"Missing middle" in crisis Bay Area’s rising rents and high home prices unsustainable for teachers

For six years, chemistry teacher Andrew Irvine, 39, lived in a single-family home in Willow Glen, a largely residential neighborhood of San Jose about five miles from the upper school. Last year, he received a notice from his landlord that the rent would be increased by 22 percent, from $2,700 a month to $3,300 a month.

This was a price Irvine and his wife, who works as a nurse in San Jose, could not afford. The landlord decided to evict Irvine and his family.

“There’s no restriction on no-cause eviction on single family homes [in Willow Glen]. We had no legal recourse,” Irvine said.

Priced out of the Willow Glen rental market, Irvine sought the relative stability of owning a home. But with the Bay Area’s housing costs, finding an affordable home close to the upper school proved a challenge.

Irvine looked to Boulder Creek in Santa Cruz County. In addition to the more affordable home prices, the town’s woods and spacious mountain roads appealed to Irvine, who wanted room to grow cacti and keep a pet turtle. With some family support, Irvine was able to get a down payment that made his mortgage payments comparable to his previous rent.

His commute time more than doubled with the move, from 20 minutes to 45-60 minutes.

Irvine’s experience with rising rents, unaffordable home prices and a long commute is shared by many teachers across the Bay Area, who are finding it increasingly difficult to keep up with the high cost of housing in the region.

The Bay Area is one of the most expensive housing markets in the U.S. and also has the fastest-growing home prices. According to the Metropolitan Transportation Commission, home prices in the Bay Area are nearly twice that of New York and D.C. metro areas and increased by 143 percent from 1997 to 2018.

The median home value in Santa Clara County is currently priced at $1,073,255. The median rent for a one-bedroom apartment in the Bay Area is $1,975 a month, or $23,700 a year, which is 16 percent of an average Bay Area software engineer’s annual income, 29 percent of an experienced Bay Area public school teacher’s income and 81 percent of a full time Bay Area Starbucks barista’s income.

Spending more than 30 percent of household income before taxes on housing is defined by the U.S. Department of Housing and Urban Development as being cost-burdened. Spending more than 50 percent is defined as being severely cost-burdened.

According to the latest census data, in the Bay Area in 2018, 48.1 percent of people were cost-burdened, and 23.9 percent of people were severely cost-burdened.

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.”

As home values exceed affordability, many teachers are leaving the Bay Area in search of cheaper and more attractive housing options. Ravel has personally helped many teachers leaving the Bay Area sell their homes, including one couple teaching in the Cupertino Union School District.

“They had a townhouse in Santa Clara. They wanted a home with a yard because they had a dog and a daughter, and the realtor told us that it wasn't possible so they moved to Portland, Oregon,” Ravel said.

According to Irvine, several upper school faculty and staff members have moved to the mountains in Santa Cruz County for more affordable housing that meets the needs of their families. English teacher Beverly Manning is one such teacher.

A major reason I decided to live [in Santa Cruz] was the somewhat more reasonable price of living. I love this area [near the upper school], but the housing prices are astronomical. On a teacher’s salary, it’s not too reasonable to be able to live in the heart of the Bay Area and still manage other expenses," Manning said.

Similarly, when English teacher Brigid Miller’s family needed a larger house to accommodate the arrival of her second child seven years ago, they moved from a home in Santa Clara a mile and a half from school to a home in the Santa Cruz mountains about 20 miles away.

A house with the same acreage in Santa Clara County would have been unattainable for Miller and her husband, Lester, a systems engineer in Los Gatos.

"Things are still expensive in Santa Cruz, but not nearly as expensive as here. But the commute can be an issue. And that’s the downside," Miller said.

Miller’s commute home, after picking up her two children from the middle school and the lower school, ranges from half an hour on a good day to two hours on a bad day.

“On the best possible day, no accidents, no major traffic, we get home at 4:30 p.m. That’s a dream day though. Then it’s on to dog walking and dinner making, while kids do homework,” Miller said. “When I have a faculty meeting after school, I’m not getting home until closer to 6 p.m., which makes a mess of the schedule.”

Teachers are not the only ones leaving the area.⁠ In 2018, for the first time in a decade, more people left the Bay Area than moved in, creating a net loss of 3,013 people.

According to Xu, many people also leave the Bay for much farther locations: Sacramento, Seattle, Texas, Florida and even Mexico.

Larsen will be one of those people when it comes time for retirement. He and his wife plan to eventually leave the state.

"I would love to be able to stay here. I love California," Larsen said. "I don’t think I can afford to, and that saddens me."

Though people are leaving the Bay Area now more than ever, those moving out tend to be older and lower-income compared to those moving in. As a result, housing prices and demand for housing remain high.

