In “Public Schools and Economic Development: What the Research Shows” (2004), Jonathan Weiss demonstrates the increasingly important role that public schools play in an area’s economic development. As businesses consider expanding or relocating into various communities, they look at the level of quality of life for their employees. Public schools are an important consideration in assessing the area’s quality of life.
With regard to the quality of an area’s public schools, one of the most significant issues that local education agencies (LEAs) face in developing quality education systems is teacher recruitment and retention. In their 2013 analysis of SECU Foundation’s involvement in teacher housing, Azaria Verdin and Ryan Smith looked closely at this difficulty. They found that nearly 50% of the teacher work force is approaching retirement and that new teachers are replacing many of those retirees. However, nearly 50% of those new teachers leave the profession within the first five years due to a variety of factors, including low teacher pay.
Over the last several years, some communities have started to address the teacher recruitment and retention issues by investing in affordable housing aimed toward teachers. State Employees’ Credit Union (SECU) Foundation is partnering with school districts and local nonprofit organizations to construct multifamily housing developments that include discounts on rent for teachers. By renting these apartments at below-market levels to teachers, SECU Foundation and some NC school districts are seeing improvements in teacher turnover and an intriguing model for addressing a major challenge for many communities in the state.
Some of the factors that influence teacher recruitment and retention are the presence of scholarships and stipends for graduate studies, salary level, the quality of school leadership, and instructional practices and professional support. SECU Foundation’s teacher housing developments have aimed at addressing the attractiveness of a certain community and LEA to teacher recruits. By providing an opportunity for less-expensive, communal teacher housing, they hope to reverse their teacher turnover issues.
The idea of communal teacher housing dates back to the late 1800s. They were meant to be “safe, convenient, and comfortable” environments where teachers could live and grow professionally (Verdin and Smith, 2013). They lost popularity through the 20th century, but SECU Foundation has partnered with nonprofits and LEAs since 2007 to open four apartment complexes in Hertford, Dare, and Hoke counties.
The SECU Foundation Teacher Housing model is such that school systems have donated surplus land for development, local governments (city and county) have worked closely to ensure the proper infrastructure is in place, and then SECU finances the construction with an interest-free loan. A critical stakeholder, in addition to SECU and the LEA, is a 501c3 organization that serves as the sponsor of the project. The nonprofit sponsor organization agrees to repay the loan over the course of fifteen years, then becomes the owner of the apartment complex and may use the rental income to supplement education funding in the area. This is meant to provide an opportunity not only to construct housing that may serve as a recruitment tool for teachers but also as an opportunity to create a more long-term and sustainable solution to the funding issues that school systems face.
Outside of North Carolina, there have also been experiments with teacher-focused housing. Oxford Mills, a multifamily development in Philadelphia, is steered toward teachers and includes 114 apartments (sixty-eight of which have been designated as affordable for new teachers who will receive rent discounts), education- and nonprofit-focused office space, and a café. The tenant mix and amenities, including a free fitness center and free parking, are designed to be particularly attractive to young teachers. The Oxford Mills development was funded in part through historic tax credits and new markets tax credits. Teach for America, a national teaching corps through which recent college graduates commit to teach for at least two years in low-income communities, has also been signed on to occupy 14,000 square feet of office space in the development. This sort of partnership and development demonstrates the potential for teacher housing in economic development efforts.
However, several questions remain. Are these developments attractive to predominately younger teachers, or are more experienced teachers, and possibly families, interested? What amenities are most attractive to teachers? Some communities may have teachers who are more interested in childcare opportunities and local parks, while others may have teachers who are more interested in being near a coffee shop or a certain office space. Could teacher-focused housing work in urban areas in addition to more rural areas? How might organizations like Teach for America and the growth of charter schools in North Carolina impact the potential for teacher housing?
Communities face myriad issues regarding public education. One of the most significant is the recruitment and retention of teachers. Teacher housing developments, like the four that have been financed by SECU have helped to decrease teacher turnover and may be valuable investments for other communities to consider.
How does your community address the needs of its teachers and schools? How do you see education affecting economic development? Use the blog’s comments section to further this conversation.
Graham Sharpe is a UNC Chapel Hill graduate student pursuing a master’s in Business Administration at UNC Kenan-Flagler Business School. He is also Fellow with the Development Finance Initiative.