The Bettendorf School Board unanimously voted to sell Thomas Jefferson Elementary School to a construction company at a meeting on May 6.
Students at both Thomas Jefferson and Mark Twain Elementary Schools are preparing to merge into a new building next year.
"I think that luckily the board is attempting to make the best of a terrible situation," said Becca Eastman. She has a student who attends Thomas Jefferson Elementary School. "It's a tough pill to swallow but it's one that we are being forced to."
Applestone Construction Company plans to demolish the old school building and build nearly 30 new homes in the area.
The homes will cost about $300,000.
The sale of the school building will likely bring new life to a property that would otherwise sit empty.
"We had a lot of concerns. The number one was having it sit empty and deteriorate. You see that all over the quad cities," said Eastman.
"Schools are very difficult to sell because they really only have one use," said Bettendorf Schools Superintendent Mike Raso. "We were looking for an opportunity for someone, a developer, to come in and put some housing there and to take the building down.
The district plans to give $10,000 back to the builder for every home built within an 8-year period for up to 10 homes.
However, it is the long-term impact that could really help the district financially.
"It helps us with the tax base and also with the students that move into those facilities," said Raso.
Some people say they are losing the centerpiece to their neighborhood, but gaining new families may be the best alternative they have.
Editors note: An earlier version of this story said that the district would be paid $10,000 per home for each of the first 10 homes built. That has been corrected.