Upward Communities Research
Financing is the first question most districts ask, and rarely the one that sets the schedule. This report sets out the four routes districts use in practice, what each one demands of a district, and why permitting rather than capital was the obstacle most often cited in the research.
Through four routes in practice: certificates of participation, general obligation bonds, low income housing tax credits, and partnership with a private or nonprofit developer who brings the capital. Across nine California developments studied by UC Berkeley and UCLA in 2025, most projects combined more than one of these rather than relying on a single source.
The Berkeley and UCLA researchers recorded which mechanism each project used. Certificates of participation financed Casa del Maestro entirely, and contributed to 705 Serramonte, The Alameda, Eastmoor Heights, The Sevens and The Acacia. General obligation bonds contributed to 705 Serramonte, The Alameda, Eastmoor Heights, The Sevens, Shirley Chisholm Village and 1701 San Pablo. Low income housing tax credits were the primary source for Sage Park and contributed to Shirley Chisholm Village and 1701 San Pablo.
The table below sets out how each mechanism works and what it demands of a district. The descriptions are structural. Project-specific costs are not included because the Berkeley and UCLA study did not publish total development cost or cost per unit for any of the nine developments, and we have not found a comparable published figure elsewhere.
| Mechanism | How it works | Typical timeline | Best fit | Tradeoffs |
|---|---|---|---|---|
| Certificates of participation (COPs) | The district finances construction against a lease of its own asset. No voter approval required in most states. | Shorter than a bond cycle because there is no election to wait for. | Districts that own suitable land and want to move without a ballot measure. | Debt sits with the district. Capacity used here is capacity not available for facilities. |
| General obligation bonds | Voter-approved debt repaid from property tax revenue. | Governed by the election calendar, so add the wait for the next ballot. | Districts with community support and available bonding capacity. | Requires winning a public vote on housing rather than classrooms. Slowest to start. |
| Low income housing tax credits (LIHTC) | Federal credits sold to investors fund construction in exchange for long-term affordability restrictions. | Competitive allocation rounds, so timing depends on the state agency cycle. | Projects that can meet income limits and want deep subsidy. | Income limits may exclude mid-career teachers. Compliance is permanent and administratively heavy. |
| Surplus land and ground lease | The district contributes land under a long lease and a partner develops on it. | Depends on the partner, not the district. | Districts that hold underused sites but no capital. | Requires suitable land, and the land use approvals are the slow part. |
| Private or nonprofit partnership | A developer finances, builds and operates. The district sets eligibility and approves terms, without taking on construction debt. | Depends on the partner's capital and the same permitting path. | Districts unwilling or unable to carry debt or operate housing. | Rents are set by project economics, so they are usually less deeply subsidised than tax credit projects. |
One finding cuts across every mechanism. The Berkeley and UCLA researchers reported that after financing, navigating the land use and building approval process was frequently cited by developers and districts as the biggest obstacle to building education workforce housing, and that navigating land use regulation and permitting was an onerous and uncertain process for most of the districts studied. Financing gets the attention. Permitting is what actually sets the calendar.
Four main routes: certificates of participation, general obligation bonds, low income housing tax credits, and partnership with a developer who brings the capital. Across nine California developments, most projects combined more than one source rather than relying on a single mechanism.
No, but owning a suitable site materially changes the economics and the options. Districts without land can contribute other things a developer needs, including a defined tenant pool and a long-term commitment. Districts with land can contribute it under a ground lease rather than spending capital.
Yes, and this is a real design risk. Low income housing tax credits impose income ceilings that can disqualify mid-career teachers, particularly those with a master's degree or a working partner. A project financed primarily through tax credits may end up serving early-career staff only.
Not automatically. Casa del Maestro in Santa Clara Unified, the oldest project with a public record, has moved from roughly 50% of market rent at opening to about 80% of market today. Districts should set an escalation policy relative to their own salary schedule at the outset rather than after occupancy.
