An Analysis of How Housing Incentives Can Reduce Teacher Attrition in North Carolina

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Background North Carolina, and the entire United States, is in the midst of a teacher shortage. The teacher shortage is caused by two main factors: not enough teachers are joining the profession and too many teachers are leaving the classroom. In North Carolina, the pipeline for teachers is drying up. Enrollment in the UNC system’s education programs—which produce more than 35% of NC teachers—is down more than 40%. Superintendents also report that the number of applications per job opening has decreased and some job postings receive no applications at all. Each year about 8% of teachers in North Carolina leave the classroom. Teacher attrition and a glut of inexperienced and underprepared teachers seriously inhibits student achievement. It also costs North Carolina millions each year to recruit, hire, and train new teachers. Teachers leave the classroom for a variety of reasons that are complicated and often interdependent. However, among the main reasons are low pay and rising cost of housing. Adjusted for inflation, NC teacher pay decreased nearly 12% from 1999-2016. Average teacher pay in North Carolina has increased from 46th to 34th in the United States. This increase is not enough to keep pace with rising cost of living and housing (NEA, 2019). During the past decade, the average home price in North Carolina has increased 45% (“North Carolina Home Prices and Values”, 2020). As the cost of living continues to increase, teaching becomes a less appealing profession. Some NC districts have used housing interventions like subsidized apartment complexes specifically to recruit and retain teachers. There is a lack of rigorous academic research, but anecdotal evidence suggests these housing programs have been successful on a small scale. However, the subsidized apartment complexes are unable to meet demand and should be supplemented with other housing interventions. Proposed Policy I am proposing a no-money-down home loan program for teachers modeled after the VA’s program to help retain teachers by addressing the challenge of affordable housing. North Carolina would guarantee 25% of home loans through the program. All public-school teachers in North Carolina would be eligible for the program. Teachers could opt for an option with a 5- year commitment with no fees or a 3-year commitment with 1.5% fees on the value of the loan. Methods To determine whether a no-money-down loan program would help address teacher attrition, I created a questionnaire for teachers in North Carolina and I interviewed district-level leaders. I also built a financial model to analyze the feasibility of the program as well as the cost to the State. Results/Key Takeaways There is interest in the proposed program—the overwhelming majority of teachers want to own a home and lack of funding for a down payment is the second largest barrier. Over 65% of teachers said they would be interested in buying a home with the proposed program. Owning a home increases the likelihood of a teacher staying—75% of teachers said owning a home would make them much more- or slightly more likely to stay in their current school. Hiring and retaining quality teachers is difficult—Superintendents repeatedly said that this is one of, if not, the biggest challenges for them today. They also said that they need policy solutions to help solve these challenges. The financial cost is low, but liability is big—If the program is widely adopted, North Carolina could carry billions on its balance sheet. However, this risk is borne mostly by private lenders. The State could expect to pay only about $1 million in the first year. The proposed policy could benefit North Carolina financially and academically—Each 1% reduction in attrition saves almost $1 million for North Carolina. In addition to financial savings, student achievement should increase as teachers stay in the classroom longer. Recommendation I recommend that North Carolina implement the no-money-down home loan program for a period of at least 10 years. This program would be most effective for “middle-age” teachers between 28-45 who have been teaching for a few years. The commitment will help address teacher retention and the lack of a down payment will help teachers afford a home. For very expensive counties or counties with low housing stock, districts should build more subsidized apartment complexes to supplement the no-money-down program.





Calvert, Matthew (2020). An Analysis of How Housing Incentives Can Reduce Teacher Attrition in North Carolina. Master's project, Duke University. Retrieved from

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