Mount Albert Grammar School headmaster Patrick Drumm says the school has been forced to take action to respond to the housing shortage, because it couldn't wait for the government to do something.

Headmaster Patrick Drumm motions at the honours boards on the walls of the school hall. Written in gold are long list of the names of past prefects, school duxes and sports captains. This is the college that taught everyone from Sir Peter Snell to Sonny Bill Williams, from businessman Sir Woolf Fisher to prime minister Sir Robert Muldoon.

Now, with a roll of 3006 students and 180 staff members, Mount Albert Grammar School is chocka. It probably needs a stadium, not a hall. According to the Ministry of Education, it is further beyond capacity than any other school in the country, short 10 teaching spaces – 10 classrooms in the old parlance.

Officials have signed off a major project to build 12 new teaching spaces, to be completed in 2019.

JASON DORDAY/STUFF Mt Albert Grammar School headmaster Patrick Drumm says turning the building into teachers' accommodation is a "future-proofing" decision.

But that doesn't solve the problem on its own. Demand to live in the leafy green suburbs of the Mt Albert Grammar zone is such that houses sell for an average $1.3 million. A secondary teacher's starting salary is $51,200. They can't afford to live there.

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Now Drumm says he has given up waiting for the government to do something: an old retirement home that the school was converting into a girls' boarding hostel will instead by fitted out as subsidised flats for 10 young teachers.

JASON DORDAY/STUFF With a roll of 3006 students and 180 staff, Mount Albert Grammar School is the country's most crowded school.

"It's an issue that has been brewing for quite a while," he explains. "A school like Mount Albert Grammar has to be proactive about this. We're making a substantial statement."

Abandoning the plans to open a girls' hostel on Lloyd Ave is a substantial about-turn for the school. The boarding house would have been a final step to becoming a contemporary co-ed school, a journey that started when the school first opened its big wooden doors to girls in 2000.

Nestled between orange-roofed homes, the 1800sqm weatherboard hostel cost the school $3.4 million to buy. It is spending still more to give the 700sqm building a facelift.

JASON DORDAY/STUFF Mount Albert Grammar School opened in 1920 as an all-boys school and has taught the likes of Sir Robert Muldoon, Sonny Bill Williams, Sir Peter Snell and Sir Woolf Fisher.

The bold and expensive step comes as the Auckland Secondary Schools Principals' Association warns that 6500 high school teachers are needed over the next 20 years to help tackle the teaching shortage in the region.

Drumm says schools are core infrastructure for our communities, just like roads and hospitals.

But there is a nationwide crisis in recruiting and retaining teachers, especially in Auckland. "We're making a significant and strategic move which we shouldn't have to do," he says. "This is one small step."

JASON DORDAY/STUFF The former rest home will become teachers' accommodation for 10 Mt Albert Grammar School teachers, from May.

There is a quid pro quo for the 10 teachers living in the affordable flats, just six minutes' walk away from the school.They will be required to lead co-curricular activities like coaching sports teams or helping with the performing arts.

That, Drumm hopes, will help the school fill its honours boards with a new generation of high achievers.

"It's hard for teachers to be involved if they're travelling significant distances so we wanted to make it easy," Drumm says. "This is a win-win."