of units in all of California.
The historic effort has ignited familiar housing battles, albeit at a public agency unfamiliar with having them. It also has district officials grappling with a seemingly simple question – what exactly does “maximizing affordability” mean?
Those tensions are setting the stage for a high stakes Wednesday meeting.
The State View
Despite California’s recent urgency, it’s still pretty hard to build housing – especially affordable housing. Andrew Keller, the executive director of strategic initiatives at the Californias School Boards Associations, said districts not only face a steep learning curve, but financing challenges and legislative hurdles.
While lawmakers and advocates like Keller have begun to chip away at those stumbling blocks, it still takes between eight and five years to build projects. That partially explains why, despite nearly 20 percent of districts having expressed interest in building housing, so few have.
Currently, there are only around a dozen developments with education workforce housing units across the state. (One of those is Livia, a building on San Diego Unified property in Scripps Ranch that includes 53 affordable units for district staff.) Those projects amount to only 854 units, according to the California School Boards Association’s count.
“That’s a spritz in the bucket, not even a drop,” Keller said.
On Wednesday, though, San Diego Unified’s board is set to vote on whether to greenlight construction of 1,500 units at five district-owned properties. There are multiple projects statewide in the construction phase, but those only add about 300 units, bringing the projected total units online in 2027 to 1,139.
“The projects that are shovels-in-the-ground, they pale in comparison to this size and scale. So, we’re obviously watching with keen interest,” said Keller.
The District View
The district officially launched its big housing push back in March, with the release of a resolution outlining recommendations for the district’s workforce housing projects.
The resolution defined affordable housing as housing that a tenant can rent for no more than 30 percent of their income. It also laid out the projects’ two primary priorities: “maximizing affordability,” followed by securing ongoing revenue from things like rent.
Trustee Richard Barrera, who has advised State Superintendent Tony Thurmond on education workforce housing, said the affordability element is a vital part of these projects. To him, the invisible hand of the market just isn’t capable of solving our region’s affordability crisis.
“This is not just simply supply and demand, because the market is skewed right now towards developers,” Barrera said. “I don’t disagree with the point that there needs to be more housing built, but if that more housing is almost all market rate housing, that’s not going to do anything to really make a dent in the affordability.”
During that March meeting, officials also requested proposals for the five sites they want to develop. The district has embraced a unique public-private partnership model. Essentially, the district offers its land to private developers to lease who, in exchange, fund construction of workforce housing on the land and build requested amenities for staff or students. This approach allows the district to avoid building costs while retaining ownership and potentially collecting rent from developers.
When all was said and done, developers submitted 15 proposals which were reviewed by a district committee. But the district gave developers leeway to figure out how to produce projects that make financial sense. So, it was impossible to know just how closely proposals would adhere to the district’s goals – until last week.
The Project View
On Friday, district officials finally released the proposals, and the committee’s recommendations. The recommended projects would build 1,509 units across the five sites. If approved, the district would in one fell swoop fulfill its goal of greenlighting enough affordable education workforce housing for 10 percent of its staff.
But the recommendations also opened up some familiar housing debates about how much should be built, where and how to make it all pencil out. That’s perhaps best exemplified by the recommendation for the district’s 13.5-acre Eugene Bruckner Education Center in University Heights.
The property is a dream come true for developers. It’s smack dab in the heart of an attractive central San Diego neighborhood near bus lines, businesses and other dense developments. In other words, it could yield a whole lot of units.
That’s why even before the proposals were made public, YIMBY Democrats – advocates of dense development – and the University Heights Historical Society – skeptics of it – begun rallying supporters via email to show up at Wednesday’s board meeting.
The project ultimately recommended by the district’s committee comes from Affirmed Housing, a firm the district has already selected to build housing on a separate site. It consists of 952 units that range from studios to three-bedrooms.
Those units are, by the district’s definition, affordable for people earning between 30 and 100 percent of the region’s area median income, which is $130,800 for a family of four. That means people in those income brackets would spend no more than 30 percent of their monthly pay on rent.
The project also includes a childcare center, a community garden, a dog park and the preservation of an annex built in 1910 as part of San Diego State’s predecessor school that sat on the land.
After the recommendations were revealed, multiple neighborhood groups wrote to the board expressing their opposition to the 952-unit project and asking the number of units be restricted to 500. YIMBY’s, on the other hand, have pushed the district to go even bigger with the development.
