Assembly Housing And Community Development Committee

Thank you and good morning to everyone. I want to sincerely thank Chair Haney for holding this hearing on AB457, as well as farm worker and rural housing issues generally. As you guys know, I represent a very rural district, Assembly District 27, which encompasses Fresno, Madera and Merced counties. Also for me, this issue of rural housing and farm worker housing very personal as I am the daughter of farmworker immigrants and so I know the plight that many of our farm worker families have to go through. As I've been here now in the legislature for the last this is my fourth year, I've learned about the work that we've done on housing and around housing, and it's been incredible. And I think that we've made enormous strides to try to address the affordability crisis that is impacting constituents across California. But I also recognize that a lot of the policies that do come out of this building are very urban focused. And I think that it is important today to have this discussion. And so when I approach Assemblymember Haney, he said, yes, let's do it. I think that that's a worthy issue to discuss. And so I'm so grateful to that the staff has spent the time and that there are folks here this morning to also really talk about the nitty gritty of what is happening in our local communities, what are some of the wins that we've seen and also the opportunities that exist out there where us as policymakers, we can make better policy to also not leave regions like my region left behind, which we have been historically. And so I'm so grateful for that, for the opportunity today. Obviously, the issue of farm worker housing, similar to, I believe, Speaker Rivas, we're passionate about it because we came from it. And that's why I authored AB457 last year, because I've heard about the challenges of building farm worker housing in many of our small rural communities and wanting to make sure that we would not reinvent the wheel, but look out previous policy to try to build upon it. And so I'm grateful that the governor did sign this piece of legislation and that today we have that initiative that Speaker Rivas created of these outcomes review process that can allow us to look back and then also kind of look forward to examine the effects of not just AB457, but other bills that have impacted or are impacting the ability to build not just farm worker housing, but rural housing in our community. And so I'm looking forward to robust conversation. I want people to be honest and tell us what are those challenges that communities like Mendota, who I know is here represented in the west side of Fresno county, what are they experiencing? Because every time I go and meet with constituents in my district, they want housing. They want affordable housing, yes, rental housing, but they also want rural housing that they can own in their own community so that they're not having to travel long distances for work. And so again, I look forward to the conversation today. And thank you so much, Chair Haney, for this opportunity.

Thank you. Thank you to Chair Haney and Assemblymember Soria for introducing your AB457. And certainly I came to this space, my Santa Clara county folks came to me with this need for farm worker housing. I represent Santa Cruz in Santa Clara County. It's known as the salad bowl of the world because of how much we provide in agriculture. The reality is that California's $54 billion agricultural industry and farm workers are the backbone of our economy. And however, due to the severe shortage of affordable housing and very low wages, farm workers experience extreme housing insecurity. A state that's the fourth largest economy in the world that is tasked with feeding the world. This is just unconscionable that we're in this situation. Oftentimes, farmworkers and their families are forced to live in temporary shelters, motels, garages, vehicles. So I am so grateful for the work of Assembly Speaker Reivas and his original Bill 1783, which we built upon that in AB3035, making it for Santa Cruz and Santa Clara counties. And I'm grateful to Soria for your work in bringing this to the Central Valley. And you are certainly know very well firsthand how important this is to build the Good morning. The affordable housing we need for our farm workers doing this incredible work. So thank you for having me here.

Chair. Just very briefly, Matt Huerta, affordable housing consultant based in Salinas. I do statewide advocacy, organizing, support and leadership coaching and training.

Bonita Villalobos Rivera, third Vice President of United Farm Workers. And I'm also the regional director in the Central Coast, Monterey County, Santa Clara County, Santa Cruz County, San Benito County.

Sure.

So.

