Jess Zhao, the head of customer experience at Landed, a start-up based in San Francisco, stood in front of the stage in the DeJean Middle School’s multipurpose room in Richmond on Monday afternoon. “Who in the room has owned a home in the past, or currently owns a home?” she asked. Few people in the audience of about 150 teachers and staff members from the West Contra Costa Unified School District (WCCUSD) raised their hands. “Everyone else is first-time home buyers?” Zhao continued. Now, most of the audience members raised their hands.
Zhao was introducing a “down payment assistance program” at the WCCUSD Educator Housing Fair. The program was being launched by Landed and school district that day to help the school district’s employees buy homes. “We partnered with the district to provide down payment support, so that helps educators,” said Nikki Lowy, the head of engagement at Landed. “They can build financial security, build wealth, put roots in the community that they serve.”
The program provides half of the down payment when customers buy a home, up to $120,000 per household. In return, the teachers must share with Landed 25 percent of the gain or loss on the value of the home when they sell or refinance it. The customers can choose to exit the partnership with the Landed at any point over 30 years—that’s when the company gets their share of the home’s appreciation or depreciation value. At this time, the customers also have to repay the money they received for the down payment.
For example, if a customer buys a home that costs $500,000, the person typically needs to pay 20 percent of the total cost as a down payment—in this case, $100,000. Landed would provide $50,000, half of that down payment. “This $50,000 is not a loan,” explained Zhao. “However, it is also not a gift. It is a shared investment.”
Next, suppose the house’s value went up to $600,000 after its purchase. Then, when selling or refinancing the house, the customer needs to give Landed $25,000, which is 25 percent of the gain ($100,000), along with $50,000—the original money given to them by the company to make their down payment. Unlike a typical bank loan, Landed does not charge interest on this money, nor does the client make monthly payments. Instead, they pay it all back at once.
The program is part of an effort to recruit and retain Bay Area teachers. The WCCUSD has hired over 800 teachers, but has lost about 15 percent of its teaching force each year over the past four years, according to the district. In an effort to help combat its turnover challenge, the district is exploring a number of options like the partnership with Landed to assist in retaining its educators. “The cost of housing makes it harder for any district to retain and recruit their staffs,” said Lowy. “We began the conversation [for the program] a year ago, and they are looking at a number of solutions to support their staffs.”
Landed is a brokerage company that was founded in 2015 with a mission to help “essential professionals” build financial security through means such as buying homes. There is no strict definition of “essential professionals,” although the company focuses on public servants who work in public safety, security and education. The company manages the “U.S. Educator Housing Fund,” which receives investments from other foundations. The fund’s capital is solely used for the down payment support program for educators around the country.
This program is available to all teachers, administrators and staffers who work for WCCUSD and commit to staying with the school district for at least two years and who can contribute their own 10 percent to the down payment. Employees who are interested in the program can fill out an interest form on the Landed website so that the company’s staff can get a sense of what their customers’ personal situations and housing goals are.
The school employees who came to the fair said that financial constraints are a major challenge for them in buying homes. “My pay is not good enough to just move anywhere. That’s the challenge” said Tyra Roberson, the school community outreach worker at Stage Elementary School. Roberson has been living in her mom’s rented house with her two kids, but her mom plans to move to Las Vegas in August. “I needed to find something quick,” she continued. “I’m trying to get something, but it’s hard.”
Houses in this area sell for a half million dollars, pointed out Jason Baena, a teacher at Tara Hills Elementary School in San Pablo. “If you get a lower [price] to like $300,000, it’s not livable or it’s in an area that has a high crime rate,” he said. Baena has been searching for a place where he can live with his wife and two kids since last November. He hasn’t found an affordable home yet. “I think the challenge is our salary is not enough to buy a half-million-dollar house,” he said.
Along with the Landed, WCCUSD’s other partner organizations—Richmond Community Foundation, Richmond Neighborhood Housing Services, SparkPoint Contra Costa and CalHFA—joined the fair by setting up their own tables and presenting information on financial planning for home ownership.
“I didn’t have any information. Everything is new,” said Erica Sandoval, a secretary at Tara Hills Elementary School. She lives in Vallejo and hopes to move closer to her workplace. “I spoke to a family realtor before, but we didn’t move forward with anything,” she continued. “The difficult thing was [knowing] where to start—knowing where to go, who to talk to, what is needed to buy a house.”
“I know not everyone would be prepared for the different programs we have, but we just want to try to introduce you as many things as we can,” said Matthew Duffy, the WCCUSD’s superintendent in his welcoming remarks. “We’re so proud of and honored that you continue to choose us to work for us. That’s what it is about.”