Public school enrollment in California is gradually declining, leaving school districts with financial woes as well as underutilized buildings and land. However, selling school property requires a committee process and approvals, in part to protect taxpayer dollars and the needs of the community. Regardless of the process, the inefficiency of maintaining underused property during a real estate boom makes exploring the possibilities worthwhile.
Evaluating Your Assets
Before rushing to any decisions with your school’s real estate, it’s a good idea to commission a formal analysis of the properties in question. As a school district, you can solicit a Request for Proposal (RFP) for this evaluation. This will give you an idea of what different entities can offer in the way of advice and expertise regarding your real estate. DCG Strategies has worked with several school districts after being selected through an RFP process, including the Hayward Unified School District.
Once you choose an expert to help with your analysis, they should be able to provide a valuation of the property(ies), ideas for alternative land use, highest and best use, and property recommendations, among other things. Be clear about your district’s mission as you discuss possibilities. Do you want to simply earn the most income possible by selling? Is there a type of property you need that you might be able to procure with a land trade? Are there any potential partnerships with the city or other organizations that might be beneficial to your community? Examining all the available opportunities will allow you to make the best decisions for your district.
The 7-11 Committee Process
Districts that would like to sell or lease excess property have to form a committee of seven to 11 members that represents specific interests in the community, as well as ethnic and socioeconomic demographics. The process is outlined in sections of California’s education code that were written in 1996. After the committee is formed, it must hold hearings to gather the opinions of other community members, as well as compile a list of priorities for the use of each site and write a final report. Some school districts find ways around these restrictions through a real estate trade, but the former school sites are still subject to zoning restrictions by the relevant city council.
In 2018, two exemptions were added: for those properties being leased to private summer schools and those leased or sold to use as employee or teacher housing.
For school districts that struggle with recruiting and retaining quality employees — a common problem in expensive cities like San Francisco — workforce housing might be the answer. Selling a property to develop affordable housing for teachers is exempt from the 7-11 Committee Process, meaning progress can be made much more quickly and easily on an unused site. There are other incentives to building workforce housing, too, such as the Teacher Housing Act of 2016 (SB-1413). This allows school districts to restrict occupancy to teachers and employees while still receiving local and state funding designated for affordable rental housing. Add in the myriad benefits of teachers living in the community where they teach (less stress, more time freed up from long commutes, a sense of unity with the area), and you have a winning solution.
No matter which solution is right for your school district, whether it be a workforce housing development, an outright sale, or simply a proactive evaluation for the future, DCG Strategies can help you navigate the process of making it happen. We have lots of experience working with school districts and are familiar with both their unique restrictions and rewards. Contact us here for a consultation.