CA schools chief Tony Thurmond's plan to enter the real estate game

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** Those who can't teach become real estate developers
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Dear John,

Presiding over the decline of California’s public schools ain’t enough, so California schools chief Tony Thurmond wants to enter the real estate game, building 2.3 million homes on public land for the benefit of teachers.

He’ll fail in that endeavor. But building millions of homes for teachers isn’t really Thurmond’s goal. His real purpose in announcing this bold plan is more likely to distract our attention from electrifying failures in California’s public education system by claiming there’s a teacher shortage — the solution to which is government-subsidized housing.

Thurmond was first elected State Superintendent of Public Instruction in 2019. In the five years since then, student achievement has dropped ([link removed]) (only a third of our kids can now read and do math at grade level), student enrollment has declined ([link removed]) , and local school district officials (now confronting massive retirement debts ([link removed]) ) are beginning to search their pants for loose change — and to search your pants too, with proposals for exotic new deals to borrow cash from Wall Street.

Top to bottom reform is clearly necessary. But that would bring Thurmond into direct conflict with his political campaign financiers — the leaders of California’s powerful teacher unions. They raise and spend some $600 million every election cycle and Thurmond will need them for his campaign for governor. ([link removed])

Let’s be clear: The cost of housing in California is, indeed, second highest in the nation (Hawaii is No. 1). But that’s a function of California regulations that make it nearly impossible to hammer together even two pieces of wood without the guidance and grifting of myriad state and local agencies.

“It’s really hard to operate here,” Zain Jaffer, partner at Midvale, Utah-based multifamily investment firm Blue Field Capital and a California resident, recently told a real-estate development trade magazine. ([link removed]) “A large percentage of the cost just comes down to dealing with all the red tape for construction. It’s just inspections after inspections.”

Thurmond’s project would be an especially remarkable achievement in a state that produces just 120,000 housing units in a good year. At that rate, barring any other screwups that are inevitable when politicians play business executive, Thurmond might finish the job in 20 years.

Poetically, 20 years is about the time that Los Angeles Unified School District officials have been trying to find their way through a Halloween corn maze of state regulations, local zoning headaches, lawsuits, cost overruns and Thrumondesque dreams about big plans to house teachers.

In 2008, LAUSD school board members voted to build “affordable workforce housing” for district teachers. Six years later, the district had built just one complex and was still in the planning stage of two others, for a grand total of 185 units — or about one unit for every 184 district teachers.

That’s when LAUSD ran into their first regulatory obstacle: teachers generally make too much to qualify for affordable housing. And then the district learned that state law barred them from limiting affordable housing to teachers anyhow. Translation: LAUSD would have no control over who would get to live in their affordable housing — more or less “defeating the purpose of the project,” as one reporter put it in 2014. ([link removed]) Stretching for any reason to declare their mission accomplished, one district official at the time offered this neat idea from the silver-linings playbook: “We can notify our folks first and market it to our employees, so that they’ll have advance notice. They can get a jump start on the application.”

If you read LAUSD’s sad recap of this dismal effort today, you’ll still find them clutching to that slender success: “Los Angeles Unified previously worked with affordable-housing developers to build three projects where District employees receive priority in leasing the units.”

Thurmond’s plan depends on free land — that’s property the districts already own but no longer need. Thurmond’s office estimates that surplus land at about “75,000 developable acres.” That’s just one indication that Thurmond’s claim of a teacher shortage is filled with methane: There’s surplus property because school districts are shrinking. In fact, California has as many teachers today as it did five years ago, despite the fact that student enrollment has declined 6 percent over the same period — and is predicted to decline 12 percent more in the next few years. The factors behind that decline are numerous — a declining birthrate, for instance, an exodus of families to other states, and the decision among thousands of parents to send their children anywhere but a school run by California’s teacher unions.

But the bottom line is that we have more teachers per student than ever before. And (if we can have two bottom lines) that school districts ought to be encouraged to sell the land and use the resulting billions to pay down their unfunded retirement obligations. Selling would also put the land back into circulation, allowing actual real estate developers the opportunity to develop additional space for businesses, jobs, local tax revenue — maybe even homes.

Of course, there’s a slight chance that Thurmond will follow through on this effort and that a superintendent in some space-age future will cut the ribbon on the 2.3 millionth home. In that event, the school districts may think of themselves as the real winners: by turning themselves into landlords — by transforming their employees into paying tenants — California’s flagging school districts will have struck gold. Millions of dollars in rent payments will pour in every month.

There will also be massive tradeoffs: already complicated collective bargaining agreements — between district and union negotiators — will become more fraught as teacher unions demand housing equity, carpet-cleaning, climate-change initiatives, a permanent solution to elevator breakdowns, hard barriers to eviction, parking, Japanese toilets, and, most important, rent control. Teachers may find themselves handcuffed to jobs they hate but a rent-controlled home they can’t afford to leave — except every morning as they trudge through Hunger Games-looking Thurmondvilles, clanging lunch buckets in hand, to work on the assembly line we might still call the classroom.

But in their project’s earliest days, LAUSD officials enthusiastically embraced the complexity with the euphoria of a newcomer at the roulette wheel. Unleashed by experience, they aspired to become landlords. Writing about the failure of that project in 2014, LASchoolReport’s Vanessa Romo told us of the memo in which district officials, including the board and then-Superintendent David Brewer, laid out the case for building teacher housing. Yes, yes, they loved the idea that government-subsidized housing might help retain teachers. But they also made “the case for affordable/workforce housing as a way to ensure a steady stream of revenue for decades to come.”

History is history, of course, and a feature of the progressive political spirit is that we march into the future unburdened by what has been. That’s why, learning of Thurmond’s plan last week, LAUSD school board member Nick Melvoin could celebrate with no obvious hint of irony.

“As stewards of the public trust, and a huge real estate portfolio, and public dollars, I’m a big believer in utilizing what we have for the public,” Melvoin told an interviewer ([link removed]) . “Taking the land that we have and the need that we face, and creating affordable housing for our workforce, just seems like a real no brainer.”

“No brainer” neatly sums up the qualities our politicians bring to such efforts. The rest of us will get our heads kicked in.

— By CPC president Will Swaim

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** Radio Free California #347: Those Who Can’t Teach Become Real Estate Developers
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On this week's podcast with CPC president Will Swaim and CPC board member David Bahnsen: Presiding over the nation’s worst public schools ain’t enough, so California schools chief Tony Thurmond wants to build millions of homes. Newsom cheers as Chevron leaves California. The Los Angeles Times is the bagman for the environmentalist mob. Bonus: CPC’s Edward Ring on the return of drought. Listen now. ([link removed])

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