Teachers can now get home mortgages from Bank of America with no down payments. In Connecticut, they can borrow money to buy houses at below-market interest rates. And in many urban areas throughout the country, teachers can get deep discounts on federally owned houses through the Teacher Next Door program.
Helping teachers find affordable housing to buy or rent is becoming a popular incentive as teacher shortages and attrition continue to plague schools.
Whether such incentives have made a difference in attracting and retaining qualified teachers is unknown. “This is a relatively new phenomenon, so we don’t have a whole lot of data on it,” said Segun Eubanks, a teacher- recruitment specialist for the National Education Association.
Although housing incentives started at the district level, states are now beginning to dangle such benefits before teachers. California, Connecticut, and Mississippi are three that have targeted housing as a means of bolstering their teaching corps.
A program in Connecticut provides low-interest mortgages and down-payment assistance to teachers in needy communities, and in “high priority” subjects, such as mathematics, science, and special education.
The program is designed to address the state’s teacher shortage and “to help make urban school districts more competitive with suburban districts in terms of recruiting teachers,” said Thomas W. Murphy, a spokesman for the Connecticut education department.
About a dozen teachers have taken advantage of the low-interest mortgages since the state began offering them last fall. Mr. Murphy expects those numbers to climb with the arrival of spring and summer, a more popular time for house-hunting and employment decisions. “We think there will be a real step up” in participation, he said.
A similar program in California, coordinated by the state’s treasury department, offers educators $7,500 loans to help with down payments. Teachers and administrators must work in low-performing schools for five years after receiving the loans.
The cost of living in California and Connecticut is higher than the national average, but housing can be a big consideration for prospective teachers even in regions with lower costs.
To help stave off a looming teacher shortage, state legislators in Mississippi drafted a comprehensive plan in 1998 to attract new teachers and keep the ones they already employed. Teachers can get up to $6,000 for down payments and closing costs on houses in regions where the shortages are considered critical. Since the program began, 78 teachers have received the housing benefit.
The Mississippi plan also includes an incentive for recent college graduates who may not be in the home- buying market: More than 240 new hires have been given up to $1,000 in moving expenses since its inception.
Overall, state officials are pleased with the results. “I would have to term it successful,” said Judy Beaird, the director of recruitment for the Mississippi Teacher Center, a branch of the state education department.
The Mississippi teachers who received money to buy houses are required to teach in their districts for three years, a provision that state officials hope will “plant” teachers there so they will be less likely to leave, Ms. Beaird said.
Federal legislation introduced last month would create a similar program on a national scale. U.S. Rep. John L. LaFalce, D-N.Y., is sponsoring a bill, called the Homeownership Opportunities for Uniformed Services and Educators Act, that would provide teachers, policemen, and firemen with Federal Housing Administration mortgages requiring only a 1 percent down payment. Generally, the FHA requires 3 percent down.
An existing federal program allows teachers to buy federally owned houses at half their listed prices, and aims to help root teachers in communities as well as attract them to urban locations. Most of the eligible houses, which the federal government acquired because the previous owners defaulted on their loans, are in ill repair and located in low-income neighborhoods.
The Teacher Next Door program was perfect for Karen DiGiaimo, who bought a six-bedroom, four-bathroom house for $42,500 in the racially and socioeconomically diverse community of Brentwood, N.Y., last year. The house had been sorely neglected, but Ms. DiGiaimo said it was well worth the $25,000 she invested in repairs because she was able to buy a much bigger house than she could have afforded otherwise.
“I’m very happy with the house. It’s incredible,” said Ms. DiGiaimo, who teaches 2nd grade at Cordello Avenue Elementary School in the neighboring town of Central Islip. Though the rules of the program require teachers to work in the districts where they purchase their houses, she obtained a waiver to buy in an adjacent district with similar characteristics.
Teachers also must agree to live in the houses for three years. Ms. Digiamo says her family has no plans to move any time soon. Seeing her students at the local library and supermarket has really connected her to the community, she said.
The Teacher Next Door program was modeled after the Officer Next Door program, which places police officers in disadvantaged communities. Expanding the program to include teachers seemed “the logical next step,” said Lemar Wooley, a spokesman for the U.S. Department of Housing and Urban Development, which administers the program.
The program is open to any state-certified teacher or administrator employed full time by a public or private school or government educational agency.
So far, 711 contracts have been closed since the program was launched in August 1999. “It looks like it is going to be very successful, based on the sales so far and the vast number of phone calls and requests for information we have received,” Mr. Wooley said.
