New Survey Shows Real Estate Boom Threat to Nonprofits Across Bay Area

A new survey of Bay Area nonprofits, led by the group Northern California Grantmakers (NCG), finds that 82 percent of respondents are worried about whether they can survive because of the region’s booming real estate market. KQED obtained the survey results ahead of their release on Wednesday.

Relocation woes

One of the most chilling of the findings is that 68% of the non-profits surveyed think they may have to move in the next five years, because of skyrocketing commercial rents.

“It’s a pretty scary number,” says Steve Barton, a strategic alliance consultant for NCG. “And they’re going to come right into this maelstrom of real estate here, where they’re going to be very challenged to find space they can afford.”

Nearly five hundred nonprofits funding arts and culture, education, youth development, and services to the poor responded to the survey, out of a total of 34,000 organizations in the Bay Area. Barton says the result reveal that nonprofits have the same anxieties about soaring rents across six Bay Area counties: Santa Clara, San Mateo, Contra Costa, Marin, Alameda and San Francisco.

“There’s uniform worry, uniform concern,” Barton says.

But Barton says the rental crunch is most acute in Oakland and San Francisco. Take Litquake, which stages regular literary events and a big festival every year. The organization participated in the survey. “We’ve had three different office spaces within the last ten years,” says Litquake executive director Jack Boulware.

“Already most of our staff and volunteer committee cannot afford to live in San Francisco any longer,” Boulware says. “So people have to commute in.”

Litquake is one of the 38 percent of nonprofits surveyed who say they’ve had to relocate in the past five years.  “Organizations that don’t own their own space or have a long term lease feel very threatened,” says John McGuirk, program director for the performing arts program at the William and Flora Hewlett Foundation. NCG tapped the grantee lists of Hewlett and other local funders for the survey.

McGuirk notes that some of Hewlett’s grantees have recently lost their homes because of rent hikes or the sale of a property. These include Zero One, a tech arts festival in San Jose, and The Mural Music and Arts Project in East Palo Alto. “So they’re trying to figure out what do they do to remain rooted in the communities they’re designed to serve,” McGuirk says.

Safety net services particularly challenged

The survey also found that displacement is especially challenging for nonprofits providing safety net services to the poor and communities of color.

Bob Uyeki is CEO at Y & H Soda, a private anti-poverty funder. Some of the funder’s grantees took the survey. Uyeki works in the East Bay, funding groups ranging from Youth Radio to the Vietnamese American Community Center of the East Bay.

“Those are organizations that play a key role in neighborhood identity and culture,” Uyeki says, “And as they disappear the local culture also shifts. So I think it definitely accelerates the process of gentrification. ”

NCG’s Barton says the survey is designed to guide local grant makers in their funding policies, and suggests some ideas for making nonprofits more secure.

Making nonprofits more secure

Topping the list of suggestions is aiding nonprofits in buying their own spaces. Hewlett provided seed money to the Movimiento de Arte y Cultura Latino Americana (MACLA), a Chicano/Latino-focused contemporary arts space, for the purchase of its home in San Jose’s SOFA district.

Barton says sharing space is another option, as at the Flight Deck performance space in Oakland, or the Sobrato Center for Nonprofits in San Jose.

Barton hopes the survey will focus the attention of Bay Area lawmakers on a problem he thinks has been widely ignored, encouraging them to offer nonprofit-friendly zoning rules and incentives to developers.

Boulware says he hopes the survey inspires people to act, because time is running out.

“I would love for people to take a hard look at what sort of city they want to see in five years,” Boulware says. “The personality of the city is going to suffer.”