Barriers to entry

With prohibitively expensive housing costs near the upper school, administrators have to consider the housing barrier when trying to recruit and hire highly-skilled teachers.

If a potential new hire were to interview at the upper school, the second or third question Head of Upper School Butch Keller would ask them would concern their housing situation.

Would they have to move locations to teach at the upper school? Are they prepared for the high housing costs in the Bay Area?

For most people who would answer yes to the first question, the answer to the second question is no.

“Housing might be the number one factor [in new teachers’ decisions to come here], and it didn’t used to be that way,” Keller said. “I remember my first year here [in 2007], I went to New York [for a teacher job fair] and I was interviewing teachers for days, and it didn’t matter where they came from, it just wasn’t a big deal. Five or six years ago it became a big deal.”

According to Head of School Brian Yager, while it’s become harder to attract people from outside the Bay Area, Harker still recruits nationally through a network of search consultants.

But the school has become “cautious” about recruiting teachers outside of the Bay Area, according to Keller.

While the constraints on recruitment haven’t impacted the quality of teachers here, Keller said, it has limited the diversity of perspectives that teachers bring to the table.

“I think Mrs. Keller and I bring something different to San Jose because of where we’re from [Virginia]. That [diversity] might not happen,” Keller said.

Many upper school teachers recalled the difficulty of coming to teach in the Bay Area even several years back. A series of exceptional factors helped them make the leap.

Biology teacher, Dr. Thomas Artiss, 53, moved to California from Seattle in 2011, after meeting his wife, who already owned a house in Santa Cruz that she bought 20 years ago. His wife works in information technology in Pleasanton with a salary “considerably greater” than his, and their combined incomes allow them to comfortably afford the home.

Dr. Artiss, who has worked at Harker for eight years, emphasized that his situation is “unusual” for a teacher.

If I tried to move here on my own, especially when I was single and starting out teaching, I would never be able to own a home in Silicon Valley. I would barely be able to afford a decent apartment in the Bay Area,” Dr. Artiss said.

Director of Journalism Ellen Austin, who relocated to the Bay Area in 2007 from Minnesota, where she owned a home, also said that her circumstances of moving were “unusual.” A student’s family at Palo Alto High School, where Austin had accepted a teaching position, had a spare home that they offered to Austin at a below-market rental rate.

Otherwise, she said, she would not have been able to move, though her new salary in California was nearly twice her teaching salary in Minnesota.

“Their sub-market rent that they were charging me was more than if I had had a house payment and a rental payment for an apartment in Minneapolis,” Austin said. “To get into a door here, someone coming from a place like that is going to be looking at double, triple, quadruple, sometimes quintuple what their housing is where they’re currently living in the U.S.”

Support for teachers

Bay Area schools are aware of the problem teachers face, and several districts and individual schools are trying to solve it⁠ — including Harker.

Yager and Keller said that faculty and staff salaries are adjusted each year for cost of living.

Part of the reason tuition goes up each year is to allow us to compensate our faculty more every year. We try to keep pace with the rate of inflation in the Bay Area, which factors in housing cost increases, it’s not just cost of bread and other stuff,” Yager said.

According to Yager, last year Harker teachers’ salaries were increased by 3.75 percent to keep pace with the rate of inflation in the Bay Area, which was higher than the national rate of two percent.

While Yager could not disclose the typical salary of a Harker teacher, he said it is on the “upper end of salaries for educators,” though some nearby public school districts pay their teachers more on average.

“The compensation for educators is higher here than elsewhere. The question is, is it enough to overcome the differential in the cost of living,” Yager said. “It’s a constant balance, and that’s a challenge for us.”

Harker also provides subsidized housing to a limited number of its faculty and staff. It owns 15 housing units in four apartment buildings within walking distance from the upper school, where a mix of teachers, maintenance staff and kitchen staff live.

One unit is dedicated to housing interns who stay on a six-month rotating basis through Harker’s kitchen intern program. Harker’s Head Chef Steven Martin, otherwise known as “Chef Steve,” praises Harker for providing the apartments for his interns, all of whom are sourced from Johnson & Wales University, his alma mater.

“It is a great situation because we have a resident assistant who monitors their behavior. It is a structured environment for them while they are away from home,” Martin said.

Currently, Harker’s apartments are full, with a waitlist to get in. There is no time limit for staying in the apartments.

Larsen lived in one of Harker’s apartments behind Dobbins Hall from 1997 to 2002 after getting an apartment spot by lottery.

He then moved out and bought a condo with his first wife. When their relationship ended in 2004, he checked back with Harker’s apartments, which happened to have an opening, allowing him and his two children to move back in until he chose to move out again in 2012.

“The apartments were never huge, but they were suitable for me and my children and worked well enough for what we needed to do,” Larsen said. “The convenience of being that close, being able to get home really fast at the end of the day, walking into work not having to worry about parking, that was tremendous, especially at a time of my life when I needed it. I was very grateful to have the resource.”

