Buena Vista long ago became a second home to Abby Thompson, a mountain refuge her family would return to summer after summer, where the Arkansas River Valley beckoned them to its hills and rapids.
When a position teaching music at Avery-Parsons Elementary School opened up a year and a half ago, Thompson seized the rare opportunity to make her second home a more permanent one. The transition from tourist to resident has been effortless, minus one thing: Overwhelming housing costs have Thompson and her husband constantly wondering whether they’ll be able to root themselves to their newfound community.
“It felt like a dream,” Thompson, 31, said while reflecting on landing a job in a place she deeply loves. “It really felt like a dream. Now the flip side of the coin has revealed itself to, can we even stay?”
That’s the same question gnawing at many educators across Colorado as housing prices remain high above what a teacher’s salary can afford. The problem is well-established: In some Colorado districts, teachers are spending more than 40% of their salaries on housing — exceeding the threshold of affordability, which housing experts define as spending no more than 30% of pretax income on a mortgage or rent. District administrators also report that housing for teachers and school staff is often the factor that makes or breaks a highly qualified candidate’s ability to accept a job offer and stay in their role long term.
Solutions to Colorado’s lack of affordable housing for teachers and other key staff are slowly taking shape, with one new state program designed to offer an estimated 200 low-interest mortgages to rural educators and district staff. Another potential program, part of legislation that Democratic state Sen. Jeff Bridges plans to introduce this week, would allocate funds to districts to build more rental units for their employees.
The pair of programs won’t entirely solve the deficit of affordable housing, advocates of the programs say, particularly as some parts of Colorado struggle with low housing stock. But they might crack open some new ideas that, if successful, the state could scale up so that teachers don’t have to hunt so hard for a place to live.
“We have incredible teachers who deserve better and, especially when you look at our rural resort communities in places from Steamboat to Keystone to Breckenridge, you have teachers competing with billionaires from around the world who want to have a second home in those areas and it’s just never going to be something that they’ll be able to afford without some kind of support,” said Bridges, who represents Greenwood Village and is also a member of the legislative committee that writes the state budget. “What would make a meaningful difference is housing that teachers can afford so that they can stay in the districts where they work, and you reduce teacher turnover, which improves students outcomes, which is better for everybody.”
State would send money to school districts to build rental housing
Under Bridges’ proposal, the state would create a $1.2 billion program called the Building Excellent Teacher and Employee Residences program, or BETER, that would disperse money to districts in need of rental housing for their teachers and other workers, such as bus drivers, janitors and food services staff. The program is modeled in part after the state’s Building Excellent Schools Today program, or BEST, a matching grant program that helps districts tend to critical construction projects and building renovations.
Districts could use their share of BETER dollars to build rental units on their own land, a huge cost savings for any affordable housing project.
About $40 million for the BETER program would come from interest and investment gains from the state’s permanent fund, also known as the public school fund. That pot of money, now totaling about $1.96 billion, is fed by state land trust revenue that is generated mostly by oil and gas royalties each year. The fund, written into the state constitution, is designed to hold education funds for future generations and the dollars in the fund cannot be taken out.
However, the state can tap into the permanent fund’s interest and apply those dollars toward public education. The BETER program would convert the $40 million from interest and investment returns into $500 million through the sale of certificates of participation to private investors. Districts selected for program funding would also have to contribute matching dollars. Districts would pay their share with the rent income they get from their tenants.
The BETER program, open to all districts in the state, would prioritize projects in communities where rents are significantly out of reach for educators, said Mary Wickersham, principal and cofounder of Denver-based Social Impact Solutions and one of the program’s lead architects.
The program helps chip away at two challenges across the state, said Tony Lewis, executive director of the Donnell-Kay Foundation, a nonprofit Denver foundation that funds initiatives to improve education, affordable housing and access to food. In some places, the soaring costs of housing is the central problem, he said. In other places, particularly rural parts of Colorado, there simply isn’t enough housing.
“For districts as a whole, I think it’s a powerful tool to attract new staff to their district because you’re able to actually say, ‘Come and work for us and we have a place for you to live,’” said Lewis, who has been helping craft the policy as part of a bigger effort to tackle rural housing development. “For an educator, I think it’s such a great benefit and it reduces stress so much to be able to get an offer from a school district for a job and to be able to say, ‘I know where I can live in that community.’ That’s a huge relief.”
A board of experts would devise guidelines for the program and districts would have to apply by breaking down the details of their planned development and demonstrating their urgent housing needs.
Districts would also have the flexibility to collaborate with cities, counties and local housing authorities to construct rental housing for other members of the workforce, including city and county employees, nurses, firefighters and police.
A real path to homeownership in rural Colorado
A separate pilot program, folded into a law passed last year, will invest $50 million from the state public school fund into low-interest mortgages for rural teachers and district employees, helping lower their monthly payments and giving them a real shot at homeownership.
The Rural Education Workforce Low Interest Mortgages program will work like this: The Colorado State Treasurer’s office will give a $50 million loan as an investment to Loveland-based Impact Development Fund, a nonprofit bank that hopes to serve as the lender on the project. Impact Development Fund will provide mortgages to rural educators at an interest rate around 3.5%. Educators will be able to purchase a home either on the market or under construction without a down payment. Impact Development Fund, as teachers begin to make payments on their loans, will pay back the $50 million to the state along with interest from the mortgages.
Megan Ferguson, CEO of Impact Development Fund, called the program “revolutionary,” as it carves out funding for teacher housing in a way that’s never been done before in Colorado.
