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ELF Financing Strategy San Mateo County ELF Study‐2016 February 21, 2017 Prepared by Brion Economics Team Final Report 10 Average commercial land costs in 2015 ranged from a low of $61 per sqft to a high of $194 per sqft; the average cost was about $122 per sqft of land. Multi‐Family residential land sold for a low of $52 per sqft to a high of $236 per sqft; the average cost was about $136 per sqft of land. It is likely that land costs are higher now. Given that land costs vary significantly by location, conditions, and zoning, we are excluding land costs from this analysis. It is important to remember that land costs and land availability pose significant barriers to the development of child care centers in the County. Child care is competing with office, residential, and retail development in a real estate market that is very strong due to the strength of the high‐tech and social media industry. EMPLOYER‐BASED CHILD CARE Currently there are nine companies or employers that provide child care to their employees in some capacity. These companies/employers provide building space or financial support for a total of 1,680 child care spaces in the County, as shown in Table 4. Of these total spaces, 84% are available to employees and 16% to the community or students. More detail on employer‐based care is provided in Appendix B. These spaces represent about 36% of our current 2015 estimated non‐resident demand for child care spaces which total 4,269 spaces; however, it is likely that some of these spaces are filled by employees who live in San Mateo County. In general, the employers provide the facility for the child care operator, or construct a new center on land they already own or in building space they own or lease. In this situation, the child care operator or provider does not have the expense of providing the facilities and thus, can operate at a higher margin. Often the employer subsidizes the employees’ child care fees at some percentage or offers funding in the form of maintenance costs. Most of the employer‐sponsored child care centers in the County also offer spaces to the community to ensure that the centers are operating close to full capacity. The fact that the employer generally provides space for child care equates to a “subsidy” regardless of whether they subsidize monthly fees for the employees as well. Also, shown in Table 4 are the total estimated employees for each business or organization and the percent of employees that use child care compared to the estimate of total employees. Overall, 4.17% of employees are using an employer‐provided child care center. It is commonly held that employee demand for child care range from 3% to 5%, for comparison. Employer‐based child care is considered an employee benefit, and there are various options for employers who want to help their employees with child care. Not all employers provide actual physical space for child care, although some do, such as Genentech. Employer‐based support is typically comprised of these options: 1. Building on‐site or near‐site employer children’s centers for employees, resulting in an increase in the number of available child care spaces in the local community;  There are also options for operating the centers: they can be operated by the company itself, through a childcare management firm, or by a non‐profit child care provider; 2. Subsidizing operating costs and/or tuition at employer‐sponsored children’s centers; 8.C. - Page 29