When the city offered $50,000 in housing assistance loans to teachers, it was assumed teachers would jump at the opportunity to buy homes where they worked. After nearly two years, however, not one teacher has used these funds. So the city is increasing the size of its loans.

Rather than four loans of $50,000 each, the city is now offering three loans of $66,000. The money--collected from fees paid by developers--is to be used as loans for down payments. Full-time faculty members from the Cupertino Union School District, the Fremont Union High School District and the Foothill­De Anza Community College District are eligible to apply.

"We'll see if the $66,000 tempts anyone," said Vera Gill, a Cupertino city planner who oversees the teacher housing initiative.

The initial offer of $50,000 clearly did not prove tempting enough, attracting just four prospective applicants since its launch in May 2003. None of the applicants ended up buying a home in Cupertino.

Councilwoman Dolly Sandoval attributed the limited response to a strong market for apartment rentals and to the high overall cost of homes in Cupertino.

"If the average home costs more than $700,000, then a $50,000 down payment isn't going to cut it," said Sandoval, a high school teacher in Los Gatos.

According to the Cupertino Union School District, in 2003­04 the average teacher earned $57,000.

Sandoval said the Cupertino Union School District lost numerous teachers several years ago because of the high cost of homes. "People would endure a long commute to get [teacher] training here, then leave to teach closer to home."

"The problem is not with teachers or the city," said J.R. Wheelwright, a program manager with Neighborhood Housing Services of Silicon Valley. Cupertino contracts with the organization to administer the housing assistance program. "The problem is there is no affordable housing in Cupertino."

In December, a report released by the Bay Area Council gave the city a D- for its affordable housing efforts.

Sandoval sees the teacher housing program as a means to rectify that situation.

"I would like to see it grow to other public employees," she said, pointing out that firefighters and police officers could also benefit from such a program.

For now Cupertino hopes the increase to the loan program will be enough.

"It's an important issue to keep teachers here," said Wheelwright.

Sandoval agreed, noting the importance of teachers being involved in their communities and having adequate time to prepare lessons and grade papers.

"We need people to recognize that the city wants to keep its teachers here," she said.