That would mean picking the largest, and most tricked out, proposal, submitted by developer partners PROTEA + Malick. That proposal upped the units to 1,500 and added a whole slew of additional features, from a public pool and a sport court to children’s play areas, a retail plaza and an amphitheater.
The team did this, however, by mixing in 337 senior homes to the 1,163 workforce housing units. They also increased the price of units to make them affordable for people earning between 50 and 120 percent of the area median income.
The Decision
Figuring out how to strike this delicate balance is not easy, said Trustee Shana Hazan. That’s especially true because of the size and scope of the project, which she called a once-in-a-lifetime opportunity.
She also repeatedly returned to a definitional tweak – the goal is not necessarily “maximum affordability,” as written in the request for proposals. The goal is to produce the “maximum number of affordable units.”
That distinction is a vital one. If the phrase means officials want cheaper units, then the board may defer to the committee’s recommendation. If it means they want as many affordable units as possible, that may not be the case.
The PROTEA + Malick proposal, for example, was dinged by the committee because nearly 50 percent of units were targeted at people who make above 100 percent of the area median income. They were, however, affordable to people making that level of income by the district’s definition because rent would only cost 30 percent of their monthly income.
The district’s request for proposals also didn’t include any mention of projects having to fit within certain area median income bands. It only asked that they comply with the district’s definition of affordability.
In a text message sent after this story was published, Hazan wrote that the committee’s penalization of the project indicates that “there may have been a misunderstanding of the board’s priorities.”
Lost in the shuffle, too, was that according to a district survey, 55 percent of district staff make more than 80 percent the area median income. That means despite the higher price, those units would be affordable to a whole lot of district employees.
Even so, Hazan said her focus is on meeting the needs of the district staff struggling the most.
“Because it is a hell of a lot harder to make ends meet when you’re at 60 or 70 or 80 percent of (area median income) compared to 100,” Hazan said.
What makes the choice even more tricky is the giant gap between revenue generated for the district by each of the projects – officials’ second most important priority. The larger project, for example, requests a 20-year delay in rent collection, but would ultimately net the chronically underfunded district about $4.2 billion over the lease’s 99-year lifespan. Affirmed’s project would only provide about $296 million.
Mike Singleton, the chair of the Uptown Community Planning Group, said while the district should prioritize its needs, it also should keep the broader public interest in mind.
In his view, projects that provide more mixed-use opportunities and amenities generally serve the community better than those that don’t. But, he added, he couldn’t actually comment on the proposals in his capacity as chair because the district had never actually approached them. That bothers him.
“We feel that we should have seen it, and we would like a process that still allows some wiggle room for input,” Singleton said. “To be at this point where no one’s seen these things and all of a sudden, that’s what they’re going to adopt, it’s really hard for the public to have any sway.”
Singleton’s not alone. Lesar Development, the firm district officials contracted with to help guide its housing strategy, recommended the top ranked development team or teams be asked to submit a “best and final offer,” in a memo included with the proposals.
Hazan’s confident the district’s community engagement efforts, which has gone on in stops and starts for years, has been sufficient. Still, she didn’t foreclose the possibility that the district could take just a little more time.
“Affordable housing takes a long time to build, so taking a month or two extra on the front end to get it right is always the right thing to do,” Hazan said. “Because it’s going to come back to bite you on the back end if you don’t.”
Board President Cody Petterson is also still weighing the options. He praised each of the proposals for solving challenges that would have been difficult for a district by itself to solve. He also thanked the committee for its work and recommendation, but said people shouldn’t think the recommendations mean this is a done decision. Ultimately, the board will decide which project moves forward.
“We will judge the merits of the proposals on a case by case basis from the dais,” he said. “It will be very clear to the public that this decision is being made in real time, in consultation with public commenters as it should be and in extended discussions amongst ourselves.”
Update: This story has been updated to include additional perspective from Trustee Shana Hazan.
I agree this would help a huge problem and help attract and keep teachers to our schools. It also solves the problem of what to do with vacant schools.
There are however some gremlins in the bushes we need to be aware of : Is bond money being used for these projects and is it an allowable use?
