The three-way partnership between FortBay, the district and the city of Mountain View has been in the works for nearly a year, and was announced in October as an alternative to the district developing its own land for a housing project. The agreement also satisfies FortBay's requirement for affordable housing units which, absent the partnership, would have made the project infeasible, according to a city staff report.
Superintendent Ayinde Rudolph urged trustees to think of the project as an important investment to retain teachers amid a regionwide housing crisis. Employees are sharing apartments and commuting 50 to 60 miles to get to work, he said, and the district doesn't have even close to enough funding to bring salaries up to the median income in Santa Clara County.
"I firmly believe if we plan on keeping the 666 employees that are here ... that the 144 units will make a big dent," Rudolph said.
Assuming the project receives city approval in the coming months, the employee housing portion of the project could be completed as soon as late 2021.
Under the agreement, the district will lease a subset of FortBay's massive proposed housing project — 1.8 acres along Shoreline Boulevard — and pay the developer $56 million to construct the 144-unit apartment building. Leasing the land will cost $900,000 during construction and $1.8 million after, though the project is expected to be cost-neutral, Rudolph said. The district will collect rent from the employee tenants and will likely convene a special board to determine the rental rates, which he clarified would only be able to go down — not up — to balance out the finances.
Setting the rents and conducting the lottery process that determines who gets to live in the subsidized housing is best handled by a separate and impartial entity, Rudolph said, to avoid any appearance of a conflict of interest.
"You do not want a teacher or staff member to say the board is retaliating because of something they said," Rudolph said.
The school district has been exploring workforce housing options since early 2016, weighing whether to emulate successful teacher housing projects created by the Santa Clara Unified School District and the San Mateo County Community College District. A feasibility study looking at the district's own property ultimately landed on district-owned land at Cooper Park as the most viable option, but it was faced with vehement opposition from nearby residents.
Mountain View Whisman officials instead sought to piggyback on a project already in the development pipeline — FortBay's project — and offered to pay for the affordable housing component. Of the 144 apartments, 36 will be designated as "low-income" units for employees whose household income lands between 50 and 80 percent of the county's median income ($125,000). The remaining 108 units will be for "middle-income" families, available to households making up to 120 percent of the median income.
Rents will be based on what each household makes, Rudolph said, but on average the low-income employee tenants will pay between $1,409 for a studio and $1,811 for a two-bedroom apartment in monthly rent, while the moderate-income employees will pay between $2,630 and $3,381. The entire FortBay project will have 878 parking spaces, but only 144 will be available to the teacher housing units.
Whether this technically satisfies the city's affordable housing requirements is debatable. The city doesn't have a firm handle on what the equivalency is between a low-income and a middle-income housing unit, but roughly estimates that the 15 percent affordable housing requirements translate to a 27 percent middle-income housing requirement. Under that standard, the agreement with the school district would then fall slightly short.
But city officials may choose to waive the difference, in part because it would bring middle-income housing stock to an area with virtually none. Annual housing reports going back to 2007 show Mountain View needed to generate more than 500 "moderate-income" homes to meet the demand, but issued permits for only four units. The dearth of moderate-income housing is a consistent problem across all cities in the nine-county Bay Area, fueled largely by the lack of tax credits and subsidies.
Past city staff reports also note the partnership means Mountain View can make significant progress toward meeting its affordable housing needs without having to foot the bill, but the city is expected to contribute some money into the project. The agreement leaves open the option for the city to make a one-time payment toward construction of the 144-unit building in exchange for the "first right of refusal" on 20 of those units for city employees.
Plenty of details are still to come. Rudolph said the board still needs to establish a process for verifying employees qualify for the housing, how long they can stay in the apartments and what to do if teachers quit their jobs with the district or their income suddenly exceeds the ceiling for what qualifies as low- or middle-income. The school district could also consider policies for who can apply if there are vacancies that remain unfilled after soliciting school employees, but Rudolph said the demand is so high he doubts it will be necessary.
"I don't think that is going to be an issue for us at all," he said.
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