In fast-growing Clark County, Nev., alone, roughly 200 houses have been sold under the program. “It’s been very popular,” said K. Kelly, a real estate agent with Liberty Realty who specializes in HUD-owned homes in the Las Vegas area.
The price for a house in the area averages around $138,000, but through the Teacher Next Door program, educators are able to buy houses that would normally be in that price range for about $65,000, Ms. Kelly said.
Housing incentives can be one extra benefit for recruiters to use to lure teachers. Baltimore offers $5,000 home-buying grants to all city employees, including teachers.
“The [teaching] candidates are pretty excited that the city is offering that money,” said Sylvia Torry, a recruitment specialist for the 103,000-student Baltimore district.
Last year, the district needed to hire 950 teachers. Ms. Torry credited the city’s housing grant with helping to fill some of those slots. “That was an incentive for those who are really interested in buying homes,” she said. The program has been so popular that 60 teachers participated last year alone.
But buying a house has not been an option for many teachers in Santa Clara, Calif., where the average cost of a new home is $400,000, and the average teacher salary is $56,000. To attract new teachers, district officials “needed to do something,” said Roger Barnes, the director of education partnerships for the 14,600- student district.
In October 1999, the district decided to build an apartment complex for teachers. Construction is scheduled to begin this spring. The complex will consist of 40 units, and rent will run $800 a month for a one- bedroom apartment and $1,200 for a two-bedroom unit—about half the going rate for the area.
In San Francisco, however, a proposal to build an apartment complex met with such opposition from teachers and residents last year that the district backed off. Teachers complained that the complex did not address the need for higher salaries so they could afford to live in the area, and residents who lived near the proposed site expressed concerns about parking and increased traffic.
But San Francisco school officials have not given up on the concept of housing incentives. “We are getting together a comprehensive plan to develop a housing-incentive program,” said Larry Del Carlo, the director of business and community development for the 65,000-student district.
Though the apartment complex in Santa Clara may attract new teachers, it won’t be enough to keep them working for the district, Mr. Barnes said.
“We thought that if we could help them buy a house, they would become attached to the community and they would stay here,” he said.
So district officials partnered with the computer-technology firm Intel Corp., which is based in Santa Clara, to offer teachers $500 a month for five years toward their mortgage payments through what is called “equity share.” Under that arrangement, teachers pay back the money, $30,000, through the equity their houses accrue over the course of the five years.
“If they borrowed the money [via a traditional route], they would end up paying us back more in interest than through this equity share,” Mr. Barnes said.
Half a dozen teachers have settled on housing contracts since the program began last fall. Most have bought condominiums, according to Mr. Barnes.
Intel agreed to team up with the Santa Clara district in part because its own recruiters want to be able to tell new employees that the area has a high-caliber school district with stable teachers. “They can attract good employees by showing them that their kids are going to good schools,” Mr. Barnes said.
Another large corporation getting into the business of offering housing deals to teachers is Bank of America. The Charlotte, N.C.-based financial institution recently introduced Teacher Zero Down, which offers mortgages to teachers with no down payments in 37 states. The bank recently began promoting the plan through television advertisements. Bank of America targeted teachers because it fits with the bank’s corporate philosophy of educating communities, and providing teachers with better opportunities to buy homes helps in that mission, said Terri Bolling, a bank spokeswoman. “Teachers may have more challenges in buying a home because of their salaries,” she said.
Observers are unsure how effective housing incentives are for helping solve teacher shortages. The goal of most home-buying programs is to retain teachers already employed in districts, said the NEA’s Mr. Eubanks.
Providing recruits with moving expenses, such as Mississippi does, was previously unheard of, he added.
Now, even more programs for new employees are popping up. For example, some districts have made deals with apartment complexes so that new teachers don’t have to pay security deposits or utility hookup fees.
‘Back Door’ Raises
But all those perquisites can mask the much bigger problem of low teacher salaries, according to David Haselkorn, the president of Recruiting New Teachers, a Belmont, Mass.-based nonprofit organization that works toward enlarging and improving the nation’s teaching pool. “The issue is not so much the cost of housing, but the teacher salaries relative to the local labor markets,” he said.
Many districts use incentives as a “back door” way of raising salaries, Mr. Haselkorn argued.
On the other hand, housing incentives are potentially more effective and longer-lasting than other kinds because districts are connecting teachers to communities, he added.
“They are trying to recruit and retain,” Mr. Haselkorn said, “and build community capital at the same time.”
A version of this article appeared in the March 07, 2001 edition of Education Week as For Sale: Affordable Housing for Teachers