A growing number of Central Texas school districts are seeking affordable housing options for their staff amid rising expenses.

The average rental rate in the Austin and Round Rock area has increased by 24% since 2020 despite decreasing in recent months, said Monica Medina, president and CEO of Austin Housing Conservancy. Meanwhile, the average teacher does not make enough income to qualify for the average rent for a two-bedroom apartment, she said.

Lake Travis ISD and Eanes ISD officials told Community Impact district pay raises have not kept up with growing housing costs, leading many teachers to live outside of where they work. In June, LTISD adopted its lowest compensation increase for staff in over a decade at 1%.

Weeks prior, the LTISD board of trustees voted to form a public facility corporation, or PFC, that could partner with a developer to offer employees rent- and income-restricted apartments. LTISD along with EISD and Austin ISD have formed PFCs in the hopes of recruiting and retaining more staff after years of increased vacancies.

By the numbers

Average rent for a two-bedroom apartment: $1,757

Qualifying salary for an average two-bedroom apartment: $74,000

Average teacher salary in:
  • Lake Travis ISD: $64,210
  • Austin ISD: $60,392
  • Eanes ISD: $59,592
Sources: RealPage Apartment Market Report, Lake Travis ISD/Community Impact

How it works

Districts can own and lease land to a developer while providing them with a 100% property tax exemption. In exchange, a developer must reserve a certain number of units for those making 80%-60% or less of the area median income, or AMI, which is $126,000 in the Austin and Round Rock area, according to the U.S. Department of Housing and Urban Development.

Districts may generate revenue under the PFC through various fees, annual ground lease rent payments and a portion of sales tax savings for new construction, Shackelford Law Associate Attorney Kara Hargrove said.

AISD plans to build a 600-unit housing complex at its Anita Ferrales Coy Facility with construction expected to start in summer 2025 pending city approval, AISD Director of Real Estate Jeremy Striffler said. Any revenue received from the PFC will go toward building a new alternative learning center at the site, he said.

Beyond incentivizing staff to stay in the district, the PFC may also allow for new revenue streams, EISD Superintendent Jeff Arnett said.

“In the current financial condition of public education and school districts being more constrained by less funding, any opportunity that we might have to generate additional revenue, even if it's a modest amount, is interesting to us,” Arnett said.

Upon receiving approval from the Texas Secretary of State, EISD and LTISD hope to begin meeting with potential developers, district officials said. EISD wants to update its staff next school year while LTISD is aiming to offer staff housing options by 2025, Arnett and LTISD Superintendent Paul Norton said.

In 2023, Texas Lawmakers passed House Bill 2071, which heightened affordability requirements for developers and placed restrictions on where PFCs can operate, Hargrove said. Although Hargrove said these changes have made developers more hesitant to close deals, Norton and Arnett said their districts have been approached by several interested parties.

The process
  • Local government entity creates a PFC
  • Developer proposes mixed-income housing
  • If approved by PFC, developer attains financing from banks or lenders
  • PFC takes ownership of land and leases it back to developer
  • Developer builds housing
A PFC provides a tax exemption allowing a developer to rent units below market rates, including:
  • 40% of units reserved for those making 80% or less of the AMI
  • 10%-25% of units reserved for those making 60% or less of the AMI
  • Rent is restricted at 30% of those AMI levels
Sources: Texas Affiliation of Affordable Housing Partners, Shackelford Law/Community Impact

The bottom line

Many districts have looked to affordable housing in what has been a challenging time to hire certified teachers and employees, said Cheryl Hoover, senior human resources consultant for the Texas Association of School Boards.

“School districts are using this as a recruiting tool because it’s very competitive out there during this critical staffing shortage,” Hoover said.

LTISD said they officials hope to retain teachers with workforce housing as it cannot provide larger pay raises amid a lack of state funding, Norton said. In EISD—where the average home price sits around $2 million—the cost of housing is outpacing compensation increases, Arnett said.

Amid high housing costs, LTISD, EISD and AISD officials said many staff members are living outside of the district and making long commutes.

“We can't afford to lose good employees, and if there's something that we can do to just make the cost of living more affordable, ... then we need to explore those options on their behalf,” Arnett said.

This school year, Round Rock ISD has partnered with the Texas Workforce Housing Foundation to provide discounted monthly rental rates to 37 staff members with an ability to serve up 100 employees, RRISD Superintendent Hafedh Azaiez said.

Additionally, AISD has partnered with the Austin Apartment Association to provide discounted rent, worked with Habitat for Humanity to build staff homes and held events to educate community members around becoming homeowners, Striffler said.

“This will allow teachers and staff the chance to live in the community they serve and all parts of the district remain fully staffed, which is really key to the educational experience for our students. ...” Striffler said.

Put in perspective

  • 81% of staff who reported living outside the district said they wanted to move into the district.
  • 56% expressed interest in workforce housing through LTISD.
  • 11% reported living within 20 minutes of work.
  • 66% of staff identified as cost-burdened.
  • 53% commute over 20 minutes to work.
  • 43% had a household income less than $60,000.
  • Over 60% of staff expressed interest in workforce housing.
Sources: Austin ISD, Eanes ISD, Lake Travis ISD/Community Impact