The published California evidence covers districts of varying size, with delivered projects ranging from 50 to 144 units. Smaller districts have historically run much smaller programmes. We have not yet verified small-district outcome data to the standard we apply on this page, so we are not making a claim about it here.
Sources
We are not affiliated with, endorsed by, or in partnership with any organisation cited below.
Learning Policy Institute. (2017). What's the Cost of Teacher Turnover? Published 13 September 2017. Source for the more than $20,000 per new hire figure in urban districts, the 6 of 10 replacement figure, and the 20% beginning and 30% mid-career pay gap.
Learning Policy Institute. (2024). About 2024 Teacher Turnover Calculations. Published 17 September 2024. Source for $11,860, $16,450 and $24,930 per teacher replaced, in January 2024 dollars, and for the stated exclusion of student learning losses. Companion to 2024 Update: What's the Cost of Teacher Turnover?
Tan, T., Wei, W., Carver-Thomas, D., & García, E. (2026). Teacher Turnover in the United States: Who Moves, Who Leaves, and Why. Learning Policy Institute. Source for 15.1% turnover, the 8.0% and 7.1% split, 74% voluntary and non-retirement, and 20.1% against 14.7% by certification status.
Comai, S., Kemper Patrick, S., & Tan, T. (2025). 2025 Update: Latest National Scan Shows Teacher Shortages Persist. Learning Policy Institute blog, 15 July 2025. Source for 411,500 positions, 1 in 8, and more than 6 million students.
Carver-Thomas, D., & Darling-Hammond, L. (2017). Teacher Turnover: Why It Matters and What We Can Do About It. Learning Policy Institute. Source for the estimate that about 90% of annual national teacher demand is created by teachers leaving. Note this is a 2017 estimate.
Bowser, K. (2025). Priced Out: The Growing Challenge of Teacher Pay and Housing Costs. National Council on Teacher Quality, District Trendline, 8 May 2025. Source for home prices up 47%, rents up 51%, beginning salaries up 24% from 2019 to 2025; for the 72 district sample; for 39 of 72 and 34 of 72 unaffordable for beginning teachers; for 18 of 72 and 8 of 72 at ten years of experience; and for San Diego Unified at 45%.
Allegretto, S. (2025). The Teacher Pay Penalty Reached a Record High in 2024. Economic Policy Institute. Source for the 26.9% regression-adjusted weekly wage penalty and the 17.1% total compensation gap. These are weekly wages, not annual pay.
Hinkley, S., & Proussaloglou, E. (2025). Housing California Educators: Insights from Nine Education Workforce Housing Developments. Center for Cities + Schools, UC Berkeley, and cityLAB, UCLA. April 2025. Source for all nine unit counts, the 2 to 6 storey and 18 to 141 units per acre ranges, one-bedroom affordability at or below 30% of entry-level income, financing mechanism by project, the 7.5 year average concept to occupancy, the five year contract to move-in figure, the Jefferson Union 85% and 90% retention figures from that district's 2023-24 Local Control and Accountability Plan, the Casa del Maestro rent trajectory from about 50% to about 80% of market, the halved commute time, the 36% storage and 25% safety satisfaction figures, and the permitting and construction delay findings.
Gottlieb, A., Lagana, M., Spearman, K., & Schoales, V. (2025). We Can't Live Where We Teach: Teacher Perspectives. Keystone Policy Center, August 2025. Source for the survey of more than 3,200 Colorado educators, 58% interest in district housing, and the 70% comfortable with the district as landlord figure, which the report itself notes drew limited responses.
Texas and Florida board decisions reported by: Community Impact and KUT News on Hays CISD; KXAN on Lockhart ISD; Ocala Gazette on Marion County; Taylor Press on Taylor, Texas.
The first two steps in the process above take an afternoon and need nothing from us. If you would rather talk it through, or you want the affordability test run against your own salary schedule, we will do that.
Get in touch →Upward Communities develops workforce housing for public sector employees. We have a commercial interest in this subject and would rather say so here than have you find out later. Everything on this page is sourced so you can check it without taking our word for anything.
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