It may seem impossible in one of the least-affordable real estate markets in the country. Except for city charter schools.

For the past 10 years, the alternative public schools have paid a relative pittance to rent space from the school district.

At 95 cents per square foot annually, the district was nearly $2 below Oakland’s charter school rental rate, $5 shy of Los Angeles and nearly $8 less than Berkeley, which has only one charter school that rents space.

To rent on the retail market would cost a school around 15 times what San Francisco Unified charges charters.

San Francisco district officials, who hadn’t raised charter school rent in five years, realized this year that they could charge more under state law and decided to triple the rent to $2.79, phasing in the increase over two years.

Eight charter schools will be hit with the increase, generating an additional $500,000 a year for the district. But charter schools and their advocates say any rent increase will have an impact on what happens in the classroom.

“For example, a school with a 20,000-square-foot facility would incur an increase of $34,400 per year for facilities expenses,” said Hilary Harmssen, the Bay Area regional director for the state charter association. “California Charter Schools Association schools would likely need to divert funds that are currently invested in the classroom for teachers, books and other learning materials.”

Rent parameters

Districts are allowed to charge charter schools what they spend per square foot to maintain buildings and grounds, costs that include security, maintenance, trash removal, gardening and custodial services.

In 2011, the district surveyed other Bay Area districts and found the wide discrepancy. Most charged between $2 and $4 per square foot, said district spokeswoman Gentle Blythe.

“This decision was reached after carefully reviewing similar practices in other districts, many of which we learned charge higher rates based on a different methodology than SFUSD had previously been using,” Blythe said.

San Francisco school board members said they were surprised to learn the district, for years, has been charging charters far less than other cities, where land isn’t worth nearly as much.

Charter schools have until May 1 to let the districts know whether they will stay or go.

District officials, however, were largely unsympathetic to the impacts on the city’s charter schools.

Fiscal responsibility

“Our budget has been slashed every year,” said school board member Jill Wynns. “There’s a lot of political pressure to just be nice to (charter schools). There’s nice and there’s bordering on fiscally irresponsible.”

At Gateway Public Schools, which has operated a charter high school in the city for 15 years and a middle school, officials were trying to figure out how to cover a $100,000 rent increase each of the next two school years.

“On the one hand I understand (the district’s) perspective,” said Sharon Olken, the executive director of the schools, which serve about 600 students. “They have a financial responsibility just as we do.”

And it was a bit of a wake-up call when Olken went looking for space in the retail world and found that commercial space costs $1.25 per square foot – per month.

“It was a sobering statistic,” she said. At the same time, “no one expects their rent to triple in two years. We budget an increase each year to account for inflation. That’s obviously not 200 percent.”

The increase over two years is the equivalent of about three teachers, Olken said.

“What I said to the district is from our perspective what we assumed was a fixed cost tripled,” she said. “Regardless what it started at, we are talking about real dollars that affect every student in our school.”

Jill Tucker is a San Francisco Chronicle staff writer. E-mail: jtucker@sfchronicle.com

Article source: http://www.sfgate.com/bayarea/article/S-F-district-raises-charter-school-rent-4283891.php

As I sit here, less than 24 hours from the next release of the much-followed monthly SP/Case Shiller Home Price Index, I’m confronted with all kinds of varying data and hypotheses on the future track of home prices.

Particularly interesting to me is a new breakdown, by Capital Economics (which watches our market from Toronto, Canada), on how prices are falling faster at the low end than the high end.

At face value I thought this was a no-brainer. Of course the low end is falling faster because that’s where the bulk of the foreclosures are, thanks to the subprime mortgage debacle, which of course targeted first-time and low-income buyers on the low end. I had no idea how large the discrepancy is:

“Since their 2007 peak, prices in the low tier have so far fallen by 45 percent compared with declines of 35 percent and 25 percent in the middle and high tiers respectively,” notes the report.

Even though most of the subprime distress has worked itself through the market, the pressure on the low-end continues because it is the low-end borrowers now who have the toughest entry to the oh-so-tight mortgage market. As the report reminds, proposed risk retention rules will likely mean a 20 percent down payment, which will price many borrowers out of the low end of the market.

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Article source: http://www.cnbc.com/id/43553459?__source=RSS*blog*&par=RSS