Good morning, Chair and Assembly members. Again, thank you for the opportunity to speak with you today. I'm the grandson of a bracero who worked row crops and orchards in the Sacramento Valley and across California. Originally from the Central Valley ag communities of Viselia, Fresno and Clovis, I was the first in my immediate family to attend a four year university at UC Davis. For over 25 years, I've helped to create and preserve thousands of affordable homes not only for farm workers, but many others who make our economy thrive. As a full time consultant based in Salinas, I currently serve in multiple leadership roles including a senior advisor for the Monterey Bay Economic Partnership, a leadership coach for Ayurondo Latinos AZ who are building rental homes for senior farm workers in Half Moon Bay and providing technical support to Housing California as they lead the effort to secure billions in new investment for affordable housing. I also serve on the boards of the NPH Action Fund and the California Coalition for Rural Housing. The need for farm worker housing is evidenced by severe overcrowding and the escalating rents even in our traditionally more affordable rural communities. Recent research on farmworker housing conditions finds about one third of farmworker households live in overcrowded housing far above the general population. The issue is not going to go away. California growers rely on approximately 400 to 800,000 farmworkers to churn out more than 400 commodities, including the lion's share of the country's fruits, vegetables and nuts. Today, it has never been more challenging to create farm worker housing sites suitable for farm worker housing. Serving families and individuals have been identified in our housing elements, but many require tough upzoning battles and remain extremely challenging to develop. Rural sites have more infrastructure challenges such as inadequate sanitation or water systems. More off site improvements such as sidewalk and street repairs are often required by local governments as part of addressing larger scale neighborhood improvements. Rural housing development is a major driver for improving infrastructure, but that also increased costs and time delays. Land costs represent another challenge in rural areas. It can be very expensive due to extensive soil remediation from pesticides needing to purchase adjacent land in order to meet ag buffer requirements or if located in coastal areas, there could be competition from others seeking these properties for tourism or luxury housing. Some local governments have partnered with nonprofit developers to sell or lease publicly owned land, but this can also open up an avenue for local opposition. In Half Moon Bay, we are seeing local NIMBYs threaten to send the approval of of a ground lease for a 40 unit senior farmworker housing development to the voters this fall in an attempt to stop the development. This is even after partners Mercy Housing California and Alas secured over $20 million in state funding, including a Joe Cerna Farmworker housing Grant and obtained entitlement approvals. So while we have many tools including housing the Accountability act, there remains strong resistance to progress. As for privately financed AG employer sponsored housing, the Monterey Bay region has been incredibly successful over the past 10 years producing over 4,100 beds for seasonal farmworkers. These are H2A visa holders. Seven projects have overcome significant local NIMBY opposition by being backed by strong development teams, integrating several on site amenities, thoughtful site and unit design, and ongoing collaboration between government officials, housing advocates and ag employers. Citing new employer sponsored developments remains a challenge, but a model process and a high project quality threshold has been established. I appreciate Assemblymember Soria, Assemblymember Pellerin and Speaker Rivas for their leadership in addressing the housing needs of our workforce who help nourish and provide for food security. AB 457 and its predecessors are a stated commitment to opening up more pathways for farm worker housing production. However, I believe you will hear testimony today from several of us working in this space that it does not currently incentivize a whole lot more production. While more and larger sites are put into play conceptually, the reality is that most of the development opportunities are infill or immediately adjacent to urban centers. Also, flexibility is critical to deal with the realities of rural sites. We can activate more sites near fire hazard zones where the buildings can be designed to be resilient and buffers established. Allow large AG zone parcels to be subdivided or rezoned to create sites appropriate for farmwork or housing developments. Municipal sewer connection should be required where feasible and allow for on site treatment where municipal connection is not feasible. Other counties, including coastal areas with large ag operations should be added. These are just some ways this legislation could be improved. The biggest barrier to creating more farm worker housing is the lack of adequate investment in both capital and rental assistance subsidies. Farmworker housing projects are included in the statewide backlog of 40,000 shovel ready affordable units that was recently reported by Calmatters. We have a strong network of developers who can be more aggressive and in creating more sites if we had more certainty that the subsidy was there to ensure strong financing plans. The LIHTC program, Joe Cerna Farmworker housing grant and CalHome program are the leading resources creating nearly all of the farmworker housing serving families. Many of these programs have been identified in the Affordable Housing Bond act of 2026, AB736Wix and SB417Cabaldon, thank you for your leadership. I'm here to help answer questions.

