'Locked Out' Part 3: Plugging The Brain Drain

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(Sacramento, CA)
Tuesday, April 26, 2005

Sacramento State President Alexander Gonzalez says the current housing market is scaring away potential faculty. "Well, I think we’re in a crisis situation here in Sacramento, really across the state. Faculty housing is really becoming the number one impediment to recruiting the best faculty that we can get from across the country."

Prospective hires from the mid-west or the east are used to see houses list for under $150,000. But Gonzalez says when they come to Sacramento for a job interview, they get a reality check when they see Sacramento’s median price is around $360,000. "A lot of potential faculty see wages are a little higher in California, that’s great, but they have no idea until they get here what it costs to have a house."

And he says there’s a looming danger of a faculty shortage at the university. "We’re right at a wave of faculty who are retiring and I think what we’re going to see over the next five to ten years is a turnover of most of the faculty that were here during the earlier days in the ‘60s and ‘70s."

So with the need for new faculty and a demand for affordable housing, Sacramento State has decided to get into the home building business. But with no room on campus to build, university officials had to look around for a site nearby. They found 25 acres on Ramona Avenue, about 1 1/2 miles away from the university. The property is owned by the state, it’s the former site of a California Youth Authority facility.

Sacramento State’s vice president of capital planning Matt Altier says they have ambitious plans for the spot. "Once we obtain the property we’re going to go in and tear everything down that’s there, put in the infrastructure and what we’d like to build is an actual village for faculty and staff housing that will have a lot of pedestrian walkways, it will have some retail and we’d like to make the majority of if affordable and that’s of course why we’re trying to do this, so we can attract quality faculty and staff to the campus."

Altier says they’re basing their village on what other universities have done. "What we’re doing with this property is basically following some existing models of other universities, both UCs and CSUs. UC Davis, they have an Aggie Village and they’re expanding that, again same reason, they’re having the same problems we are."

UC Davis’ Aggie Village has become a model for other universities around the country. It’s a small neighborhood of faculty and staff - 21 houses and 16 townhomes on two-square blocks adjacent to the university. Geology professor Peter Schiffman and his wife have been living there since it opened. "We moved in eight years ago, we were one of the first people to move into Aggie Village."

Schiffman says they were immediately attracted to the quaint neighborhood with its narrow streets and Victorian and Mission style homes complete with front porches. And he says after eight years, Aggie Village has lived up to their expectations. "We just went on faith that it would be a nice community and it really has been a wonderful community. It’s not just the homes, the homes are well-built. I think it’s the sense of community that we all love. We all know our neighbors, we see them all the time, we’re on the street, we’re on our porches and the other thing that we all love I think is the fact that we don’t need to use our cars very often. We have single car garages. We walk. I can walk to work, I can walk downtown. That’s a wonderful thing to be able to do in this age not to have to commute with a car."

Aggie Village homes sell for about 30% below market price. The way it works is a faculty member buys a house but leases the land. UC Davis’ assistant vice chancellor for campus planning Bob Segar says the ground lease amounts to about $100 a month. "And what that ground lease does is that forms a contract with the homeowner and the university and that’s the mechanism that we use, first of all to make sure it goes to university related people and second of all to put the other C C and Rs into in place that control the appreciation and have the other stipulations included."

Aggie Village resident Peter Schiffman says the only drawback is that the value of their home isn’t keeping up with the rest of the market. And that’ll make it hard if they want to resell. "I think the concern is not so much for people like myself who is going to retire in five or ten years but for young faculty who might buy into the homes, have a large family, outgrow the house and then want to buy another home in Davis and find that they don’t have the equity to buy another home in Davis because their home is being bought back by the university at a value that’s well below market value. So that’s a concern I think all the neighbors share about the way it’s structured."

Still, UC Davis planner Bob Segar says Aggie Village is a success with a long waiting list of people who want to buy a home there. "So the tradeoff is you get to live close to the campus, in the local community, for below market price and the tradeoff is the controlled appreciation. I mean the issue now is it’s full, so there’s only a very rare opening in Aggie Village and that’s part of why we’re looking toward the West Village project."

West Village is expected to break ground about 1 1/2 years from now. The new neighborhood is planned west of Highway 113 and Segar says it’ll be a lot bigger than Aggie Village. "West Village will have about 500 faculty staff units and housing for up to 3,000 students and it’ll have a village square and a community center so it’s really trying to take all these different housing needs and put them together and create a community setting that’ll benefit everybody."

If all goes as planned, the first units will open in the spring of 2008. Meantime, Sacramento State’s Matt Altier says they’re still negotiating with the state to buy the land for their faculty village. He says once it’s built they’ll use the same financial arrangement as UCD’s Aggie Village, selling the house to faculty but owning the land. "That’s what makes it affordable and by keeping a cap on how much it can increase in market value is what makes it affordable five or six years from now to the next faculty member moving in."

And he says by using that model, they’ll be able to continuously recruit faculty from around the country who want to fulfill the American dream of buying a house.