Barnes said lenders typically assume a homeowner can afford a mortgage payment one-third their monthly income. Many teachers tire of the cost of living and leave the area, often for areas with comparable salaries and more affordable homes. We'd like to make it easier to buy a house and stay here. The bond returns a below-market rate of interest. The city invests the money at a higher rate.
Teachers return the money after five years or when they sell their home.
The district also is building an apartment complex for new teachers that is scheduled to open in 2002. Barnes said the details of the plan had to mesh together slowly as no models existed to copy. It may not be long, however, until other districts follow Santa Clara's lead. Joe Rudnicki, superintendent of Sunnyvale School District, said the district is attempting to mitigate housing costs. He said the district already has trouble retaining teachers, a problem he only sees as becoming worse.