will start by saying my presentation is yes and to everything that was just said there I found myself nodding to 90% of that. I will start by reiterating that we look at housing in Napa as a critical workforce Issue, the local economy, the wine industry, grape growing, farming is $9.4 billion in local. It's $34 billion in economic investment across the state. So it's something that we talk about being important to everybody, not just to Napa, because the waitstaff at the restaurant in New Jersey who are selling Napa wine are benefiting from what we do or don't do for farm workers in Napa. So we really want to always ground this. And this is not just a social issue. It's an economic issue. Housing access and affordability are the two things that we find our farm workers face most often. So there is a unit problem. I mean, the math just doesn't math. But there is also an access problem that even when there are units available, they're not made available to farmworkers in the way that we would like to see them. And so we. One of the things that we did last year. I'm sorry, I have a PowerPoint. It is not necessary to look at these PowerPoint slides. I just want to say this is sort of a summary of what I'm going to say. So this will be available afterwards. We did a farmworker housing needs assessment in Napa two years ago to really take a deep dive into what are the needs and what could we do better. And. And when I say we did it, I mean literally my core team. We did not staff this out. We did not hire a consultant. We directly surveyed 650 farmworkers working in Napa. We worked with their shift supervisors to get on site. We had language, access, translation for all of the surveys. We did them ourselves. We did the analysis with our epidemiologist team at Public Health. We did key interviews with employers, with shift supervisors, with farm workers so that we could really understand the need. And at the end of the day, the major barriers that they face are, first and foremost, the math. Doesn't math. There just simply aren't enough units available. The second is access that because of the overcrowding, that comes along with how they are naturally solving their housing solution. They are in informal lease situations. So even when they're able to secure housing in the valley or nearby, in surrounding counties, they're not on the lease. So when they then go to try to get the next place the next season, they have no rental history, they have no credit history. They can't demonstrate that they've been paying rent consistently. That just becomes an ongoing cyclical barrier. The other is language. Access leases are not available in multiple languages, nor is there anybody to help. Even when There is set aside units at affordable housing sites. There is rarely somebody speaking the unique dialect that most of the farmworkers who are here speaking. Part of our survey included asking, what is your primary language? What is your Overall language access? 20 different dialects from south America in Napa. Those are different dialects than the ones spoken in sonoma. And that has to do with how workforce is brought over in the way that families kind of connect back to family and bring additional workforce over. So to solve a language access issue in napa is not to solve it in Sonoma. And I reinforce this to say, like, solutions need to be that level of local. We need to know what our language access is. And that's one of the primary data points from our needs assessment that we share very broadly is making sure everybody understands that this is a language solution unique here. The other is transportation. We've got folks who have family in the central valley who work in napa, and they commute one or two hours each way to get to the higher wage job here. They want to keep their families in the central valley. That's the more effective, more affordable solution. But they are then dependent on these amazingly sophisticated and also hyper unstable transportation networks that there are vans that are going from the central valley into napa with a whole crew. They've. There's a very sophisticated way of networking all of that. But they're spending two and three hours in a car. One guy's driving the car, the other eight are crammed in there. There's no wi fi access, there's no food available in that car. They are just simply in a transportation mode. And if the van goes down or if the driver is sick, that entire crew can't make it to work. And we don't have good transportation solutions. So I know this is about housing. I'm just putting a pin in. Our study says that there's a ton more we could be doing on creative transportation solutions. And we would love to be able to lift up some of the results that we saw there. But the summary of all that is to say that the lack of housing becomes a health issue. In forms of sleep deprivation, There is nutritional access. It's just almost impossible to get a hot meal if you're doing that kind of commute. And then the last is like what that's doing to the family constellations of those households. If you have a two hour commute each way and you are working