Housing Prices Hurt Cal State Recruiting

Marketing professor Terrance Gabel’s resignation letter struck a nerve among university recruiters trying to lure out-of-state educators to balmy and pricey Southern California.

“One of my dreams was to own a home,” Gabel wrote to Cal State Northridge administrators. “I will never do that here. In Missouri, I’ll own a home next year.”

Gabel, who left for Truman State University in Kirksville, Mo., last semester after only two years at Cal State Northridge, might have stayed if a housing assistance program proposed by the California State University system had been in place. Chancellor Charles B. Reed is seeking $5 million and a corporate partner to help new faculty members buy homes in the state’s most expensive locales, a list topped by Orange County, the Bay Area and Northridge.

Any assistance would reach state colleges at a time when median home prices have reached $276,000 in Orange County and an all-time high of $232,792 in the San Fernando Valley. Entry-level Cal State professors earn $45,000 a year.

Ephraim Smith, vice president of academic affairs at Cal State Fullerton, said recruiters are forced to be creative because of Orange County’s high housing costs.

“It makes us have to be aggressive in recruiting, but I don’t think we’ve dropped the quality of our faculty yet,” he said. “The whole community gets better as they build more and more here, but it also means it’s getting more and more expensive to live here. So we hire a number of professors with connections to the university. They’ve taught here before or got their undergraduate degree here.”

Gabel recently said, “I underestimated the cost of buying a house in the San Fernando Valley . . . I thought we’d make enough to save enough of a down payment. Before I left, I was told by several people who had been at the college for a long time that they’d leave too, if they hadn’t come when housing was affordable.”

Professors are not only leaving for places with cheaper costs of living but also are declining offers altogether. John Mason, Northridge’s associate vice president for faculty affairs, said professors who turned down Cal State Northridge listed salary as the No. 1 reason in a survey of roughly two dozen professors who rejected jobs last year. The cost of housing was the second-most-frequent reason.

“I’m not sure the two [reasons] separate so neatly, because if the cost of living were lower, you wouldn’t need a higher salary,” Mason said.

About 78% of the rejecting recruits polled by department heads in the survey said they would have needed more money or cheaper housing to make the move to the San Fernando Valley. That number takes into account only those recruits who made it past the interview process, not those who spurned offers straightaway.

Despite the number of rejections, Northridge receives an average of 64 applications for each opening and hires its first choice for three of every four positions, Mason said. But it’s the out-of-state recruits unaware of West Coast home prices who are the hardest to attract.

“We’ll pull from the grad students in the area,” he said. “They’ve already faced the housing crunch one way or another. The challenge is to bring someone from Ohio, where you can buy a home with a circular drive for $100,000.” Median home prices in Ohio’s metropolitan areas hover around $106,000, far less than in California.

Northridge will hire 70 faculty members this year, Mason said. Nearly half will be Southern Californians, such as fourth-year math professor Kellie Evans, a Los Angeles native who earned her doctorate at the University of Wisconsin in Madison.

“I knew what the housing cost was,” she said. “But I wanted to come back here, so it’s no big shock to me.”

Beginning instructors, who may have spent 10 years and about $100,000 in tuition and housing preparing for their careers dream of living in ivy-adorned homes as their professors did, Gabel said. The bubble is burst the first time they start looking for a San Fernando Valley home to buy on the university’s starting salary.

That is why there is an annual waiting list for university-owned townhomes that rent for $1,000 to $1,200 a month in Northridge. Even Mason, a manager on campus, lives in one of the rentals.

The state university system’s 11,084 professors earn 8% less than their counterparts at 20 comparison institutions, according to figures released this month by the California Post-Secondary Education Commission. Compared with schools that have similar curricula or recruitment efforts, the Cal State system ranks 17th in pay for beginning professors. In that group, salaries range from $45,000 to $63,000.

Cal State administrators are well aware of the housing and salary quandary, a crunch felt among employers throughout high-rent areas of the state. Unlike private firms, the universities are bound by the limits of state funding and union contracts that establish a standard salary structure for all the colleges.

Any assistance program would probably benefit only those professors assigned to campuses in the most expensive communities in the 23-campus Cal State system: San Jose, San Francisco, Northridge, Fullerton, Los Angeles, Long Beach, Dominguez Hills, San Diego and Stanislaus, Cal State spokesman Ken Swisher said.

San Jose State, surrounded by high-paying technology jobs and soaring property values, offers the most acute gap between pay and housing costs. Compare the starting salary of $45,000 with the city’s median home price of $552,000, twice that of Los Angeles.

San Jose State President Robert Caret has called housing the No. 1 problem facing his university. The cost of housing has scared off so many recruits that a third of its 82 faculty positions advertised in the past year remain vacant. In some cases, professors have accepted jobs and left two months later after struggling financially in the Silicon Valley, Caret said. The school’s trustees have approved a conceptual plan for a $400-million on-campus housing village for students with 50 transition apartments set aside for faculty.

“We’ll do everything we can to help those who are willing to come,” said Caret, adding that San Jose State co-purchases homes with five to 10 professors a year.

Cal State has responded with several initiatives, ranging from building on-campus housing for professors to the $5-million assistance proposal that would help faculty members pay closing costs on home loans. The university already has an arrangement with Northwest American Mortgage Co., which offers faculty members a half-point discount on home loans.

A $49-million, 900-unit faculty housing complex is planned for the newest campus, Cal State Channel Islands in Ventura County. The first phase includes 48 rental townhomes, 24 townhomes for sale and 36 detached homes for sale. The rentals would go for as little as $950 a month, and the homes would cost from $225,000 to $275,000.

The $5 million in assistance would not go far toward easing the financial burden of a faculty member trying to buy a home on a young professor’s pay, Swisher said. Cal State officials expect that the allotment will be included in the governor’s final 2001-02 budget, he said.

The university also is negotiating with banks to offer short-term funding and low-interest mortgages in exchange for marketing other banking products to Cal State’s 40,000 employees.

Swisher would not say which bank is negotiating with the university, but the plan is similar to an agreement between the University of California and Bank of America, which offers employees housing allowances and second mortgages with low interest rates to help with down payments.