Zareen Khan, the owner of the eponymous Pakistani-Indian restaurants in Palo Alto and Mountain View, has added an unexpected job title to her resume: landlord.
Last year, she took the unusual step of purchasing a three-bedroom house in Menlo Park for just under $1 million and renting it to a small number of employees for $500 a month each. She had been battling high staff turnover for months, and employees were telling her that the primary culprit was the lack of affordable housing in the area. This, in turn, was impacting the quality of her restaurants, as she found herself in an unsustainable cycle of training new employees and working until 2 a.m. to pick up any slack.
"Sometimes I want to tweet about it and say, 'Hey, small businesses are gasping for air right now because there is such a crunch, especially in Silicon Valley,'" Khan said in an interview Monday, standing in the sunlit kitchen of the Menlo Park home. "If things go on like the way they are and there is such a lack of housing, the only things you will see when you decide to have dinner" are Chipotle, McDonald's and "big chain restaurants."
Khan, a native of Pakistan, opened her first restaurant in Mountain View in 2014 and the second, larger location on California Avenue in Palo Alto two years later. From the beginning in Palo Alto, the restaurant was closed on Mondays and only open until 9 p.m. — despite late-night demand from Stanford University students and others — due to a lack of reliable staff, Khan said.
She tried raising wages. She rented an apartment in Santa Clara for employees, but the landlord didn't like the setup. When she found the 1,100-square-foot home in Menlo Park's Belle Haven neighborhood, she decided it would be a worthy investment for both her and her staff.
Three Zareen's employees — two cooks and one part-time cashier — currently share two bedrooms at the clean, sparsely decorated house. Their rent includes maintenance, electrical, garbage, cable and high-speed internet. They're about 6 miles from the Palo Alto restaurant and just under 7 miles from the Mountain View location.
Khan rents the master bedroom and bathroom at about $1,500 per month to non-restaurant workers to help pay for the mortgage.
"It's a good deal," Khan said — a vast understatement given that the average rent for a three-bedroom home in Menlo Park is about $5,400 per month and about $7,000 in Palo Alto, according to real estate website Zillow.
The cashier, Muhammad Umair Siddique, was previously living in Hayward, paying about $1,000 in monthly rent. He worked at Zareen's on weekends and for a food distribution company in Manteca, near Modesto, during the week. He later moved to Manteca, where housing is cheaper but continued to work at Zareen's on weekends.
Her employees earn between $15 to $25 per hour based on the position.
Living at the house has changed Siddique's quality of life, financially and personally, he said.
Compared to other living situations with random roommates who come and go without any interaction, the Zareen's employees cook together, hang out on their day off, host barbecues in the backyard and provide a support system for other immigrants who are far from home and family. Siddique moved to the United States from Pakistan four years ago. One of his roommates, chef Shakeel Muhammad Naqvi, moved from his native Pakistan to Phoenix before arriving in California this spring.
"We don't feel like we are not at home," Siddique said. "When you only work, study, go home then you don't have any extra activity to go sit together, to say what you feel and to share all that stuff. Since I moved in, it's totally changed my life."
On Monday afternoon, Siddique and Naqvi waited while Kelly Ghuman made lunch, an egg curry — his mother's recipe, made with cumin, onions, ginger, garlic, spices and hard-boiled eggs.
Khan said none of her employees live in Palo Alto. She employs about 25 people across both restaurants and most commute from San Jose or Hayward. A handful live in East Palo Alto and even there "they are feeling the pressure," she said. (East Palo Alto recently made headlines for breaking the $1 million mark on median home prices.) One employee has no home and sleeps in his car in between shifts at Zareen's and a second job at Acme Bread. On weekends, he rents a motel in Los Banos in the Central Valley to visit his children.
"At some point it's important for them to have quality of life," Khan said.
As an independent restaurant owner in the Bay Area, labor is Khan's No. 1 pressure. The increasing cost of housing is contributing to a regional restaurant labor shortage that many owners worry will spell the end of mom-and-pop restaurants. She believes more affordable housing and an embracing rather than rejection of density in the area would go a long way.
In the meantime, she's trying to think outside the box — providing health insurance is on her to-do list as a consideration — for how to help her employees survive and by extension, her own business.