To lure more teachers, CO school districts enter the housing market

By Real Estate News

Affordability has been a chief topic of concern in the housing industry for the past several years, and the lack of affordable options in the state of Colorado is pushing that state’s school districts into action.

Leaders in Colorado districts are entering the housing market in a variety of ways, including engaging in partnerships with developers, constructing tiny homes and even becoming landlords, according to a story published by the Denver Post.

Getting more involved in housing

“School districts in Colorado’s pricey high country are leading such efforts, but at least one metro Denver district — the Douglas County School District — is eyeing a partnership with developers to turn district land into housing for its employees,” the story explained. 

Leaders in other counties explain why the move is necessary: raising teacher salaries doesn’t work since funding for the state’s K-12 programs doesn’t allow for wages to rise commensurately with housing costs, necessitating more affordable options for housing.

“We’re solving for an issue that is much more systematic,” said Tony Byrd, superintendent of the Summit School District serving the micropolitan area of Breckenridge, in an interview with the Denver Post. “Frankly, the cost of living vs. wages makes it such that if we are going to staff our schools… for many districts we have to jump in and do it.”

An expensive noncoastal market

According to data from real estate research firm Zonda, Colorado stands as one of the most expensive non-coastal housing markets in the United States.

“Potential buyers in expensive noncoastal markets, but also in many metros across the country, have had to get creative to find paths to homeownership,” said Ali Wolf, chief economist at Zonda in October. “Those looking to buy are considering their options such as buying a smaller home, moving farther from a central business district, stretching their budget, looking for creative financing, and even uprooting their lives and moving to a more affordable market elsewhere in the country.”

The state is also experiencing a shortfall of housing inventory, as is the case with many major housing markets across the country. Rents also remain challenging according to data the Post cites from Zillow. On the extreme high end, median rent in Aspen is $35,000 according to recent estimates. But all the ski towns have an affordability issue.

“In Frisco, the median rent is $5,500 and in Breckenridge it’s about $6,000. By comparison, the median rent in Denver is $2,169, according to Zillow,” the report said.

Traditional methods aren’t enough

Leaders have turned to more traditional means for increasing teacher salaries, including local levies asking voters for a tax increase to fund additional salary increases or district investments. While some of these have worked, they still often fail to unlock enough additional funding to offset the increases in housing costs.

The state’s Douglas County, which is part of the Denver-Aurora-Lakewood metropolitan statistical area, recently saw voters approve a tax levy that would increase teacher salaries by an estimated 9.2%.

“Even then, our starting salary will be about $50,000 and you just can’t live in Douglas County for $50,000,” Douglas County School District Superintendent Erin Kane told the Denver Post.

The district is now exploring “using some of our district land and partnering with developers to potentially do housing that would be inexpensive for our teachers and staff to access,” Kaine told the outlet.

The actions of these districts in Colorado is not unprecedented. Earlier this year, a district in the state of Florida began exploring a similar measure to bring in more teachers, one that would see a former junior high school in St. Petersburg, Fla. being targeted for redevelopment into an affordable housing apartment complex.

Read the rest of the Denver Post article here.