by Bob Poppenga
Recent conversations with several Davis teachers brought to light the issue of whether DJUSD teachers can afford to buy a house within District boundaries. While hard data is limited, I have been told that approximately 60% of current teachers in the District live in Davis with the majority of the 60% either experienced teachers with 15 or more years of service or young teachers who are renting apartments.
The percentage of Davis teachers living in the city from other demographics (e.g., mid-career teachers, early career teachers with families) might be much lower. Anecdotally, a large number of young Davis teachers with families live in surrounding communities such as Dixon, Woodland, Natomas, and in communities east of Sacramento.
The percentage of teachers unable to buy a home in Davis is likely to increase over the next several years due to an influx of younger teachers replacing a large cohort of experienced teachers who are near retirement.
Another factor contributing to the inability of many young teachers to buy a home, even in communities with more affordable housing than Davis, is an ever-increasing college debt burden that, in many cases, will take years to pay down.
An interesting report by Redfin Research Center (www.redfin.com) stated that only 17% of homes for sale in California are affordable on a teacher’s salary. The percentage drops to zero in San Francisco.
Traditionally, DJUSD has been considered a desirable place to teach and as a result has had a leg up on the competition for attracting highly qualified teachers. However, relatively low overall teacher salaries resulting in fewer people wanting to enter the profession, a nation-wide demand for new teachers as experienced teachers retire, and the high cost of housing are likely to make competition much more intense.
It is reasonable to speculate that the great reputation of Davis schools, combined with a slow growth history, will continue to make it hard for teachers to live in Davis since competition for limited housing will keep home prices high compared to surrounding communities. It’s ironic that the teachers who make our schools so desirable in the first place are priced out of the Davis housing market in part because are schools are so desirable.
A recent article (July 22, 3014) in the Davis Enterprise indicated that more homes are now for sale in Davis compared to the last several years, but their prices are higher. While I have not checked the numbers, it seems as though current housing prices are equivalent to those just prior to the recession. According to the Enterprise, the median price of a Davis home was $551,272 for all home types and $595,000 for single-family homes.
The article stated that during the first half of 2014, 38 properties sold for less than $300,000 and 114 properties sold for between $300,000 and $499,999. What income would support the purchase of a $300,000 to $500,000 home? Assuming a conventional 30-year fixed interest mortgage with an interest rate of 4.3% and a 20% down payment, a $300,000 home would require a monthly mortgage payment of approximately $1200 (excluding property taxes and home insurance) and a $500,000 home would require a monthly mortgage payment of approximately $2000.
Further assuming that housing costs should not exceed 30% of family income, $1200 and $2000 monthly payments would translate into a needed annual income of approximately $48,000 and $80,000, respectively. Houses at the lower end of the range are typically around 1000 square feet, which would be very small for a family. A 1500 square foot home at $300 per square foot would cost $450,000. In comparison, the median Woodland home price is about $274,000, while Dixon comes in at about $320,000 (approximately 50 to 60% of the Davis median price).
Beginning teacher salaries in DJUSD are approximately $40,000 give or take a few thousand. According to the California Department of Education, the average scheduled teacher salary was $66,722 in Davis, $61,900 in Woodland, and $61,477 in Dixon. Even if a teacher can afford a home in Davis, they might opt for a home in a lower priced community in order to have more disposable income for other uses.
Mid- to late-career teachers might be unable to afford a home in Davis as well. A recent report by the Center for American Progress stated that “mid- to late-career teachers are not earning what they deserve, nor are they able to gain the salaries that support a middle-class existence” (www.americanprogress.org). One result is that many teachers leave the profession early to seek higher paying jobs. Admittedly, low salaries are not restricted to the teaching profession and middle class salaries in a variety of professions are taking a hit.
Another relevant article to attracting and keeping talented teachers was in the August 3rd edition of the New York Times and was titled “Affordable Housing Draws Middle Class to Inland Cities.” “Rising rents and the difficulty of securing a mortgage on the coasts have proved a boon to inland cities that offer the middle class a firmer footing and an easier life.
In the eternal competition among urban centers, the shift has produced some new winners.” Affordable cities that are growing rapidly include El Paso, San Antonio, Columbus, OH, Little Rock, and Oklahoma City. Thus, newly minted teachers trained by UC or CSU, might be less inclined to remain in high-priced California and to seek out opportunities in more affordable regions of the country.
A couple of qualifiers: 1) individual teacher salaries do not always equate to total family income since there might be two wage earners in the family and many teachers supplement their incomes with other jobs and 2) not all teachers would necessarily live in Davis even if they could afford to do so.
Perhaps the first question to ask is whether it ultimately matters if teachers live outside of the community in which they teach. I’m sure that there are differences of opinion in this regard, but most people that I have spoken to about the issue feel that it is important for teachers to live and raise their families in the communities where they teach.
There is certainly more connection to the community and schools, particularly for those teachers with K-12 age children who would be participating in school programs. Living in the same community decreases travel time and costs and perhaps provides for greater willingness to participate in and attend extracurricular activities.
One positive that is more unique to a university town like Davis would be the potential for more informal interaction with UCD faculty and a greater awareness of university resources and programs that might be leveraged to help in the classroom.
Working under the assumption that it is desirable to have Davis teachers live in Davis but that many can’t due to the high cost of housing, the next question is what can be done to remedy the situation?
UCD has long recognized that the high cost of housing in the region can negatively impact faculty recruitment and has developed programs to assist faculty in buying a home (not restricted to Davis homes).
The programs include a taxable housing stipend at the time of recruitment that can be used to buy a home, mortgage interest rates below prevailing rates, and an ability to buy certain homes at below prevailing home prices.
Whether similar programs are feasible for Davis K-12 teachers should be explored and their relative costs evaluated. Other districts such as Los Angeles have attempted to provide affordable housing for teachers with mixed success (www.laschoolreport.com). Such efforts could be examined for guidance as to what might or might not work. At a minimum, data should be collected on why teachers live outside of the district so that trends can be monitored and short- to long-term impacts on the District can be assessed.
Useful data will likely be collected as part of the District’s Local Control Accountability Plan (LCAP) to assess teacher retention. However, using data collected over the next few years will likely result in a baseline that does not take into account long-term District trends.
One simple, cost-effective idea worth exploring would be to work with local real estate agents to give teachers early notice of available housing so that they don’t lose out in our fast-paced, competitive housing market.
Some might argue that focusing only on affordable housing for teachers is unfair given the difficulties that many others have finding good, affordable housing. However, given the critical role that our teachers and schools play in maintaining a strong community, an attempt should be made to provide viable options for them to live in the community in which they teach. This will help recruit and retain good teachers. As a School Board member, I would strive to bring knowledgeable people together to see if creative, cost-effective solutions can be found to address a District problem that I believe is significant.