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In an attempt to incentivize more employees to move into its staff housing building, the Mountain View Whisman School District decided last week to offer two months of free rent to the next 40 people who sign leases.
The school board voted unanimously at an April 3 meeting to provide the two month rent concession, starting the following day. Tenants can choose whether to receive two months of free rent at the beginning of their lease, or have the savings spread out over the lease term. The offer would only be available to new tenants, not those who have already signed leases, Chief Business Officer Rebecca Westover said.
Mountain View Whisman has built 144 apartments at 699 N. Shoreline Boulevard, 123 of which are set aside for teachers and other district employees. In recent months, tenants have begun moving into their new apartments and the district is in the process of trying to fill the building. According to Westover, the district has leased 39 units thus far.
The rental rates have been a cause for concern, with questions raised about whether the units are truly affordable for Mountain View educators. At a March 27 study session, Superintendent Jeff Baier said that the current rent levels appear to be the “main inhibitor” to getting more staff members to move into the building.
The way that the project is structured, the units are divided up based on income level. Roughly one-quarter of the apartments are set aside for those earning up to 80% of the area median income, while the rest are available for those earning up to 120% of the AMI.
Rent is currently substantially more expensive for those in the 120% tier. For instance, a one-bedroom apartment costs $1,450 per month at the 80% tier, versus $2,900 at the 120% tier.
Board President Bill Lambert stressed during the March 27 study session that offering the two month rent concession “shouldn’t be confused … with the underlying issue here that rents are too high.”
While district staff acknowledged that the concession won’t address the rental rates directly, they hope that the offer will entice more people to sign leases. Separately, the district has been exploring ways to reduce rent levels.
According to Westover, the rent concessions won’t create a financial burden for the district, because the units were already slated to be empty and therefore not generating any rent. The district’s financial plan for the project doesn’t assume all the apartments will be filled at once, but rather that people will move into the units over time, with the building hitting 90% occupancy in August.
Getting more time to decide whether to buy the land
Concurrently with the effort to lease out the apartments, the district is also in the midst of considering whether to buy the land beneath the building.
While the district used roughly $88 million in bond funds to construct the apartments, the land itself is owned by the real estate developer that is building an adjacent market-rate complex. Under this setup, the district is on the hook to pay a $1.9 million annual ground lease, which will increase 2-4% annually based on inflation.
In January, the school district signed an “option to purchase” agreement with the developer, which gave the district until June 30 to negotiate a purchase price and decide whether to buy the land. Entering into the agreement cost the district $100,000, half of which is non-refundable.
At the April 3 meeting, the school board voted in closed session to approve an amendment that extends the deadline to June 31, giving the district an extra month to make its decision.
Lambert told the Voice that the extension didn’t come at any cost to the district and would allow both parties more time to negotiate.
Zoe does quite a bit of selective omissions when it comes to competence of the MVWSD board and district office staff. IMO she shouldn’t cover this district anymore, because she fails to report to full picture consistently.
I thought this was a factually correct piece. If you have an opinion, they have an opinion section.
“The way that the project is structured, the units are divided up based on income level. Roughly one-quarter of the apartments are set aside for those earning up to 80% of the area median income, while the rest are available for those earning up to 120% of the AMI.”
So, 3/4 of the units are set aside for teachers who are paid relatively high wages? Interesting.
This entire project appears to have been managed very badly.
Mountain View YIMBY, of which I’m a member, supported this project when it was up for approval circa 2018. However, I should note that this was this was before the various scandals associated with Superintendent Rudolph were publicly known. Also, we had some reservations about the principle of dedicated teacher housing. Let this mismanaged project be an example of why affordable housing without additional restrictions is better than set-asides for individual professions. School districts shouldn’t be in the housing development business.
What a rolling disaster.
BTW, I think Zoe’s coverage has been quite good