When a Palo Alto restaurant owner couldn’t keep her staff from leaving, she bought a place for some of them to stay.
Zareen Khan, owner of two popular Pakistani-Indian restaurants, couldn’t keep her staff from leaving.
Soaring rents meant long commutes for her workers, and the strong Bay Area economy gave them many job choices. Khan raised wages, paid overtime and worked alongside the cooks. Little worked.
So last year she bought a home in East Menlo Park, California, a 15-minute drive from her Palo Alto restaurant. She moved four full-time employees into the house. They each pay $500 a month — a fraction of the mortgage and the $4,500 a month or more in rent Khan could fetch in the open market.
“They are my key employees,” said Khan, “but every employee right now is a key employee.”
The dilemma faced by Zareen’s — two small, bright and popular spots drawing tech titans as well as Pakistani and Indian natives craving authentic dishes — is as common in the Bay Area as its solution is unique.
“This is the first time I’ve heard of this,” said Sharokina Shams, spokeswoman for the California Restaurant Association. “I’m not sure ‘unique’ goes far enough to say it.”
The shortage of restaurant workers is acute throughout the state, Shams said. Rising rents in the Bay Area and Los Angeles, among the highest in the nation, have hit service workers hardest.
Chain restaurants can spread costs over more businesses and offer workers in high-cost areas more incentives such as health care, tuition assistance and other perks. Mom & Pop restaurants such as Zareen’s, with about 40 employees, have to innovate to keep the doors open.
The average food service worker in California earns about $12 an hour, according to federal labor statistics. Bay Area workers generally earn more, thanks to minimum wage laws in several cities. Servers and bartenders pull in more with tips.
But most workers can’t live on a single job without roommates and a side hustle.
The average worker needs to earn $9,500 a month, roughly $55 an hour, to afford the median rent of $2,850 in Santa Clara County, according to a study by the California Housing Partnership Corporation. That’s nearly four times the minimum wage to pay for housing and have enough left over for necessities like food, transportation and health care.
It’s worse in San Mateo County, where a typical lease nears $3,400, according to the CHPC survey. Even in the East Bay, once a haven for lower-cost housing, median rents have hit $2,500. A typical worker needs to earn about $49 an hour to make rent.
Khan, 49, didn’t plan on becoming a restaurateur, much less a landlord, in Silicon Valley.
She arrived in the United States from Karachi, Pakistan, as a graduate student, following her husband, Umair Khan, from their native country. After securing graduate degrees, the young couple moved to the Bay Area and found work in the tech industry.
Her husband started a software company, and Khan worked as a product manager for a tech firm while the couple raised their three children in Cupertino. Something had to give between her career and family — and she knew it was the job.
She flirted with the idea of teaching middle school science, but a side task — feeding her family — had seized her time and imagination. Khan taught cooking classes using her mother’s recipes. She made kebabs in bulk, their fame spreading through word of mouth. They froze well and made a perfect quick meal for working moms.
Soon, she was asked to cater at a friend’s tech company. Khan served lunch to about 150 engineers and staff. The requests grew, and her catering business evolved in 2014 into a Mountain View storefront called Zareen’s.
Khan said she took pains to reward and keep good employees. Family helped, too — her husband, an MIT-educated engineer, initially worked the cash register, and her children all pitched in.
“The first six months,” she said, “I felt like I made a big mistake.”
The popularity outpaced the small storefront in Mountain View. Khan opened a second location in 2016 in Palo Alto, about a mile from Stanford. Soon, long lines regularly snaked through the outdoor seating and onto the sidewalk, as customers waited for chicken boti sizzlers, gola kebabs and samosas.
The staff — always trying to keep up — could easily break under the strain. Khan lost an employee every two weeks, on average, she said.
“It’s not just busy,” said weekend manager Umair Siddique. “It’s very busy.”
Kahn rented a two-bedroom apartment in Santa Clara and subsidized rent for a few employees. But the landlord didn’t like the arrangement, she said.
That’s when she bought a three-bedroom, two-bath house in Menlo Park for about $950,000. Her plan: give two rooms to full-time employees to share, and rent out the master bedroom near market rate. “I’m not making money, I’m losing money,” Khan said. “But it’s OK. I’m keeping them.”
The tidy space has the look of a bachelor pad for well-behaved 20-somethings. On a recent visit, a small flat screen TV sat on the fireplace mantle. Shoes were lined up neatly in the dining room. The couch, coffee table and dining room set came from their boss. The kitchen was unusually clean because the men eat restaurant meals six days a week.
Siddique, 28, lives at the house on weekends, while he supervises the Mountain View restaurant as a second job. He spends the rest of the week in Manteca, where he has his own apartment and a marketing job with a food distributor.
He didn’t want to quit Zareen’s because he’s devoted to his boss, but a long commute never would have worked for him. Siddique and other employees compare her to a big sister. “She’s there,” Siddique said. “She checks on everything.”
Muhammad Naqui, 29, moved into the house about seven months ago when he was hired as a cook. “It was a very good deal,” said Naqui, a Pakistani native whose family remains overseas. It’s allowed him to save money — and he appreciates that his boss is looking out for him.
Having a bed near the restaurants takes some stress away from a fast-paced job, Siddique said. Customers come from as far away as Sacramento, and Pakistani and Indian families visiting from out-of-state will make special trips for a taste of home, he said.
On a recent weekday morning, Naqui reported to work around 10 a.m. to prepare for lunch. Mexican music blared as a mix of Latino, Pakistani, Indian and Caribbean workers grilled chicken, stirred broth and peeled onions. Aromas of curry and turmeric wafted through the kitchen and dining room, as employees swept and set up tables.
Khan arrived and quickly pulled on an apron, supervising and prepping alongside her cooks.
Carlos, a cook, has worked at Zareen’s for several months. The 40-year-old, who declined to give his last name, said he worked two jobs to support his family. He spends five hours at the Palo Alto restaurant, then drives to San Francisco for an 11-hour, overnight shift at a bakery, he said. He tallies 90 hours a week between the two jobs.
He dozes in his car, between jobs. After paying for his children’s health insurance and child support, he sees renting a room as a luxury he can’t afford. “I don’t want to pay rent for two or three hours” of sleep, he said.
Khan has urged him to nap at the Menlo Park home, and last week she sold her used car, with a heavy discount, to another employee.
The restaurant has thrived, earning notice from the prestigious Michelin guide and long dinner lines that sometimes include Mark Zuckerberg.
She could open more restaurants, she said, if she could find more staff.
“It’s been something great for me,” she said. “I do want people to come together over food.”