After years of planning, negotiation and preparation, construction is underway in Mountain View to build subsidized housing for teachers and other school staff.

The Mountain View Whisman School District has partnered with the city of Mountain View and the real estate developer Miramar Capital to build 144 units of below-market-rate housing at 777 West Middlefield Road, 123 units of which will be reserved for district staff. The subsidized units are part of a larger 716-unit project of otherwise market-rate units that Miramar is building on the site of the former Village Lakes apartment complex.

The school district held a formal groundbreaking ceremony on Nov. 3 with Superintendent Ayindé Rudolph and school board members in attendance, but the project originally broke ground back in July, district spokesperson Shelly Hausman said.

Finding affordable housing is a barrier for district employees, especially younger staff members, Rudolph said in an October interview.

"I am beyond elated and proud that our district is at the forefront and has created this opportunity for our teachers and our staff," Rudolph said. "I wish we could do more, but it's definitely a step in the right direction for a lot of our employees."

The apartments will be a mix of studios, one- and two-bedroom units, and rents will be roughly $1,000 less than the area's average, according to the school district. The plan is for the staff housing to be completed in 2024. The market-rate portion of the development is expected to be completed in the second quarter of 2025, a representative from Miramar Capital said.

Mountain View Whisman is spending $85 million in funding from Measure T, the $259 million bond measure that voters approved in 2020, to finance the project. The city is contributing an additional $3 million and the developer is kicking in $13 million, Rudolph said.

Out of the 144 subsidized units, the city will have first dibs on 20 units for its employees, one unit will be set aside for a property manager and the remaining 123 units will go to school staff.

The idea of providing subsidized housing to school employees has gained momentum in recent years as housing prices have skyrocketed, raising concerns that teachers will have difficulty finding housing near where they work.

Santa Clara County Supervisor Joe Simitian has spearheaded a separate project to build educator housing at 231 Grant Ave. in Palo Alto, across from the courthouse. Mountain View Whisman is also a part of that project.

Mountain View Whisman teachers earn between roughly $75,000 and $134,000, depending on their education level and seniority. Mountain View's overall median household income is $144,116, according to U.S. Census Data covering the period from 2016-2020.

"This is years in the making and definitely a game changer for our district," Rudolph said in a video about the Middlefield housing project. "(It's an) amazing opportunity for our teachers and staff to live right here in Mountain View with below-market-rate rents."

Back when the school board originally approved the agreement to create the educator housing in March 2019, estimates called for the units to be ready as soon as late 2021. Ultimately, the project didn't break ground until July 2022. The pandemic caused significant setbacks in getting the project off the ground.

"On March 13, (2020), when the world shut down, it just left us in limbo," Rudolph said.

The delays led to substantial cost escalations. The original agreement called for the district to pay about $55 million, roughly $30 million less than the current $85 million price tag, according to city documents.

According to Rudolph, there are sufficient remaining Measure T funds to cover the cost increase, but the district may have to put other projects on hold. Measure T originally included projects to address short-term enrollment growth, but the pandemic meant that the district hasn't seen that growth and can use the money on staff housing, Hausman said.

Once the units are completed, the district plans to hire a management company to handle the day-to-day operations, including determining which staff members meet the income qualifications, the district said in an Oct. 18 newsletter.

The district's contract with Miramar is structured so that once the apartments are constructed, the district will pay $1.8 million annually for a 55-year ground lease, with the option to renew for up to four additional 10 year terms.

While construction is being paid for with Measure T funding, the annual $1.8 million lease would be covered by the rents that district employees would pay, Rudolph said.

Malea Martin contributed to this report.