Board of Equalization hears proposals for workforce housing on public lands

The Board of Equalization held an informational hearing on workforce housing by public agencies focusing on how school districts, community colleges and other public bodies can use surplus land and new financing tools to build affordable units for employees.

The hearing matters because presenters said public agencies hold land that could be used to address teacher and staff shortages, reduce long commutes and fill a gap in “missing‑middle” housing that does not qualify for typical affordable‑housing subsidies.

Richard Barrera, deputy state superintendent with the California Department of Education, told the board that a 2022 study for the California School Boards Association found school districts own roughly 75,000 acres that could be developed and that at moderate density “30 units per acre” could yield about 2.3 million potential housing units statewide. Barrera said only a few hundred units have been completed so far and that many districts lack the predevelopment capacity to move from interest to construction.

Barrera described the main barrier as upfront predevelopment costs and staff expertise. He said many districts need roughly $100,000–$200,000 to complete site surveys, preliminary designs and requests for proposals; he cited Assemblymember Morisucci’s AB 1381 as a proposal to create a $20 million statewide predevelopment pool held at the state treasurer’s office. Barrera said the California Department of Education is “exploring alternatives” and is talking with CalSTRS, labor unions and philanthropic partners to assemble initial funds.

Lee Delgaroff, senior executive director for facilities, planning and construction at San Diego Unified School District, described San Diego’s on‑the‑ground approach. He summarized completed and planned projects, including a 2018 joint‑occupancy ground lease at the Scripps Mesa site that produced 264 multifamily units with 53 units (20%) set aside for district staff, and a former Central Elementary School site planned for about 270 family apartments. Delgaroff said the Central project will serve households from 30% to 100% of area median income (AMI) and that the district’s 2022 Measure U general obligation bond set aside $206 million for teacher/employee housing.

Delgaroff also explained San Diego’s tools: long‑term ground leases, public‑private partnerships, joint occupancy that preserves district ownership, and the use of district bond funds to reach the “missing middle” that often falls outside Low‑Income Housing Tax Credit (LIHTC) eligibility. He gave a construction cost example: a pro forma for one site showed average development costs near $614,000 per unit (including parking), a figure he said is lowered when the land is provided by the public agency.

Holly Framene de Jesus, partner at Lighthouse Public Affairs, provided statewide context on regulatory and financing constraints. She noted the loss of redevelopment tax‑increment financing two decades ago, the fragmented pots of subsidy (rental versus homeownership), zoning and CEQA hurdles in many jurisdictions, and recent legislative changes intended to accelerate infill housing and stabilize permitting. She said public‑agency land should, where possible, remain in public hands and be used to secure long‑term affordability, and she encouraged exploring property‑tax relief, targeted incentives and community land trust or shared‑equity models to promote homeownership for public employees.

Board members and presenters discussed common themes: (1) larger districts can fund some predevelopment work via bonds (San Diego’s Measure U example), but many small and rural districts lack capacity; (2) joint powers authorities or regional housing finance agencies can aggregate land and finance across multiple public owners; (3) mixed‑income projects and family‑sized units (2–4 bedrooms) are important to retain educators with children; and (4) gap financing remains the critical constraint for middle‑income employees who earn too much for LIHTC but cannot afford market rents.

No formal action or votes were taken during the hearing. Presenters and board staff said they will continue discussions with state policymakers and financial partners; Barrera said the Department of Education will keep working to identify predevelopment funding and technical assistance that districts can access.

Board members thanked presenters and indicated plans to monitor related legislation and follow up on models that preserve public ownership or long‑term affordability.

The hearing brought examples of completed projects, specific financing proposals, and a clear list of barriers — predevelopment capacity, capital gaps for middle‑income households, and regulatory obstacles — that the board and presenters identified as targets for policy solutions.