The Bay Area’s super-costly housing market has made it hard — sometimes impossible — for schoolteachers to put down roots and buy homes near their jobs.
Now, the Chan Zuckerberg Initiative is giving $5 million to a fund that will help educators in three San Mateo County school districts make down payments on houses.
The philanthropic initiative founded by Dr. Priscilla Chan and her husband Mark Zuckerberg, chief executive of Facebook, is partnering with San Francisco startup Landed.
The startup pays up to half of a 20 percent down payment — 10 percent of the cost of a home — for educators, with zero interest or monthly payments. The assistance maxes out at $120,000 per participant. It is meant to create a stepping stone toward home ownership in the nine-county Bay Area, where the median price of a single-family house hit $800,000 in April, an all-time high.
“This gives people a pathway,” said Alex Lofton, who co-founded Landed in 2015. “We totally acknowledge that the other 10 percent they have to bring (to the deal) is still difficult. But it makes it more achievable. It creates hope.”
The program is expected to assist around 60 educators in the Redwood City, Ravenswood City and Sequoia Union High School districts — all in San Mateo County, where the median cost of a single-family home reached a new peak of $1.4 million in April. With many teachers and staff commuting long distances from more affordable markets in the East Bay and even the Central Valley, the program offers a “leg up” for those desperate to crack the market closer to their classrooms, said John Baker, Redwood City School District superintendent.
“It’s getting your foot in the door,” he said. “And that’s really important to people who are committed to being educators and committed to their students, and who want to be truly engaged with their students. It’s a real plus — what a wonderful way to have a career and to have a home near the town where you work.”
Educators in the three school districts already are inquiring about the assistance, said Lofton.
Often, he explained, assembling the funds for a 20 percent down payment is the most difficult challenge for first-time homebuyers. Recognizing that hurdle, Landed — with funding from different investors — began in recent months to assist educators in the East Bay and in the Los Altos and Mountain View-Los Altos school districts.
As an example of how the program works, he cited someone who wants to buy an $800,000 home. Landed would supply up to $80,000, or half of the $160,000 down payment. If the home were to be sold a few years down the road, the homeowner would keep 75 percent of the value of its appreciation, with the other 25 percent being reinvested in the assistance fund. (Likewise, if the home loses value, the homeowner would shoulder 75 percent of the depreciation, while the fund would absorb 25 percent of the loss.)
“I’d been a really conscientious saver ever since I graduated college and started working,” said Joel Key, principal of the middle school at Impact Academy of Arts and Technology, a public charter school in Hayward. Yet over the past 12 years, he was unable to put together an adequate down payment to buy a home. All the while, he rented apartments; his most recent one-bedroom flat cost him $2,100 monthly in Oakland near Lake Merritt.
The rental on that same apartment was about to rise to $3,100 monthly late last year when he heard about Landed and applied for assistance. He received $58,000 toward a $116,000 down payment on a one-bedroom condominium selling for $580,000 in Oakland’s Fruitvale neighborhood. He closed the deal and moved in the day after Christmas.
“I’d been feeling that there wasn’t going to be a way into the market at all,” said Key, who grew up in Los Gatos, his father a longtime teacher and counselor at Independence High School in San Jose. The assistance program “made it possible to buy a place near my job where I could feel like a proud owner. Instead of moving to Arizona or Idaho, I’m right here where I want to be. And I don’t have any intention of moving.”
