Despite deciding against placing a bond measure on the ballot two years ago, the Monterey Peninsula Unified School District is continuing to pursue affordable housing options for its employees.
The district’s superintendent, PK Diffenbaugh, updated the community on potential future pathways for the project at Tuesday night’s board of education meeting.
Diffenbaugh explained that building affordable housing really boils down to three elements: land, water and financing. He said that while the district owns several potential employee housing sites that are also within the Marina Coast Water District, financing the project is the main issue.
“The question is, ‘Why can’t you do this? ’” Diffenbaugh said. “We hear about affordable housing being built all over and why can’t we build affordable housing for our staff?”
The answer comes down to an issue Diffenbaugh called “the missing middle.” Tax credits — which are usually used to fund affordable housing projects — proved infeasible for the district.
“Teachers and the majority of staff make too much to qualify for most tax credit funded affordable housing,” he explained. “And yet too little to be able to afford many of the homes on the Peninsula and the rent. So that’s why the tax credit deal makes it difficult.”
Instead, Diffenbaugh presented several options the district could pursue to finance the project. These included: taking out a certificate of participation (essentially a loan where the district uses a facility as collateral), using a parcel tax, selling unused district-owned property, partnering with other municipalities on joint financing or using a facilities bond to fund the project.
A parcel tax would tax a set dollar amount per parcel of real property as opposed to assessed value. Unlike a bond — which needs 55% of voters to approve the measure and is paid off through an increase in property taxes — a parcel tax needs two-thirds of the vote to pass and the money is collected every year for the life of the tax.
While a parcel tax generally generates significantly less revenue than facilities bonds, it has more flexibility in how the funds are used.
Previously, the board voted against putting a bond measure on the November 2020 ballot that would have financed building rental housing for teachers and district staff. The proposed bond measure would have been for $60 million.
The board voted 4-3 in favor but needed at least one more vote in favor to reach the necessary two-thirds supermajority to pass. Bettye Lusk, Debra Gramespacher and Tom Jennings voted against the resolution, citing the $82,500 cost of putting the measure on the ballot and the unlikelihood of it passing due to the recession.
At Tuesday’s meeting, Diffenbaugh said that because of the high costs of the project, he believes the most viable funding options are a facilities bond or a certificate of participation because both options can generate a lot of revenue.
“The two issues that I think a bond-funded teacher housing development could address are recruitment and retention,” agreed board President Amanda Whitmire. “We know the cost of living here is so high, we struggle to hire teachers, we lose over 100 teachers a year because people can’t afford to live here.”
Community feedback on the project at the meeting varied. While most of the public and board agreed that affordable housing for district staff and teachers is necessary, many expressed concern over the problem of financing.
“Though we do need urgent housing, and this is a big initiative, one of my main concerns is how much is this going to cost to put on the ballot and get the political will behind it,” said community member Karla Lobo. “I would like to revisit affordable housing but on the spectrum of working with our local cities so that we can best fit this where the bill is not wholeheartedly taken on by taxpayers.”
“It just kind of feels like the solutions that are being considered are all over the place,” said Renee Flanders.
Others expressed frustration at being in the exact same stage of the project two years after the board voted against putting a bond measure on the November 2020 ballot.
“The voter polling that we had done back in 2019 showed incredibly strong — unprecedented strong support from our voters in the region to support a bond for employee housing for the district,” said county Supervisor Wendy Root Askew, who was on the MPUSD board in 2020. “If we would have been able to move forward with that initiative back in 2020, we would be close to welcoming teachers into those units today.”
The district organized a survey in 2019, which found that 52% of certificated teachers said they would like to live closer to work — with 83% stating the reason they don’t live closer to work is that rental and home prices are too expensive.
Diffenbaugh said the next steps include resurveying district staff and teachers to receive updated responses. When asked what it would take to move a facilities bond onto the ballot, he said the earliest he believes the district could bring the measure before voters would be June or November 2024.