A local school district is finding itself in choppy waters as it weighs the best way to provide teachers and other employees with affordable housing.
In 2024, the San Jose Unified School District issued a general obligation bond, Measure R, to fund the renovation of classrooms and facilities, as well as provide affordable housing for the workforce. Officials said the district would use the $1.15 billion bond measure to build 288 homes at 760 Hillsdale Ave. Instead, they’re contemplating purchasing 337 condos out of the 643 in the Silvery Towers at 188 West St. James St. in downtown San Jose. People who campaigned for the bond measure said they feel betrayed.
Michael Melillo, a district parent and former co-chair of the Measure R campaign, said the district should construct employee housing on its own land rather than investing in a building it doesn’t own.
“Everything was going as smoothly as could be expected for a project of this size and scale. The condo purchase came out of the blue,” he told San José Spotlight. “From a long-term perspective … the potential risk of owning those units in a tower, as opposed to an entire facility on land that they own and control, it doesn’t make much sense to me.”
In addition, Melillo said the bond measure passed with a union labor agreement attached to it.
“That was a very important piece of the bond measure, in particular because organized labor was a big part of how the measure was able to pass,” he said. “They did a lot of the door knocking and campaigning. It doesn’t sit right with me to then use those funds to buy the condo units.”
Seth Reddy, chief business officer of the San Jose Unified School District, said no decision has been made to purchase any property.
“We haven’t bought anything beyond exploratory contracts for consultants to do the necessary due diligence,” Reddy told San José Spotlight. “Bond funds would be used to fund either the construction or purchase.”
Reddy said the school district will have more information on the viability of its options in the next several months — and hasn’t ruled out purchasing the condos. The property is owned by New York-based Machine Investment Group and Centurion Real Estate Partners, which purchased the towers in foreclosure for $182 million.
“We have taken the initial steps to conduct exploratory due diligence on potential opportunities to determine whether purchasing an already-built residential development could provide affordable workforce housing for employees more quickly, at lower overall cost than constructing a comparable development,” Reddy said, adding that would mean more Measure R funds for schools.
Developers such as Erik Hayden, founder of real estate equity fund Urban Catalyst, said it makes sense. Hayden said in addition to being more expensive to build, including paying union wages, ground-up development has to procure entitlements and can be subject to potential neighborhood opposition.
“It’s a great short-term solution. If they got the right deal on Silvery Towers, they should take it,” Hayden told San José Spotlight. “What that (bond) was passed for was to get teachers affordable housing, and if they can get an awesome deal on an already built building that’s cheaper than building their own building, they 100% should take it.”
Renata Sanchez, president of the San Jose Teachers Union, said almost 900 surveyed employees responded that they’d be interested in affordable housing provided by the district. Sanchez said during workforce housing advisory committee meetings, residents recommended the district look at purchasing vacant properties instead of building on land that is now used for educational purposes.
“At the time, there were no options available to consider purchasing at a similar scale from what we have been considering building,” she said.
The issue of teacher housing began back in 2019 when district leaders explored solutions that included building affordable teacher housing on district property — a concept pursued by the district for a little more than a year — however, there was plenty of pushback. The district looked at four locations include parking lot 9 at the San Jose Unified offices, River Glen School, The Second Start-Pine Hill School and the Metropolitan Education District on Hillsdale Avenue.
The district later focused on the Hillsdale site following a recommendation from its advisory committee in February 2025.
Reddy said attracting and retaining high-performing teachers and other workers remains a priority.
“The high cost of living continues to be an impediment,” he said. “We conducted a survey in January 2025 and 43% of the over 1,200 respondents had considered leaving their job in the next five years due to housing costs. Affordable housing opportunities mean more teachers and staff don’t have to work extra jobs to make ends meet, can live in our community, have shorter commutes.”
Reddy said after receiving an update from consultants in September, the district submitted a preliminary review to the city. Following feedback, it updated its design for the Hillsdale site.
“That’s going to continue until it shouldn’t, if another decision is made,” he said.
Contact Lorraine Gabbert at [email protected].
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