“Being able to bring those resources right back to the local level rather than investing in traditional investments in Wall Street, we’re bringing it back to the community and not only to the community but to the individual’s level, to the employee level,” Ferguson said. “And that’s really impactful.”
Wickersham, who also helped develop the pilot program, hopes mortgages will be available to teachers this summer. The treasurer’s office must first approve plans for the program.
By Wickersham’s calculations, an educator turning to the program instead of relying on current mortgage terms and rates could save about $850 per month, more than $10,000 per year and more than $300,000 over a 30-year mortgage.
She describes both housing initiatives as “a unicorn opportunity” that can usher educators into homes without cutting into the state budget or raising taxes and, consequently, stabilize entire communities.
“There’s a lot of studies that show the relationship between a stable education workforce and student success because affordability impacts teacher recruitment, teacher retention and all sorts of things,” Wickersham said. “If those people can’t afford to live where they work and there’s constant turnover, then what happens is the children’s education is impacted and ultimately we hope to be addressing that.”
“Do we really have to sacrifice all of our personal needs to make a life happen here?”
Some Colorado districts, desperate to find teachers and keep them in classrooms, have already taken housing into their own hands. Byers School District 32-J, 50 miles east of Denver, has 10 apartments and two houses for school staff. Mountain town districts like Eagle County School District and Roaring Fork School District have constructed rental units for educators and other staff and also partnered with Habitat for Humanity to open up a new path to homeownership.
Garfield School District Re-2 in Rifle on the Western Slope is tackling its staff housing challenges from another angle, exploring the idea of a housing stipend. Superintendent Kirk Banghart said the district is in the early stages of determining what that housing support would look like.
Some of his teachers commute at least an hour from spots like Grand Junction where they land affordable housing. Others Banghart hopes to hire end up turning down open positions simply because they can’t find a place they can comfortably live.
Banghart recently watched a new music teacher he hired walk away from the school before even starting, their search for housing leading only to dead ends. Without a qualified music teacher for middle school students, the district had to quickly figure out a new elective and relied on a current teacher to take on a forensic science class.
“I think it’s hard because we never want to have our students miss out on opportunities just due to the ZIP code that they live (in) and the cost of housing in the community that they live in,” he said.
Banghart said he supports both state programs. Housing is far from his main focus, but it’s also something he can no longer ignore.
“Unfortunately, as Colorado has expanded, it’s become something that has become critical in order for us to meet our primary mission, which is to educate students,” Banghart said.
Not everyone believes sending money to districts for rental units is the right approach.
Buena Vista School District board member Brett Mitchell, also a local real estate agent, sees firsthand the staggering gap between the cost of a house — the average home price in the area is $550,000 — and the realistic amount a teacher could set aside for a home. But even as teachers’ housing options become more limited, Mitchell said it’s unreasonable to throw housing into the mix of responsibilities school districts must carry.
“Teacher housing is a huge deal,” Mitchell said, “but we’re so underfunded in the state for our schools right now that that’s a situation that is almost impossible for me to understand how we can manage that too.”
The district, which spends 80% to 85% of its budget on staff pay and benefits, mostly relies on a word-of-mouth network to help new teachers locate an apartment or house.
The state’s new low-interest mortgage program is the best solution Mitchell said he has come across, a viable way to unlock new housing opportunities for rural educators.
“Teachers can actually afford to get into a house and do it right away because they don’t have to save for 10 years for the down payment,” he said, calling it “a game changer.”
But Mitchell doesn’t want to see districts turn into landlords, and he argues those dollars instead should go toward more low-interest mortgages that would give teachers “an anchor” to their school and set them up to build equity.
Wickersham counters that teachers and school support staff at different points in their careers and in different parts of the state need a variety of housing options.
A house might not be the right choice for a brand new teacher not yet ready for a mortgage or for any teacher in Aspen, where the average home price exceeds $4 million, Wickersham said.
“The mountain communities right now are clamoring for rental housing,” she said. “Not every solution is right for every community and you’ve got to be able to have more than one tool in the toolbox.”
The financing mechanism that the BETER program would use to construct rental units can’t be applied to houses, she added.
Thompson, the elementary school music teacher in Buena Vista, and her husband, Tucker Smelley, are ready to start a family and firmly settle into the town where she said they will “do anything to stay.” The housing search, though, weighs on them at all hours, often the main conversation at the dinner table as they pore over their financial spreadsheet and frantically crunch numbers.
They don’t want anything more than the basics: a single-family home that won’t eat up so much of their income, and a yard for their dog. Together, Thompson and Smelley, a paramedic with Chaffee County, earn about $121,000 a year. They both juggle side jobs to pad their budget.
The couple lucked into a rental house where they pay $900 per month with the understanding that their landlords will come stay four to five days every month.
They keep close watch for new places that pop up on the market, but the options are scarce. One contender is a 700-square-foot house, without a yard, that needs renovations and a lot of upkeep. The home price has fallen to $425,000, which is much less than the $769,000 median home price in the county, but still would take more than 40% of their monthly income to cover the mortgage, Smelley said. Another new house on the market is listed at $525,000. It’s an older home but the kind of place they could grow into with a family — for more than half their monthly pay.
“We’re tied to this community,” Smelley, 33, said. “Do we really have to sacrifice all of our personal needs to make a life happen here? Hopefully not.”
The low-interest mortgage program could be the answer they’ve been waiting for, the key that finally turns.
“It’s really stressful to think, am I going to have to put my whole life on hold to build a life here?” Thompson said. “Do I have to press pause to start the rest of my life here? Or the alternative is, do we have to move somewhere else?”