Creating sustainable housing solutions for faculty and staff is not a new challenge for independent schools, especially in expensive housing markets such as the Bay Area. Nor are shared appreciation models to help finance down payment assistance for home buyers an entirely new approach to this dilemma. In fact, over the past three decades, several Bay Area independent schools have established successful shared appreciation programs, despite the difficulties of designing and managing these programs themselves.
At Landed, we believe that sharing the costs, risks, and investment benefits of homeownership between educators and their communities enables educators to buy homes near the schools and communities that they serve. We created our program in part by observing the successful models already established at independent schools, codifying best practices from their experiences, and building a replicable model that reduces the financial, legal, and administrative burdens of managing these programs independently. Learning from the experiences of pioneering independent schools has been, and is, critical to our approach.
Lick-Wilmerding High School
In the late-1990s, the leadership at Lick-Wilmerding High School in San Francisco sought to get ahead of the curve of the housing crunch during the first dot-com boom that was making it increasingly difficult for their faculty to afford housing. They dedicated time towards exploring the full range of housing options, including buying apartments and rental subsidies, but discovered that their employees were most interested in homeownership. This led Lick to create a shared appreciation down payment assistance program by investing approximately one million dollars from their endowment for this purpose. The program provided half of the down payment on a home in exchange for a portion of the appreciation in the value of the home, and was open to all faculty and staff. They partnered with a bank to provide homebuyer education. Over the next decade, approximately a dozen faculty and staff members took advantage of the program to purchase homes within a commutable distance of the school’s Ocean Avenue campus.
“There is no doubt in my mind that our program gave a lift to faculty and staff morale. Seeing colleagues buy homes with the support of the school was a very positive shot in the arm.” -- Al Adams, Former Head of School, Lick-Wilmerding High School
Town School for Boys
Following Lick’s program, the leadership and Board of Trustees at Town School for Boys also decided to create a shared appreciation mortgage (SAM) assistance program, and borrowed many program features from the structure established by Lick. The Town program had up to seven teachers using the program simultaneously, and as some faculty sold their properties, the funds were recycled and others were able to take advantage of the program.
“As challenging as it was for the school to maintain its own SAM program - given the legal, financial, and managerial obligations to the school - the impact of homeownership for teachers and staff has proven invaluable.” -- Brewster Ely, former Head of School, Town School for Boys
In the late-1990s, around the same period that Lick-Wilmerding established their program, the Menlo School also spearheaded the creation of a mortgage assistance program. This program was modeled off of Stanford University’s successful Mortgage Assistance Program (MAP), in which faculty members are given a second mortgage loan with a low-interest non-amortizing Current Interest rate payable during the life of the loan, and Deferred Interest (based on property appreciation) due, along with principal, upon the sale of the home, end of employment at Menlo, or refinancing of the first mortgage. The loan has no fixed term. Unlike the shared appreciation program at Lick, Menlo’s program charges a current interest rate, but takes a smaller share of the appreciation in the value of the home. Menlo’s program typically helps 1-2 staff members buy new homes each year.
Landed has built a shared appreciation program that incorporates many of the best features of these programs, to create a sustainable and replicable program for independent schools. Created in 2016, Landed’s program is currently operational at the Nueva School and is poised to expand to other independent schools in expensive metropolitan housing markets across the country.
In order to establish a fund, school leaders partner with Landed to provide the community capital, and promote program awareness among teachers and staff. The community capital can come either from individual investors (parents, alumni, local philanthropists, etc.) or directly through a school’s endowment. Once a fund has been capitalized, the school invites Landed to campus to connect with staff and provide homebuyer education workshops.
Under this model, Landed takes care of all of the administrative burdens of the program - lender partnerships, realtor partnerships, legal support, homebuyer education, etc. - and ensures that the program is well maintained over time. This allows schools to focus on what they do best: educating students and engaging families in their communities.
Independent school leaders have endorsed this approach. Al Adams and Brewster Ely, the Heads at Lick-Wilmerding and Town during the periods when those schools programs were established, now serve as advisors to Landed. They support Landed because they understand from experience both the benefits of shared appreciation programs and the challenges of running such a program internally at a school.
If you have questions about Landed or are interested in bringing our program to your school, please contact us at [email protected].