The chief executive of an affordable housing developer based in Merced drew salary and benefits worth more than $570,000 in one year — among the highest compensation of CEOs of similar nonprofits in the state and eclipsing even the chancellor of UC Merced, public records show.
As the longtime CEO of the Central Valley Coalition for Affordable Housing, Christina Alley runs a modest-sized nonprofit that helps build and manage housing developments around the state for low-income, disabled and senior residents. The organization employs about 22 people.
Alley earned $441,221 in income from the nonprofit organization, as well as $129,415 in additional compensation in the one-year accounting period ending in September 2019, state records show. The nonprofit reported $7.6 million in revenue and $4.6 million in total expenses that year.
Alan Jenkins, who has served as president of the nonprofit’s board of directors for 32 years, said that 2019 was a unique year for Alley’s salary. Adjustments were made to make up a mistake in her retirement and buyback some sick days, he said.
State records show that Alley’s total compensation was $486,745 in 2018, $535,505 in 2017 and $485,945 in 2016.
That comes to an average salary of $519,707 for Alley from 2016 to 2019.
In an interview, Alley said the challenging duties inherent to working within the complex affordable housing system — as well as long hours and time on the road during weekends and nights that accompany them — justify her salary. She also cited her long history with building the company.
Alley has been with the nonprofit since its inception about 34 years ago and acted as CEO for 25 of those years. Alley said her tenure with the nonprofit and the work she’s put into building it from the ground up have contributed to the size of her compensation.
Although the nonprofit is based in Merced, Alley noted it has been involved in many developments far beyond the county’s boundaries. “If we were just in Merced, our budget would definitely be smaller,” Alley said. “We stretch way far.”
In a follow-up email to the Sun-Star, Alley said that in her role as CEO she oversees staff who develop and manage properties, conducts oversight for compliance and provides a range of social services for residents.
“In my time with the organization, we have steadily increased revenues and reinvested these resources into our properties,” she said.
Alley’s compensation alone represents more than 12% of the organization’s expenses in 2019, which experts in charity compensation said was “atypical.” Her pay and benefits package is roughly 10 times higher than the average household income in Merced County.
“That’s a lot of money,” said Doug White, a longtime nonprofit consultant and charity ethics expert. “That is stunning.”
Although Alley’s salary on its own doesn’t mean the nonprofit is spending its money badly, White said it does ring alarm bells.
Alley’s high salary is significant given the enormous costs of building affordable housing in California, which is most often funded through state and federal tax credits.
Affordable housing complexity a factor in CEO salaries
The Central Valley Coalition for Affordable Housing is part of a multi-layered food chain of organizations that benefit from these credits — an estimated $9.5 billion-a-year system that pays developers for building housing for low-income and vulnerable populations.
During a second interview with the Sun-Star, Alley declined to comment on the role state and federal tax credits play in financing the Central Valley Coalition for Affordable Housing’s projects.
In many cases, the developers who received these subsidies sell them to investors who bring financing to the project. The system is considered an effective way to attract private developers and financing to low-income neighborhoods and increase the nation’s affordable housing stock.
The system makes for a complexity of funding streams, said Philip Mangano, the U.S. homelessness czar under presidents George W. Bush and Barack Obama. Mangano now serves on Gov. Gavin Newsom’s task force to address homelessness.
“When you’re a private-sector investor going out to build affordable housing, you have to apply to the tax credits, you’re going to borrow from the bank, and maybe you’re looking at other funding sources, too,” Mangano said.
“As a result of that, the deals get complicated. And when something gets complicated, it gets more expensive, of course.”
Critics of the system say these layers of organizers, investors and managers push up the per-unit cost of development because everyone along the way is compensated for their work, according to the Tax Policy Center. As a result, they said, a significant portion of the tax subsidy does not go to the creation of new rental housing.
The California Tax Credit Allocation Committee shows multiple applications from the Central Valley nonprofit for credits to build affordable housing.
Applying for and providing tax credits to partners is essential in bringing the Central Valley Coalition for Affordable Housing’s projects to fruition, Jenkins said. “Without those tax credits, affordable housing probably would not work,” he said.
In 2020, the nonprofit sought more than $2.2 million in state and federal tax credits for purchasing and rehabbing the 44-unit Harvest Garden apartment complex in Livingston in Merced County. The application lists about a dozen other partners, including law firms, architects, banks and property managers.
“I remain focused on helping our organization navigate all of the complex legal, financial, and local government issues involved in developing affordable housing in California,” Alley said in an email.
Affordable housing development leaders are often reasonably well compensated due to the complexities of navigating the affordable housing system, said David Garcia, policy director for UC Berkeley’s Terner Center for Housing Innovation.
