Housing costs squeeze nonprofits

Tim Clark

Tim Clark

In 2017 and 2018, the Legal Aid Society of San Mateo County lost three attorneys to Sacramento. Better jobs? Higher pay? More fulfilling work?

None of those. Each of the three cited Bay Area housing costs as a reason for leaving. Another left because the daily commute from less pricey Pittsburg (in East Contra Costa County) to Redwood City was unsustainable.

“For our younger attorneys, the cost of housing in this region makes it tougher for them to stick with us even though we’ve raised salaries. Recruitment has been tougher too,” says M. Stacey Hawver, executive director of Legal Aid Society of San Mateo County. After a rash of departures in fall 2018, LASSMC raised the starting salary for attorneys 11.3% and the starting salary for entry-level employees 16.5%.

“To absorb that increase into our budget, we collapsed two attorney positions into one,” says Hawver, who hopes to raise additional funds to restore the lost attorney position. She also expects to raise salaries again in January to keep pace with other nonprofit law firms. Since 2016, LASSMC has increased the starting attorney salary by 21% and the entry-level non-attorney salary by 37%.

It’s a similar story at many other nonprofits in San Mateo County being squeezed by the Bay Area’s escalating housing costs. Rents or house payments are reinforced by the associated traffic that engulfs people who move to the outskirts of the Bay Area in search of cheaper homes, only to discover that many others pursued the same dream and are clogging roadways.

“The very people working with low-income residents to keep them in housing are themselves at risk of losing their own housing,” says Bart Charlow, CEO of Samaritan House in San Mateo, a nonprofit that addresses food, housing and financial empowerment for low-income clients. “Nonprofits are not able to pay well, and our staff can’t pay for their housing in goodwill.”

Instead, they pay in time spent in a vehicle. “We find that among nonprofits more and more workers are living in southern Santa Clara County, Alameda County, Contra Costa and even Vallejo,” Charlow says. To serve 14,000 clients, Samaritan House’s financial constraints mean that in addition to its 83 paid employees, it needs 3,300 unpaid volunteers to address its mission.

Nonprofit salaries are part of the problem. In the latest U.S. government statistics, San Mateo County’s cost of living puts a single person with an income of up to $56,420 as “very low income”; for a family of four, the very low income figure is $80,600. The median income for a family of four is $136,800, a figure higher than some nonprofit executives make. Many nonprofit workers fall below the very low income benchmark.

At Peninsula Family Services in San Mateo, housing issues are especially acute for its 80 teachers in its child development centers. The agency’s early childhood educators, who teach children ages 0-5 years, are generally at the low end of occupational pay scales. “It’s a low-wage field and it’s expensive to live here,” said Heather Cleary, CEO of PFS.

“We have temporarily shut down classes a few times for staffing reasons,” Cleary said, shifting students and teachers around to meet required staffing ratios. At the same time, PFS did not enroll new children from its lengthy wait list.

“It’s a huge challenge,” said Cleary of the housing crisis’ impact on her agency. “We’ve had a hard time recruiting for all positions,” adding that since she started at the agency in 2010, it has never had a full complement of teachers. She mentioned a currently unhoused teacher with a disabled child who are temporarily living in a Holiday Inn while seeking housing that is both affordable and offers wheelchair access—a difficult combination.

Part of PFS’ problem is that teacher wages are tied to the state government’s reimbursement rates for early childhood education, so Cleary spends time in Sacramento lobbying for higher rates that can translate into higher teacher salaries.

If the housing problem seems clear, the solutions are complex and controversial, which may explain why San Mateo County nonprofits have been reticent to speak out for affordable housing. “Housing is tricky,” says one nonprofit executive. “I have donors on all sides of that debate.”

Other agencies may fear they will look bad if they talk about staff turnover, fearing that would-be job candidates might spurn them. Or that the topic will come across as too negative or reflect badly on the organization. Or that, like Cleary, they would rather focus on agency revenue than wade into the sometimes-fraught politics of housing.

Nonprofit leaders are clearly hoping someone else raises their concerns, both to amplify individual agency voices and to insulate agencies from political fallout. In June, state Sen. Scott Wiener, an outspoken housing advocate whose district includes parts of north San Mateo County, spoke at a forum on “Housing the Nonprofit Workforce and Clients - Opportunities and Challenges.”

“In the Legislature, we often hear from housing developers and housing advocates about the need for more housing at all income levels. But we know that California’s severe housing crisis also impacts our nonprofits and their staff,” said Wiener after the forum. “When workers cannot afford to live in their communities, it makes it harder for nonprofits to provide much-needed services.”

The Wiener forum was organized by Thrive, The Alliance of Nonprofits for San Mateo County, a sort of chamber of commerce for nonprofits that boasts more than 200 members. Thrive will be presenting its own housing policy statement that reflects how the housing crisis is affecting nonprofit workers, a step that both Cleary and Charlow would welcome.

The housing crisis “affects the nonprofit workforce and therefore our ability to serve,” Thrive’s document states. “Nonprofit staff provide most of the services for these [low-income] populations, yet increasingly they cannot afford to live here themselves. Recruitment and retention have become a serious challenge for our sector.”

The document recommends multiple specific policies and reminds lawmakers that many nonprofit workers make significantly less than public sector workers such as teachers and firefighters. They serve the most vulnerable in our communities, but their own needs are not being addressed.

Tim Clark is a partner at The FactPoint Group a Silicon Valley-based research, and consulting firm that is dedicated to the business improvement of its clients. Tim has been vice president at Net Market Makers, a Berkeley-based firm that did pioneering B2B research and market development. Prior to that, Tim was a reporter and editor for 24 years, working as senior editor and e-commerce columnist for CNET's News.com, Interactive Week and Advertising Age. He also has been an editor at San Jose Mercury News, San Francisco Business Times, and Palo Alto Weekly. In addition to his role as a FactPoint partner, he is the author of B2Bwatch, FactPoint's electronic newsletter of news and analysis of Internet commerce. Tim’s background as a journalist and B2B commerce analyst has earned him a respected byline in the industry. He holds a AB (with honors) in history from Stanford University. A concerned citizen who wanted to learn more about the issues facing low-income persons in our community, Tim got in touch with the Legal Aid Society of San Mateo County shortly after the 2016 election and has remained a dedicated volunteer ever since.