The district is on its way to becoming a landlord in an effort to staunch a migration of experienced employees to affordable communities in the next few years.

Because of the high cost of housing in San Mateo County, there’s been a dearth of qualified applicants. Careerists from around the country are choosing to work elsewhere rather than live where they can’t afford a home or have to suffer long commutes.

Coupled with 200 employees who are currently eligible to retire, administrators are hard pressed to find solutions before the quality of education in the county is undermined. Approximately 40,000 students are served annually on three campuses.

“We live in one of the highest cost areas in the country. Marin, San Francisco and San Mateo counties are among the top 10 most expensive areas for housing,” said Barbara Christensen, director of community and government relations. “We want to attract the very best by offering them a job and housing assistance.”

Since salaries can’t keep pace with the grossly inflated housing market, the district is building a 44-unit apartment complex called College Vista. The complex is located on the College of San Mateo campus. The initial cost of the project is $8,024,037. Move in day is in October 2005.

Full-time staff and faculty who meet the criteria of first-time home buyers have a chance to rent a luxury-type apartment for below market rate for up to five years. Their salaries must be at 120 percent of the medium income for the county. A priority list has been established and the waiting list is growing.

During their residence at College Vista, renters will be encouraged to save for a down payment on a home through a voluntary savings plan. The district will also provide free financial planning and home purchasing advice.

Once an employee has the minimum down payment of 3 percent, he or she may apply for a first mortgage with Meriwest Credit Union and a second loan with the district up to $50,000. Employees can buy a home in San Mateo, Santa Clara, San Francisco and Alameda counties and there are no income restrictions.

A predecessor to this new plan with Meriwest was a partnership in 2001, with the City of San Mateo, Millbrae, South San Francisco, Brisbane, Daly City and Redwood City. The stipulation was that employees had to buy within the respective city that gave them a third loan. A second and third loan enabled employees to qualify for a higher mortgage.

“People here have either lived here forever or are very young, just out of college and don’t mind renting,” said Sandy Council, management analyst for the City of San Mateo and neighborhood improvement and housing program. But there’s a huge exodus of young, experienced workers who are at that settling-down stage of their lives who can’t afford to live here.”

The City of San Mateo gave a third loan to six district employees. They assisted a total of 16 households before running out of money. The program has been inactive lately.

“We’re looking for funding, but the base work is in place,” Council said.

In the district’s new loan program, with Meriwest as the first creditor, employees may borrow up to $50,000 for 10 years with the first five years interest free. On the 6th year, the simple interest is 4 percent, paid monthly, for the term of the loan. If the employee sells the home or re-finances the loan, the district receives a share of the appreciation proportional to its investment.

A criticism of this type of plan, especially for homeowner’s who buy property that appreciates slowly (certain condominiums, mobile homes or homes in certain neighborhoods) is that buyer’s walk away with less cash for their next home purchase after paying off their first and second loan. But it may be worth it for the tax benefits of homeownership. And establishing good credit is far easier when you own a home.

“I don’t know if I would have been able to afford a home without assistance,” said a district employee who did not wish to be identified. She is a single mother who purchased a two-bedroom, two-bath condominium with loans from the district and the City of San Mateo. “It was more expensive than rent because of the closing costs, association fees and repair bills. I was afraid it would wipe out my savings, but the return from my income tax is paying for my daughter’s college education.”

The district has given loans to seven employees for a total of $350,000. Five other employees have successfully purchased homes through one of the city partners.