And without these private developers, virtually no affordable housing projects would be built. The private market is responsible for about 90% of all housing development each year and the affordable housing industry accounts for just a fraction of overall housing production, he said.
Still, total compensation of over $570,000 appears at the high end of the scale, Garcia said.
Scope of nonprofit’s work
Among projects outside of Merced County, Alley’s nonprofit is working to develop a 163-unit property in Santa Clara for seniors that will include apartments for the mobility impaired, people with hearing and visual impairments, and the formerly homeless, according to Multi-Housing News.
The community, called Agrihood, will also include “farming plots,” a small orchard, a community building with a café, and a plaza where a farmers’ market will be hosted.
The Central Valley Coalition for Affordable Housing has done projects in Washington and Arizona, as well, Alley said.
Most of the affordable housing units the company has helped develop — about 19,000, Alley said — are in California and are run by third-party managers.
At many of these developments, the nonprofit facilitates free life-skill development classes for residents like resume writing, interview coaching, how to budget and how to clean up a credit report. Some sites offer after-school programs.
The business employs about 22 staff plus contracted workers and has a satellite office in Los Angeles, she said. Last year, the nonprofit received a federal PPP loan between $150,000 and $350,000 and “has potentially retained 23 jobs,” according to the Small Business Administration.
The website for the Central Valley Coalition for Affordable Housing says it’s “under construction,” and does not list its board of directors or anything other than its address and phone number. The charity’s most recent registration with the state Attorney General lists four directors, two vice presidents and a president for the board.
In an interview, Alley said her compensation is reviewed and it is comparable to people who do other similar business.
Her salary and benefits review, according to records kept by the Attorney General, is conducted annually by an independent compensation committee that receives input from a consultant and the Economic Research Institute, a compensation analytics company that compares tax form 990s between organizations. Compensation is ultimately approved by the board of directors.
The seven-seat board has held the same membership for many years. Some members have sat on the board for 30 years or more, Jenkins said.
Members are suggested by either Alley or others at the Coalition. The board typically meets monthly, he said.
The roughly 280 projects Alley oversees and the 60 to 80 hours worked on a regular week are key factors in deciding her salary, Jenkins said. The board is less concerned with what other CEOs in similar positions are making and believes that Alley’s roles merit every bit she makes, he said.
“It may look really high for Merced County, but she’s excellent at what she does,” Jenkins said of Alley’s salary. “This is a really unique job.”
What are other CEOs making?
Records show Alley’s compensation does stand out among CEOs of similar size nonprofits throughout the country.
Alley’s pay is higher than both the average and maximum compensation found among 112 nonprofits with similar operating budgets as the Central Valley Coalition for Affordable Housing, according to a national nonprofit salary and benefits report done by Bluewater Nonprofit Solutions. All study data were gathered in 2020.
Alley’s $570,000 total pay outweighed the maximum CEO salary surveyed within the operating budget group by over $140,000. The average salary for these CEOs was $158,000.
Even among nonprofits with the highest operating budgets in excess of $50 million, the average CEO salary was lower than Alley’s paycheck. Chief executives in this top bracket made an average of $418,000 and a maximum of $775,000.
National-level salary comparisons, while useful, must take into account the inflated cost of living in California. The state’s median home price set a record in September at $712,430, the New York Times reported.
Locally, other Merced County-based nonprofits also pay their top employees far less than Alley, records show.
Merced County Community Action Agency — the local branch of a national nonprofit that provides direct assistance to the poor — compensated its executive director $147,100 during the 2018-19 accounting period, according to records kept by the California Attorney General’s Office. The organization reported $10.8 million in revenue and $10.7 in expenses.
Another local nonprofit, the Central Valley Opportunity Center, paid its executive director $136,900 in total compensation during the same accounting period. It reported $8.4 million in revenue and $8.5 million in expenses. At the Merced County Food Bank, the executive director made $86,900.
As for public employees, the UC Board of Regents approved UC Merced Chancellor Juan Muñoz’s salary at $425,000 when he took on the job last year. The UC Merced Foundation’s former CEO and President Dorothy Leland made more at $527,000 between the 2018-19 accounting period, when she also served as the university’s chancellor until August 2019.
Many California-based affordable housing development and management nonprofits compensated their CEO at a much lower rate than Alley, as well.
Mutual Housing California in Sacramento, for example, paid its CEO $216,000. The group reported $9.8 million in revenue and $4 million in expenses. Hayward-based Eden Housing Inc. paid its president $416,000 and reported $47 million in revenue and $24.4 million in expenses. And Western Community Housing Inc. in Costa Mesa compensated its president $476,000 while reporting $9 million in revenue and $4.8 million in expenses.
