The Bentonville School District is considering building affordable housing for teachers who are struggling to secure homes amid skyrocketing home prices in Northwest Arkansas.
Superintendent Debbie Jones said district officials first realized the severity of the problem in 2021 when teachers who signed contracts resigned before the start of the academic year because they couldn’t afford housing in the area.
The Rogers School District, another large district in Benton County, has also had employees rescind job offers after realizing they couldn’t afford moving to the area, Communications Multimedia Specialist Jason Ivester said.
“It is an ongoing concern that we are constantly looking at,” Ivester said.
The affordable housing issue complicates teacher recruitment, which is already challenging because the pipeline is shrinking as fewer people go into education, and a solution is going to take a community effort, Jones said.
To that end, the Bentonville School District has partnered with the Excellerate Foundation, a grant-making organization that has previously worked on housing issues in the region. President and CEO Jeff Webster approached Jones with a possible solution to the district’s affordable housing problem and presented his proposal at the Bentonville School Board’s July 17 meeting.
The proposed project would involve construction of a community center, 50 to 60 multi-family rental units and 20 single-family rental homes on land adjacent to Bentonville High School. Developers would also build 20 single-family homes that could be sold for $180,000 to $200,000.
The average sale price of a home in Bentonville was about $475,000 last year, according to a regional workforce housing center. In July, the median sale price of home in the city was $507,500, according to Realtor.com.
Webster told the board there will be no cost to the district, which can donate the nine acres, six of which are usable because of a floodplain. Webster estimated the project will cost $20 million to $25 million and said the development would be built by Strategic Realty, whose founder and CEO is Sen. Jim Petty, a Republican from Van Buren.
Excellerate will invest millions into the project and act as “the quarterback” by bringing different funding sources to the table, Webster told the Advocate.
“It’s everybody doing their part, and we’re just trying to step up and play our role,” he said.
Jones said she didn’t understand the depth of the affordable housing issue until she received an email from a teacher earlier this year.
“We gave a 6.5% salary increase this year, and she said, ‘I’m a single parent and I can finally breathe…but the housing is a whole different challenge,’ and we know it is,” Jones said.
During the 2022-2023 school year, Bentonville had the third highest starting salary for teachers in the state at $48,755. The LEARNS Act of 2023 raises Arkansas’ minimum teacher salary from $36,000 to $50,000.
Bentonville’s starting pay for a new teacher with a bachelor’s degree and no experience is $51,924 for the 2023-2024 school year.
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Webster said he expects the project to be completed within two years, but the district is awaiting a legal opinion from Arkansas’ Attorney General before moving forward. Rep. Mindy McAlindon, R-Bentonville, has submitted questions to the AG’s office to ensure the novel project is legal.
If approved, Webster said the project could become a model for others. No districts have pursued such a project in Arkansas, but organizations in other states have.
For example, a California school district south of San Francisco opened 122 apartments for teachers and staff last year, while the American Federation of Teachers opened a building with apartments and shops for teachers in West Virginia, according to the Associated Press.
Arkansas School Boards Association Policy Services Director Lucas Harder said the housing issue that affects teacher recruitment in the Natural State more often deals with a lack of housing in remote areas.
“It’s one of those things that always comes up every so often, especially in the Delta or some of the more rural areas, where it can be hard to get someone to come and move out there, either because there isn’t housing or there aren’t other things available,” Harder said.
Sen. Linda Chesterfield, a former educator and Democrat from Little Rock, tried to address this issue in 2003 when she was a member of the Arkansas House and lead sponsor of Arkansas Teacher Housing Development Act. The law created the Arkansas Teacher Housing Development Foundation to develop affordable housing and provide housing incentives to attract high-performing teachers to high-priority school districts.
The law was repealed in 2016.
A growing problem
If the Bentonville School District moves forward with its affordable housing project, the development will be built just south of Walmart’s Home Office, which is under construction on 350 acres. The world’s largest retailer has spurred a lot of economic development in Northwest Arkansas, which has come with rising home prices in recent years.
The average price of a home in Benton County in the second half of 2022 reached $401,875, nearly 76% higher than five years ago, according to The Arvest Skyline Report released in March. The average price was $376,018 in Washington County, 71% higher than five years ago.
A variety of organizations and municipalities have taken steps to study and develop plans to address the region’s affordable housing crisis. In March 2021, the Northwest Arkansas Council launched a workforce housing center with the goal of providing housing solutions for the region’s critical workforce.
The center rebranded as Groundwork in July when its executive director announced a 77-unit mixed-income apartment project in downtown Springdale that will include 30 units permanently reserved for households earning below the region’s area median income.
In late 2021, the Bentonville City Council adopted a resolution to establish a group to study workforce and affordable housing. Webster served as chairman of the Bentonville Housing Affordability Workgroup, which met for a year and released a final report in January. The group’s work included a recommendation for developer incentives and process improvements called Project ARROW.
In early August, the Excellerate Foundation announced the creation of Excellerate Housing LLC, a wholly-owned subsidiary, to accelerate the creation of affordable housing in the region.
“The affordable housing crisis has been with us for years, but it continues to intensify in the wake of the COVID-19 pandemic, historic inflation and a population growth rate that shows no signs of slowing down,” Webster said in a statement. “Excellerate Housing will help those who have been hit the hardest by the lack of affordable housing, especially the region’s ALICE (Asset Limited, Income Constrained, Employed) population.”
The 25-year-old foundation has worked in the housing space for about six years. Among other things, Excellerate led the creation of the NWA Regional Fund through which local banks invested more than $40 million in equity to support five new affordable housing developments. The fund supported 345 rental units for lower-income families that will run, on average, 49% below current market rate rent.
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