The COVID-19 pandemic adds to the problem. As shelter-in-place orders swept across the Bay Area, thousands of people were laid off from their jobs. Employers filed plans over the first three weeks of April to eliminate around 53,500 jobs, a number almost four times larger than the job cuts filed throughout March. Many people are finding it increasingly difficult to afford already high housing costs.
“Because so many Bay Area renters were already in precarious positions even before the pandemic happened. I think there was a rush to try to protect them. And a lot of people's incomes did dry up,” Bay Area News Group Housing Reporter Marisa Kendall said.
On March 26, 10 days after the Bay Area’s shelter-in-place order, the Santa Clara County Board of Supervisors issued an eviction moratorium aimed to protect renters financially affected by COVID-19 from eviction, and Governor Gavin Newsom issued a similar statewide order the following day.
But these protections will only last until May 31. Many worry that there will not be adequate rent and mortgage relief measures when the shelter-in-place orders are lifted.
“None of these plans can cancel rents or defer rents or subsidize rents or pay for mortgages. So you're going to have a scenario when all of these bills are going to come due,” Dillon said.
According to Dillon, even if housing prices were to fall as a result of the pandemic, incomes are likely to fall faster, leaving as many or more Bay Area households cost-burdened as before.
Wortham believes that greater protections for tenants are necessary to counter this effect.
I think [the government] is working extremely hard to support tenants, both at the state and local level. What I think we're finding is, and this kind of goes back to the fact that the rent is too d-- high, it's still not enough. We're going to have to keep pushing to do more funding programs, like for rental assistance,” Wortham said.
Why are housing costs in the Bay Area so high to begin with? According to Anna Cash, former director of the Urban Displacement Project at the University of California at Berkeley, the answer comes down to a lack of supply.
“The region's bringing in many more jobs than it is building housing, so there's a constrained housing supply that leads prices to go up and up,” Cash said.
Sophie Ravel, a realtor with Keller Williams Realty who works all over the Bay Area, said that another factor is the scarcity of land on which to build new housing.
“We have nowhere to build. We can only build up and housing is getting more and more dense with smaller and smaller homes or condominiums,” Ravel said.
While cities across the country struggle with gentrification, displacement and housing insecurity, these issues are particularly acute in the Bay Area due to the abundance of high-wage jobs in the region. In 2017, the Bay Area added 3.5 times as many jobs as it did housing units.
For decades, Silicon Valley’s booming tech sector has driven this growth in high-wage jobs. In August 2019 alone, tech companies added 2,700 jobs to Santa Clara County.
Harker parent Alice Xu, a realtor at Compass in the Bay Area, observed that most people moving into the Silicon Valley are young, high-income tech workers.
She also noted another unique feature of the Bay Area housing market: foreign investors.
“The Bay Area is not just a local market but also an international market. We attract a lot of foreign investors who would like to either invest in a rental property or in a second home away from home, so we get a lot of international buyers from China, Russia, Europe and of course, Mexico.”
With all this competition for housing, middle-wage earners like teachers are often the hardest hit. This “missing middle” population earns too much to qualify for subsidized housing units but not enough to afford homes in more expensive Bay Area neighborhoods, preventing teachers from living in the communities in which they teach, creating long commutes and limiting teachers’ abilities to engage with students and school activities.
In some cases, teachers have had to leave the Bay or give up teaching entirely.
Priced out of rentals
For many Bay Area renters, wages have not kept up with housing cost hikes.
Between 2010 and 2019, average rent in San Jose increased by 74 percent from $1,550 to $2,697, while median household income increased by just 51 percent from $76,730 to $115,862.
On Jan. 1, California enacted statewide rent control. AB-1482, the Tenant Protection Act of 2019, limits annual rent increases to 5 percent plus local inflation but only applies to units at least 15 years old.
Before AB-1482, Bay Area cities differed in the amount of rent control they had, if any. Some teachers, like Irvine, faced rent hikes of over 20 percent in a year. Many upper school teachers chose to live farther from the upper school, in areas that limited rent increases.
“Our rent when we were in San Jose was jumping by huge amounts whenever they wanted to raise the rent, and we had no safeguards for that,” said upper school theater teacher Jeffrey Draper, who moved to San Francisco 17 years ago and started teaching at Harker 20 years ago. “I think it would be really a challenge for us to have stayed in a region without rent control.”
Draper said that he “lucked into” an apartment in San Francisco with a three percent per year cap on rent increases, which has protected him from rent hikes in the city. Currently, he pays $2,000 per month in rent, while his neighbors pay $5,500.
One of the trade-offs is the 45-minute commute, assuming that Draper leaves at 5 or 6 a.m. to beat the morning rush.
It’s not an amazing apartment, there are things we complain about, but because we have rent control, it’s too expensive for us to move, so we’re sort of stuck with it. Luckily we’re happy,” Draper said.
