Public school teachers in the District will be able to get help paying for a home in an initiative announced Wednesday that aims to put property ownership within reach of government workers even in booming cities that are increasingly unaffordable.

Mayor Muriel E. Bowser (D) announced a partnership with Landed, a San Francisco start-up that helps teachers pay half of their down payment up to a maximum of $120,000.

In exchange for buying in the District, teachers would have to repay the down payment when they sell the house, and Landed would get 25 percent of any increase in the home value. The start-up would absorb 25 percent of any loss sustained in a sale.

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The median home price in the District was $570,000 in 2018, according to Bright MLS, a real estate listing service.

Bowser said fewer than half of the city government’s 37,000 employees live in the District.

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“The city has to play a part in keeping people of all incomes in the city,” Bowser said. “The vibrancy of our city depends on it, and the quality of our classrooms depends on it.”

Economically thriving cities such as the District are grappling with making homeownership feasible for educators in the communities where they teach. City leaders don’t want teachers decamping for school systems in more affordable cities when they are ready to purchase a home or have children.

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In Northern California’s Silicon Valley, the Santa Clara Unified School District rents housing units to teachers at below-market rates. The East Side Union High School District in the San Jose area is exploring a controversial plan to transform district property into affordable rentals to attract teachers to the expensive city. Voters will decide on the proposal in March.

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Landed — whose investors include the Chan Zuckerberg Initiative, started by Facebook founder Mark Zuckerberg and his wife, Priscilla Chan — says it has helped more than 250 teachers on the West Coast and in Denver purchase homes.

The District, where teachers in the traditional public school system are among the highest paid in the nation, is Landed’s first partnership on the East Coast.

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Council member Elissa Silverman (I-At Large) agreed the city should be ensuring teachers have the opportunity to live in the District. But she believes a private company should not profit off the home-sale price. Instead, she said, the profit from a sale should be used to alleviate rising costs for the next middle-income resident who wants to purchase it.

“Certainly, we want to make sure that teachers can buy homes in the city,” Silverman said. “My concern is that there might be ways for us to do it where the equity can stay in the house instead of go to the company.”

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All employees in traditional public and charter schools in the District are eligible to purchase a home with Landed’s help. Employees in the traditional public school system’s central office also qualify.

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When an employee purchases a home, Landed has a secondary lien on it. The buyer can purchase Landed's equity in the property at any time, giving the company 25 percent of any value increase based on an appraisal.

Alex Lofton, co-founder of Landed, said the program is ideal for employees who are able to pay a monthly mortgage but struggle to raise enough cash for a down payment. In the District — where the teacher retention rate is lower than other urban school districts — prospective buyers often need a 20 percent down payment to be a competitive bidder.

“Helping great educators become homeowners keeps them in their classrooms and connected to their communities,” Lofton said.

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The initiative announced Wednesday is the District’s latest effort to keep city employees and middle-class residents in the city. The partnership does not cost the city any money.

Bowser this year proposed spending $20 million to spur development of homes for families earning up to $141,000 a year. But the effort was controversial, with some residents and activists questioning whether the city should be subsidizing home purchases for middle-income residents when so many people are homeless or living in decrepit housing.

The D.C. Council thwarted the proposal, but Bowser invoked the failed plan at a news conference Wednesday conference and said she still wants it to happen.

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Bowser said the partnership with Landed would complement existing programs intended to help residents purchase property.

Lorrie Cariaga — a first-grade teacher in the Los Angeles suburb of El Segundo — said she and her husband had been living in a cramped townhouse with their dog and three small children. She wanted a bigger space, but couldn’t afford the necessary 20 percent down payment on the $721,000 home she hoped to purchase 15 minutes away from her school. But she sold her townhouse, put down $72,000 and Landed matched it — giving her a competitive offer.

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“The prices here are skyrocketing with all the tech companies moving in, and people have the money to purchase so you are dealing with a competitive market,” Cariaga said. “Homes are close to a million dollars here, and teacher salaries are not.”

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Tiffany Choi, president of the Denver Classroom Teachers Association, said she doesn’t know any teachers who have purchased a home through Landed in Denver. But she said the solution should be to pay teachers more, not partner with a program that attempts to make housing more affordable for educators.

“Any program that offers affordable housing for teachers may have good intentions, but ultimately is an insult to the profession of teaching because the real solution would be to pay teachers a living wage like other professionals,” Choi said.

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