A New Haven child care provider is investing in rent-free housing for its teachers, hoping to ease a major household expense and make it easier to recruit and retain early childhood educators.
Friends Center for Children plans to hold a grand opening for its five-home housing village on Howard Street on Oct. 15. Earlier that day, it will host a gathering at Hotel Marcel to discuss how other communities might adopt the model.
The development is the nonprofit’s first intentionally designed teacher housing village, but it builds on a rent-free housing program it has operated in New Haven since 2020.
Friends Center CEO Allyx Schiavone said the idea grew out of a persistent problem in early childhood education: The cost of providing care exceeds what many families can afford to pay, leaving programs with limited room to raise wages.
“Salaries are 75% of any early care and education budget, so you just depress the salaries,” she said.
Before the pandemic, Friends Center surveyed its teachers about expenses it could help them reduce. Housing emerged as a priority.
The program began in 2019, when philanthropists Susan and Greg Melville purchased two New Haven properties and donated them to Friends Center. The properties, which included about 2 acres and a three-family home, cost a combined $700,000 and provided four housing units, Schiavone said. Friends Center began providing rent-free housing to early educators in 2020.
The nonprofit has since expanded beyond those initial properties. In addition to the five-home village it plans to formally open on Oct. 15, Friends Center owns four other homes comprising eight housing units elsewhere in New Haven.
Schiavone said the average Connecticut early childhood educator earns about $34,600 a year. Friends Center estimates that teachers in its housing program avoid an average of $23,000 in annual rent.
In one example provided by the organization, an entry-level educator earning $36,358 receives a one-bedroom apartment with an estimated annual market rental value of $16,800. Friends Center puts the combined value of the wages and housing at $53,158.
The housing initiative fits into a broader debate among state lawmakers over how to attract and retain child care workers. Connecticut has deposited more than $700 million into an early childhood education endowment intended, in part, to address that shortage.
Schiavone, who serves on the fund’s advisory board, said housing could complement the state’s investment.
Long-term investment
Friends Center estimates its broader 24-unit teacher housing initiative will ultimately represent about $3.8 million in acquisition and development costs. It estimates the units will provide about $545,000 a year in housing benefits, based on their market rental value.
After about $100,000 in annual property taxes, maintenance and other costs, Friends Center calculates a net benefit to teachers of roughly $445,000 a year.
Rather than spending that amount annually on compensation, Schiavone argues, the organization retains an appreciating asset that can continue providing housing year after year.
“These properties that we have built right now are at around $6.4 million in value,” she said.
The housing initiative represents a sizable investment compared to Friends Center’s operations. The nonprofit reported about $5.13 million in operating revenue and an equal amount in operating expenses for the fiscal year ended June 30, 2025. Salaries and benefits were its largest expense, at nearly $3.2 million. Friends Center also reported about $3.64 million in restricted expansion revenue and more than $5.15 million in contributions during the year.
The organization calculates an annual cash return on its approximately $3.8 million investment in housing of about 11.6%. It estimates a much higher societal return when the economic benefits associated with child care and housing are included.
The nonprofit pays property taxes on the homes because they are not being used directly for its tax-exempt child care operations, Schiavone added.
Stepping stone
Teachers don’t own the homes. They pay utilities but no rent, while Friends Center covers maintenance.
The housing is deliberately located within walking distance of Friends Center’s schools, reducing teachers’ commuting needs. Schiavone said the organization, which has three schools all located in the Elm City, follows the same approach for all of its housing villages.
“You want teachers to be in the communities where the children are, and you want them to feel part of the fabric of the community,” she said.
During their stay, residents are paired with financial mentors to establish goals that can include paying down debt, contributing to retirement accounts, purchasing transportation and accumulating enough money for a down payment on a home.
While the housing is free, it isn’t intended to be a permanent residence for each educator.
How long a teacher stays depends on individual circumstances, Schiavone said. A single parent with children might need several years, while another educator could be ready to buy a home sooner.
Schiavone said about 77% of teachers who have participated in the housing program have returned to school to further their education in the field. That can increase their salaries while giving Friends Center a more highly educated workforce and potentially improving retention, she said.
Beyond CT
Meantime, Friends Center is advising groups in Georgia, Massachusetts, Michigan and Missouri that want to create similar housing programs, Schiavone said.
Ultimately, she said, scaling the idea would require combining philanthropy with public and private investment and potentially developing financing structures in which some units initially charge market rents before eventually converting to rent-free teacher housing.
Schiavone also envisions a Connecticut model in which eligibility is tied to working in early childhood education rather than employment by a particular provider.
“We believe this is a replicable model,” she said. “We’ve seen it happen.”
The Oct. 15 event is intended to expand that conversation beyond Friends Center. Organizers say participants will examine financing and public policies that could help make free teacher housing viable elsewhere.
For Schiavone, the broader argument is that Connecticut’s housing and child care shortages shouldn’t be treated as unrelated problems.
“How do we solve problems across silos?” she said. “We think that this is an opportunity to do that.”
Schiavone said the state’s early childhood education endowment is important, but she does not expect it to resolve the workforce shortage by itself.
“The obstacle, as I see it, is it’s not fast enough, and it’s not enough money,” she said.
She argues that teacher housing could complement the state’s direct spending by converting some public and private investment into real estate that provides an annual benefit to educators while retaining the underlying asset.
She stressed, though, that housing is only one piece of a broader solution.
“Our workforce housing is not the solution,” Schiavone said. “Just like the endowment alone is not the solution.”
