San Francisco Startup Courts Hawaii Teachers Seeking Homeownership By Ryan Finnerty May 17, 2019
The San Francisco based company Landed was created to help teachers working in high-cost areas achieve homeownership. The company has been meeting with teachers across Hawaii this week ahead of its planned expansion into the state. Landed is already operating in other expensive metropolitan areas on the mainland, including Seattle, Los Angeles, Denver, and the San Francisco Bay area. The cost of housing in Hawaii is on par or in excess of those cities. In April, the average sale price of a single family home in Hawaii was $800,000, which puts a 20% down payment around $160,000. Compare that with the starting pay for public teachers; less than $50,000. The basic premise is that Landed will cover half the cost of a 20% down payment for teachers and other education professionals, up to $120,000 per family. In return, the company will take 25 percent of the increase in the property’s value over the term of the mortgage. If the property loses value, Landed will also absorb 25 percent of the loss. Ian Magruder, Landed’s Director of Partnerships, describes this arrangement as an investment in teachers, rather than a loan. But not everyone agrees with that sentiment. The president of the Hawaii State Teachers’ Association, Corey Rosenlee, sees Landed as being far more expensive than a conventional loan. “Unfortunately, we actually believe that Landed is not a good deal for our teachers,” Rosenlee told HPR. He described a scenario in which a Landed participant purchases a $500,000 condo. Landed would contribute $50,000 toward a down payment and claim 25% of the future change in the condo’s value.