Enlightened Self-Interest: Directing Philanthropy to Nonprofit Housing

A Fresh Vision For Philanthropy in the New Year


We enter this new year with a load of social problems, but also the vision and hope to do something about them. Here in San Francisco, few issues have more impact than that of income disparity, clearly visible in the housing crisis for those at the lower end of the income scale—a place occupied by most struggling artists, who haven't launched successful careers. This is a situation shared by many in the community, like our teachers, hospital employees, clerical workers, food service personnel, and others.


The more arrogant among those at the higher end of the economic spectrum dismiss the problem, with remarks like, “If you can’t afford the rents here, move somewhere else,” as seen in discussions on sites like Disqus. This short-sighted position would be laughable if it weren’t a recipe for disaster, and most especially for the very people who would move the lowlyriffraff out.


A recent example of how this reasoning plays out is the closure of a restaurant in the city that had been doing business in the same place for 100 years. For once, it wasn’t a matter of escalating rents that forced another beloved city institution to close. It was the fact that the pool of restaurant workers in the city has diminished dramatically, and they couldn’t keep the place staffed. This was not just their problem. Restaurants all over town are struggling to keep workers, because they just can’t afford to live here.


Anyone who has ever worked in a restaurant knows that the one person most responsible for the smooth functioning of a food establishment is the lowest paid employee, the dishwasher. You can have the most amazing chef in the world, but that doesn’t matter if you don’t have a steady supply of clean plates and scrubbed sauté pans. When your dishwasher doesn’t show up, the smooth, professional flow of a great place to eat becomes a nightmare. Every restaurant needs more than one dishwasher, but few of them can afford housing here, even with the rise in the minimum wage. I know whereof I speak; I owned a restaurant here during the last tech boom. Even then, a lot of our kitchen staff lived 10 to an apartment, sleeping in the beds in shifts, so they could get ahead. How do they have to live now?


We have indisputably become a service economy, and most of the people at the highest end of the income spectrum rely heavily on service industry people to facilitate their luxury lifestyles. But as it becomes harder and harder to live in San Francisco without a six-figure income, the very people who provide the services are driven away. If the current trend continues, those high-level corporate executives will, sooner or later, find it immensely difficult to get served at all. And then they will see why we need low-cost housing. In the meanwhile, countless businesses that can't find workers will close.


The city of San Francisco functions on an annual budget of $9 billion for a population of about 825,000 people. The budget for a city of 49 square miles is greater than the budget for some states. And yet, the city can’t find the money to build low-cost housing. The city’s current policy is to rely on developers to build here, whose investors insist on high profit margins, and they can’t make any real money building low-end housing. So it doesn’t get built, and the cornerstone of the service economy—the service personnel—goes elsewhere. The utter insanity of this policy defies logic.


A current city policy, slipped in quietly while the remaining and exhausted activists weren’t looking, is to tear down parts of about 48 square blocks of four city neighborhoods, in many of which lower income people live and small businesses have existed for years; developers will build ugly new high-rises that will house people with six-figure salaries, with a grudging allowance of low-income units that are only affordable for people making a formerly middle class salary. Such a policy will make thousands of people unable to remain here, and kill hundreds of small businesses that could ill afford to relocate. If such a program came to pass, it would have horrible long-term consequences, like putting other restaurants out of business—because the dishwashers and prep cooks who live in those areas slated for demolition won’t be able to find anywhere else in the city to live.


It is virtually impossible to stop the inexorable devastation of this city when it seems to have been sold it out from under us. We can’t rely on government to act in the interests of the people. If you think City Hall cares about the residents of this city, try to get an appointment to discuss your issues with a civil servant. I spent a year trying. So those of us who still have vision and hope for a just and equitable place to live need to find solutions that do not involve City Hall.


The means, the motivation, and the benefits are all here to retain a balanced social fabric, one that has room for all the essential participants in urban life, and certainly includes the working poor of the service economy that make life a lot nicer for those at the top. They just have to be put together. I am calling for a new kind of philanthropy here, citizens working together to restore a balance, independently of City Hall, in a way that benefits everyone.


I have written about this already, in the context of my own project for housing artists, but it is a way to solve the housing crisis across the board. We have dazzling wealth in this city, and a lot of people who feel good about giving their money to good causes—and, of course, nonprofit donations have a tax incentive. Rather than donating to worthy causes in other places, I would like to propose a more immediate, person-to-person, kind of giving—to local nonprofits, existing and proposed, providing low-cost housing. In particular, I would like to see those buildings now empty for tax purposes filled with residents, which would only give the owners of those buildings the kind of wonderful reputation that money can't buy.


We know that there is now more wealth in this city than we’ve seen since the gold rush. And with wealth comes the interest in tax write-offs. People who buy buildings and leave them empty to show a loss are, perhaps unwittingly,  part of the problem. But they could provide the same buildings for a nonprofit to use, for very little money, get the same loss, and be heroes instead. The implications of putting money to this use are far-reaching. Nonprofit housing is good for the people who are not well paid and can remain here. It keeps businesses alive by providing a decent labor pool, and supports the local small business economy by providing a customer base, people who spend money in corner stores, laundromats, burrito joints, cafes, and other small establishments. It helps retain the diversity of the city population and insures that those who want good service can have it. Yes, we obviously can’t live these days without the services provided by tech industry giants. But our lives would be infinitely worse, and not better, should they be the only services left.


A push for nonprofit housing is a concept that gives us agency to change a crushing inequity, while serving many needs, and without relying on government to fix what they are obviously ignoring. Even more than simply making it possible for some people to stay here, it makes it also possible for the social machinery to keep functioning for all of us. The service economy breaks down rather dramatically when there are not enough service people here to serve, and we’re already seeing the consequences; this is only going to get worse, if nothing is done to stop it. A practical philanthropy, which creates space for everyone, has benefits for the society as a whole—the people who can remain here and work, the people they serve, the businesses that need the pool of labor to operate, the people with enormous tax burdens, and everyone who values a more relaxed quality of life.  Let’s reframe this clearly: This is not just about concern for the working poor. It’s about too many chiefs and not enough Indians. Creating low-cost housing offers much in the way of enlightened self-interest, for those at the happier end of the income spectrum. It's a solution that's easily enacted, and one that would diffuse a great deal of the acrimony over income disparity.