Home loan scheme costly for teachers

Read this Op-Ed by HSTA's president from Sunday's Honolulu Star-Advertiser

This Op-Ed from HSTA President Corey Rosenlee ran in the Island Voices section of the Honolulu Star-Advertiser on Sunday, May 12.

When it comes to the teacher shortage crisis, Hawaii is desperate. Our state has more than 1,000 public school classrooms that lack a qualified teacher this school year, impacting nearly a third of our students every day. In the last six years, Hawaii has seen the number of teachers moving to the mainland increase by 70 percent, mainly due to Hawaii's noncompetitive salaries. Public school educators here have the lowest salaries in the country when you factor in Hawaii’s high cost of living. 

One potential solution to this crisis is to create teacher housing, but three proposals that the Hawaii State Teachers Association supported aimed at providing teacher housing died this year at the legislature. Into this crisis comes a new program called Landed, which offers educators a matching 10 percent of their home’s down payment in exchange for repayment of that amount and 25 percent of the home’s profit.

Click here to read and listen to Hawaii Public Radio's news story about the educator down payment program, with comments from HSTA's Rosenlee.

Just like someone dying of thirst in the desert, you may believe the mirage offers water, but in the end you may be drinking sand. Let's say a young teacher wants to buy a $500,000 condo in Hawaii. First they need their own $50,000 to put down, which is very difficult on a teacher’s salary. Then Landed would provide the other $50,000 of the down payment. Assume Hawaii has a steady growth in real estate, and the price of that condo doubles in 15 years. When the teacher sells the house, they have to pay back the $50,000 loan plus 25 percent of the home value which would come out to $125,000. In this scenario, the total payment to Landed would be $175,000, which could be a significantly higher amount than if the teacher had just taken out mortgage insurance and paid the loan over time.

Teachers who can’t afford down payments worth 20 percent of their home’s cost could pay for mortgage insurance. But an additional $100 or $200 payment for mortgage insurance every month may be too much for a financially strapped teacher and is a deal breaker. Thus a teacher’s desperation. A teacher wanting to stay and do the job they love may be willing to take advantage of the Landed program, because they have no choice. Do you take advantage of a program that allows you to purchase a house on a teacher’s salary even though the cost could be much higher than a traditional loan? In the end, the cost may be too high. Hawaii teachers must be careful. Desperation should not be the driving factor when looking for a home for you and your family.  

Hawaii needs to be realistic, Landed will not end Hawaii's teacher shortage crisis. The Legislature needs to look at effective teacher housing bills in the next session. Hawaii could also do the right thing: pay our educators a competitive salary so they could afford housing and not have to make desperate choices about the most important financial decision in their lives.

Corey Rosenlee

Hawaii State Teachers Association President

A social studies teacher for more than 20 years, Rosenlee represents 13,700 public school teachers across Hawaii.


Author: Keoki Kerr