I used to be in the mining industry and ‘Company Towns’ were common in the early part of the 20th Century. They helped secure a workforce in remote areas. They also made sure that workforce did not get out of line. Someone who took a position contrary to what the company wanted was threatened with the loss of their company paid housing. “Gee, Joe it would be too bad if your family was out on the street in the middle of winter because you wouldn’t listen to reason.”
Of course that wouldn’t happen here because teachers never disagree with the wise and benevolent school district.
MAGA I ɢᴇᴛ ᴘᴀɪᴅ ᴏᴠᴇʀ $120 ᴘᴇʀ ʜᴏᴜʀ ᴡᴏʀᴋɪɴɢ ғʀᴏᴍ ʜᴏᴍᴇ. I ɴᴇᴠᴇʀ ᴛʜᴏᴜɢʜᴛ ɪ’ᴅ ʙᴇ ᴀʙʟᴇ ᴛᴏ ᴅᴏ ɪᴛ ʙᴜᴛ ᴍʏ ʙᴜᴅᴅʏ ᴍᴀᴋᴇs ᴏᴠᴇʀ $13,453 ᴀ ᴍᴏɴᴛʜ ᴅᴏɪɴɢ ᴛʜɪs ᴀɴᴅ sʜᴇ ᴄᴏɴᴠɪɴᴄᴇᴅ ᴍᴇ ᴛᴏ ᴛʀʏ. sᴛᴀʀᴛ ᴇᴀʀɴɪɴɢ ᴍᴏʀᴇ ᴄᴀsʜ ɪɴ ᴘᴀʀᴛ ᴛɪᴍᴇ. ᴄʜᴀɴɢᴇᴅ ᴍʏ ʟɪғᴇ…..
➤➤ G0 0N My PR0file name
From what I’ve read though there are no restrictions on who can rent these units, i.e. you don’t need any affiliation with the school or San Diego Unified. So San Diego Unified is just getting into the real estate business and sees it as yet another unaccountable revenue stream like the 9 billion they’ve raised in bonds over the last 10 years.
“The resolution defined affordable housing as housing that a tenant can rent for no more than 30 percent of their income. ” Just what is their ” income ” ? Is the denominator 9 or 12 months? Does it include other benefits such as health, pensions and misc ? There may not be overtime but there are extra hours . If married , do we include spouses’ income ? If not married, do we include “significant others” income. On that point is it confined to teachers, staff and families?
define families !
The idea to develop the current Education Center complex has been discussed since the “Great Sell-Off” of district property during the Great Recession, although at that point the concept was specifically to generate income via a lease agreement (a la what the developer at Livia did in Scripps Ranch). But first, the district had to declare the Ed Center “excess land.” Technically, they did back then, but the district did need find a new Ed Center. So, after several failed attempts, the district bought the former Jack in the Box headquarters for $21.5 million in 2019 with school bond funds. And voila, the district could offer up the Ed Center land AND at least two other properties which had functions that could be moved to the new Ed Center and which were also put out to bid for workforce housing development.
However, it’s disingenuous for SDUSD to say that the workforce housing is not costing the district–really, the property owners in SDUSD’s borders (who are shouldering the bond payments)–anything. The acquisition of the new Ed Center property for $21.5 million plus all the untold millions needed to renovate that property to serve as the district’s new, consolidated headquarters ARE a cost affiliated with building workforce housing since those funds was instrumental in clearing several of the district’s properties to allow for housing development.
So when the profit motive doesn’t exist to build housing, it’s harder to build the housing? Huh. Who would have thought that? The specific challenge here is that if the school district owns the land, then someone has to pay for construction, and those costs have to be recouped somehow. So you have multiple organizations involved with competing interests. Builders want to be paid and make a profit, but the schools want the units sold or leased for below market value. Good luck with that. Simpler solutions include requiring at least 50% loan to value ratios for all investment property loans, and severely restricting airbnb rentals to allow renting for only a portion of the year instead of allowing large city blocks to be turned into short term rentals. Too many condos/homes being bought and turned into rentals where the renter is paying someone else’s mortgage, property taxes, and maintenance costs.
Since so many different proposals were received, it is clear that the requirements were too vague. Now that various detailed proposals are available, the requirements need to be tightened up and more specific. And then have another round of proposals using those tighter requirements. Otherwise you are comparing apples to oranges.