Though it would be unfeasible for Harker to expand its subsidized housing units now, Larsen said, they have been a huge help to teachers dealing with high housing costs and difficult commutes.

For other teachers with large families or many pets, Harker’s apartments might not be a viable solution. For example, Manning has several pets that she keeps with her on her Santa Cruz property.

“Between me and all the animals, I’d be put in a contentious situation, and there’s no way I can house them all in a small apartment with me,” Manning said.

Other school districts have attempted to retain teachers in the area by helping them become homeowners closer to school.

Palo Alto Unified School District set up a glide path for teachers to get approved for mortgage loans, which helped Austin purchase a condo in Sunnyvale in 2010. Austin had also sold her home in Minnesota in May 2008, which helped towards the purchase of the Sunnyvale condo.

When I moved to California, I let go of the idea that I would own property ever again. I had a good situation, I had a lot of luck, I had a lot of help from people who wanted me to come here and found ways to jump over the structural problems like helping to find a home at below-market rents,” Austin said.

She was also helped by Ravel, who rebated 25 percent of her own commission to help teachers in the area with closing costs on a home. Many of the teachers Ravel has helped over the past 12 years grew up in the Bay Area but found it increasingly difficult to stay and teach in their hometowns.

“I’ve been doing this for a long time, and real estate has been good to me, so I feel like if I can try to help people get into a home by rebating a portion of my closing cost or commision then it is fully worthwhile,” Ravel said. “I have more appreciation for closing a deal that has more history behind it than for someone buying a property as another investment of theirs.”

Ravel worked with a loan agent at Transpac Mortgage Group in Los Altos at the time.

When concerned parents at Gunn High School in Palo Alto reached out to this loan agent for help assisting the school’s teachers with purchasing homes in the area, the agent set up a partnership between their company and realtors, banks, title companies, inspectors and other people who were willing to donate part of their commission or income to closing costs for a teacher’s house, which according to Ravel is typically valued at around $1 million in the Bay Area.

Transpac Mortgage Group conducted lunchtime educational workshops for teachers at schools across the area, helping them understand what homes they could afford and how they could develop the necessary credit.

The mortgage group encouraged teachers to approach the people giving the workshops and ask to work with them on a pre-approval process for a loan. If teachers didn’t have the necessary credit for a loan, the loan agents would set them on a program to qualify for a loan.

The loan agent Ravel worked with has helped over 75 teachers through this program, but hasn’t been able to continue since Transpac Mortgage Group closed in 2018.

City councils and nonprofit organizations are also looking for ways to increase affordable housing options for teachers.

The organization Support Teacher Housing is working to build four units of two-bedroom two-bathroom apartments in Los Gatos for school employees and teachers to live. The apartments, which will be rented out to school employees and teachers at prices below market rate, no more than $2,017 a month, have yet to be built, and their locations are yet to be determined.

Financial support for these four units of apartments, which costs $1.2 million in total, will come from private funding and land donations by the town of Los Gatos, according to Sarah Chaffin, founder of Support Teacher Housing. So far, almost half of the $1.2 million required for the project has been raised.

Chaffin, who used to work in real estate finance and currently lives in Los Gatos, started Support Teacher Housing in 2015 after noticing that her daughter’s preschool was having a hard time hiring and recruiting teachers.

“When we first started our organization, people weren’t even aware that we had an issue [regarding housing in the Bay Area].”

Since then, the shortage of affordable teacher housing has gotten worse.

In August 2019, Santa Clara County also approved a nonprofit developer company, Mercy Housing Management Group, to build a teacher facility in Palo Alto.

This teacher housing project, first proposed by Santa Clara County Board President Joe Simitian in Jan. 2018, is estimated to cost about 36 million dollars, with funding from the Santa Clara Board of Supervisors, the five school districts whose employees will be eligible to live in the facility and Palo Alto City Council.

The Paly Voice and Campanile, student-run publications at Palo Alto High School, have been covering developments in the Palo Alto teacher housing project. The project is currently in its planning stages, with an indefinite completion date.

Chaffin believes that tech companies like Google and Apple could afford to help fund such projects and should contribute as well.

“A major tech company could step up and basically just write a check for the whole [teacher-housing prototype project] and that could reduce rent for the teachers,” Chaffin said.

Like Chaffin, Austin believes that a solution to the teacher housing crisis requires not just the work of individual schools, but a combined effort between school districts, city councils and the corporate sector.

“We’ve got to have a really clear, open and transparent understanding that the clock is ticking. We’re losing teachers at one end of the pipeline, and we’re not getting them back in on the other end of the pipeline. That has an hourglass that’s going to run out within the decade,” Austin said. “So let’s get started on the solution.”