For many teachers, finding an affordable place to live isn’t possible without outside help or an additional income.
Matthew Seymour, a third grade teacher at Hacienda Environmental Science Magnet School in San Jose in his eighth year of teaching, lives in a two-bedroom, two-bathroom San Jose apartment with a roommate to help manage the cost of rent. Currently, with the onset of the coronavirus pandemic, he has transitioned to teaching students remotely.
When Seymour began teaching in 2012, his rent was only $600 a month, compared to the nearly $1600 per month he pays now.
Seymour earns $73,400 per year, meaning that 26 percent of his income before taxes goes toward rent. Without a roommate, 52 percent of his income would go toward rent.
“There’s not a single unit in the valley I can afford to rent on my own,” Seymour said.
Though having roommates helps Seymour make the rent, it comes with its own set of challenges.
In one of Seymour’s previous living arrangements, he rented out a room in a townhouse. Every room was rented out with its own contract, so he had no say in who his roommates were and had to deal with a host of difficult roommates, who he said ranged from alcoholic to racist and transphobic. At times, Seymour had to reconsider bringing students’ papers home to grade because he felt like he could not trust some of his roommates.
As his roommates changed out every four to six months, Seymour had to adapt his daily routine to each new set of people. Sometimes he would not even be told of the change in tenants.
You’re sharing the bathroom in the morning, you’ve got to come up with a new schedule. There’s a car garage [where] one car [is] in front of another. Every four to six months, you’re re-negotiating who’s parking where,” Seymour said.
This kind of lifestyle can be unsustainable.
“All that kind of stress that comes from [challenging living situations] is something that affects you when you go into work,” Seymour said.
The insecurity that comes with renting in the Bay Area means that many teachers live with the anxiety of potentially having to one day leave the region or give up teaching altogether.
Upper school visual arts teacher Trish Ludovici, like Draper, benefits from having rent control on her Oakland home, where she lives with her husband, who is also an artist. She has lived in Oakland on and off for 17 years, with brief periods of time when she lived in Seattle and Berlin, and began teaching at the upper school last year.
While Ludovici’s commute often takes up five hours of her weekday, she can’t afford to rent closer to the upper school.
“My home is falling apart. But one of the reasons I have kept my home is that I have a certain amount of rent control,” Ludovici said.
Despite having rent control, Ludovici worries about whether it will be sustainable for her and her husband to stay in the Bay Area long-term.
With student loans and no parental assistance, Ludovici and her husband are finding it difficult to save up for the high cost of homeownership in the region.
“If our house got sold, I don't know that we could afford to rent another place in the Bay Area and sustain and save any money towards owning anything,” Ludovici said. “So then you have to do the math, right? Is it better to take a job someplace else that pays you less, but you save more money and you can afford a house later on? I don't know.”
A real estate sign advertises available housing in Cupertino. The growing cost for rent in the Bay Area has made it impossible for many teachers to afford living here, forcing several to leave the region or give up teaching altogether. (Eric Fang)
Leaving the Bay
According to a local senior loan officer who has helped over 75 Bay Area teachers get mortgage loans approved, owning a house gives teachers a much better chance of being able to continue teaching where they are. Monthly mortgage payments are fixed for a number of years, while rents typically increase every year.
But owning a home in the Bay Area isn’t a possibility for most people on a teacher’s salary.
According to the senior loan officer, in other parts of the nation where home prices and wages tend to be lower, teachers may be on an equal footing with other buyers. Here, teachers face competition from buyers with a lot more income and a lot more cash.
According to the U.S. Census Bureau’s latest American Community Survey, median monthly owner costs in Santa Clara County were $2,439 in 2018. According to a study by Realtor.com in 2018, the San Jose-Sunnyvale-Santa Clara metro area had the highest down payment rate in the nation, at 23.9 percent of the house’s sale price. From March 2017 to March 2018, the average down payment in San Jose was $257,000, which would require saving $51,400 every year for five years, or $25,700 every year for ten years.
By comparison, the median home value in Chicago in 2019 was $261,000, with a median monthly mortgage payment of $1,276 and 20 percent down payment of $52,200, according to homeownership investment company Unison’s 2019 Home Affordability Report.
For Harker production manager Brian Larsen, 52, who has taught at Harker since 1996, these costs mean that he and his family will continue to rent, despite the possibility of having to move on short notice.
For seven years, Larsen, his wife and six of their children had lived in a four-bedroom, three-bathroom house they rented in San Jose about five miles from the upper school.
“In October of this past year, our landlord sold the house, and we had to move quickly, so we found another place that was sizable to accommodate us,” Larsen said. “We have five total people at home right now, so three-bedroom two-bath, but we rent because there’s no way we could purchase in the valley right now.”