Some affordable housing nonprofits do compensate their CEOs far higher, however.
The Bridge Housing Corporation located in San Francisco, which also develops and manages affordable housing, reported its president and CEO made $727,000 during the 2019 accounting period. However, the business reported $48 million in revenue — about six times higher than the Central Valley Coalition for Affordable Housing received. Expenses were reported at $34.7 million, which is at least seven times more than Alley’s nonprofit.
The compensation for the Bridge Housing Corporation’s CEO equals about 2% of the group’s yearly expenses, compared to the more than 12% of expenses for Alley at her considerably smaller nonprofit.
Foster City-based MidPen Housing paid its president and CEO $597,000 while reporting $46 million in revenue and $20.4 million in expenses. Affordable Housing Inc. in Newport Beach compensated its CEO at $663,000 while reporting $12.9 million in revenue and $9.1 million in expenses.
Generally, CEOs can reasonably expect higher compensation that is commensurate with their experience and expertise, said Andrew Johnston, a UC Merced economics professor. Nonprofits would not be able to attract skilled professionals without competitive salaries, he said.
Charities’ complex nature mandates a nuanced approach to comparing them, White said. Basic formulas to rate charities that are based only on public financial records can overlook valid reasons for why a nonprofit is operating the way it is, he said.
A better benchmark, White said, is an organization’s measurable impact and how well it succeeds in completing its stated mission. If the charity is effective, he said he believes it almost doesn’t matter how much is spent.
Still, White said that in his 40-plus years working with charities of all kinds, Alley’s salary does stand out as atypical regardless of any caveats.
“They don’t look like they’re doing a bad job, but there are some questions like why (Alley) is making so much compared to what is being brought in,” White said. “There is still that relationship to the overall budget.”
California presents extra affordable housing challenges
Affordable housing projects are especially expensive to build in California, experts said, because of the brier patch of funding sources and government approvals needed to bring projects to fruition.
It costs more to build government-subsidized apartment complexes for low-income residents in California than any other state, a 2020 analysis by the Los Angeles Times found.
Two-bedroom affordable housing units in San Francisco have reached a cost of $750,000 to build. Dollars spent per apartment unit climbed as high as $1.1 million at a Solana Beach affordable housing project in San Diego County.
California’s affordable housing expenses are nothing new, but costs in recent years have become increasingly exorbitant, Garcia said. The price of building a 100-unit affordable project in California increased from $265,000 per unit in 2000 to nearly $425,000 in 2016, the Terner Center found.
Higher costs to build mean more government subsidy is required to make units affordable. More subsidy required means fewer people served. Ultimately, higher cost means less units built. Meanwhile, the need for affordable housing in California rises.
“The challenge we have is that we’re in a deficit of about 100,000 units per year,” Garcia said. “The affordable housing industry itself on a good year produces about 20,000 units per year.”
Compared to other states where Central Valley Coalition for Affordable Housing does business, fixed low-income rents don’t offset the cost to build in California. Land and construction are cheaper in places like Washington and Arizona, Alley said. An average deal involves no less than three to four sources of funding, and takes three to five years to get a project finalized.
“Like other major development companies operating in California, we are certainly mindful of the cost of building and managing property in this state — from compliance with CEQA (California Environmental Quality Act) and the high cost of land and labor to ongoing regulatory requirements and lengthy local entitlement processes,” Alley said in an email to the Sun-Star.
In the City of Merced, where Central Valley Coalition for Affordable Housing is based, no new affordable housing projects have been completed since 2014.
“They call it a lasagna of funding sources, it’s just layer on layer on layer,” said Merced Mayor Matt Serratto. “(Projects) don’t pencil out for developers unless there are major subsidies. You’re asking people to build it and sell below market rate . . . it’s a time-consuming, expensive process.”
Central Valley Coalition for Affordable Housing has done business with the City of Merced going back to 1995, according to Director of Development Scott McBride.
Merced projects the nonprofit helped to develop include Sierra Meadows, The Grove and Gateway Terrace apartments. The organization is currently partnering to develop the affordable housing project at Childs Avenue and B Street, dubbed the Childs Court Apartments.
“We can’t do all the work, we have to have partners,” McBride said. “They’ve been a good partner in providing affordable housing in the community.”
The Childs Court Apartments were stuck in a pipeline of planning, funding and public review processes for years before finally arriving at the development stage.
Compared to the other states where Alley’s nonprofit does business, she said it is more difficult to build in California.
“Twelve hour days are not what a lot of people want to do,” Alley said of her job. “They don’t come easy.”