"It's expensive to live in Santa Clara County," says Superintendent Paul Perotti. "We were getting lots of letters from teachers saying they loved working for us but were moving somewhere less expensive." Frustrated by the high turnover rate, the school district lit on a novel solution: Build apartments for teachers. Outfit the units with garages, washer and dryers, private patios and Internet access. Rent the units at below-market rates and assure the educators who move in that they won't have to worry about random rent hikes. The result is a 40-unit complex known as the Casa del Maestro, the first teacher-apartment building developed by a school district in California--and possibly the nation. Built on land that housed a former school, the apartments cost Santa Clara $6 million. The units were made available by lottery to teachers as well as nurses and counselors who have worked in Santa Clara schools for fewer than three years.

"I thought we could build high-end apartments so teachers could save money to use for down payments on a house after five years," Perotti says. "These apartments are 40 percent of the going rate for apartments in the area."

Perotti is also developing a program with Intel Corp. that will help teachers buy a home. The program will lend a first-time homebuyer $500 a month for five years. The repayment plan, Perotti insists, is "very supportive."