an eight to ten hour farm shift, you are functionally not seeing your family for five days a week. You are not co Parenting for five days a week, that's not healthy from the family structure. So all of these things are things that we're looking to solve with better access to housing all the way around. So what we do in Napa, there's a number of things. One of the things that I really want to highlight is our farmworker centers. The county owns and operates three 60 bed farmworker centers. So 180 units of nightly lodging. We serve about 400 farmworkers a year through those centers. The really unique thing about those. So those centers, the lodgers pay $18 a night for the housing that gets them the overnight lodging in dormitory style. So two guys to a room that also includes a hot breakfast and a hot dinner and a to go lunch. So $18 gets you your lodging and three meals. I will say most of the meals that are produced there. There's an amazing growing garden on site. So a huge number of the vegetables are actually grown right there by the lodgers and the chefs themselves. The Centers run at 96% occupancy throughout the year, 11 months out of the year. The most unique part of the centers is the funding model. So the lodgers pay $18 a night. That generates about 50% of the operational capital. The growers in Napa, everyone who owns one acre or more of vineyard land in Napa county pays into an assessment, County Service Area 4. CSA 4 is a per acre assessment that the growers asked to tax themselves. They came to the state in 2002 and asked to be able to assess this tax. At that time, the cap was $10 an acre. The assessment started at around $6 an acre. Since 2002, we've come back to the state once and raised the cap to 15. We're actually coming back now and seeking to raise it to 20. Right now that assessment sits at $14 an acre, and it generates $650,000 a year towards direct operating capital for the centers. That doesn't pay for county staff. That directly goes to the cost of operating the centers. So lodger rents are the number one source. CSA 4 is the number two source. The state contributes $250,000 a year, and that is part of the CSA 4 assessment raise. Was that when the state agreed in 2018 to offset some of our operating costs, the growers agreed to raise their annual CSA4 assessment from $10 to $15. So we're looking to repeat that again. Now. In addition to the state lodger rents and the CSA 4 assessment, the county of Napa provides all of the staff Support behind the scenes. So contracts. As you can imagine, a center like that has a lot of. We've got an operator, there's a whole lot of facility contracts. So I have somebody on our team who runs those centers as a full time job and the county covers all of that cost directly. The centers, because of our long term operating agreements with both the CSA 4, with the assessments and the state's 10 year commitment to the $250,000 a year, we've been able to be innovative in the last decade about what these centers are. Ten years ago they were just simply nightly housing. Now they are truly navigation centers. We bring in an FQHC that provides health services. We bring in the farmworker foundation that provides ESL classes on site. We have Bay Area legal comes to provide immigration services and we have newly housing navigators who come on site to help the lodgers understand things like their informal agreements. How do you get letters of recommendation from folks that you might be participating in. Informal rental agreement, getting a landlord to write those letters, all of those things helping them understand how to build up not only their rental history but also their personal credit so that when units become available, they've got a pathway there. And then as we've increasingly begun to have set aside units through the CERNA program and, and other county funding so we don't fund anything with our affordable housing fund that doesn't have set asides for farm workers now. So we're growing the number of units that are dedicated for farmworkers. And so the site, we're using the farmworker centers as a primary touch point to get lodgers who have been using the centers for 10 years returning, moving them into the permanent units that are now coming online. So that is to say over the last eight years the centers have transitioned to what we would consider more like a navigation center as opposed to just a farm worker housing site. What that does is gives us the time to get those lodgers a leg up in the process that as I described, like when language access is an issue and when frankly trust is an issue, you need more time to work with those folks to help them comfortably access what they see as government sponsored housing. So all of the affordable housing sites have state funding in them. Some, many have federal funding in them. That can be extremely intimidating. We're trying to build pathways to help those folks be able to take advantage of housing that is meant for them. But they can't be competing at the same pace that say a Section 8 unit or just a regular unit is. Those units get snapped up. Our vacancy rate is 3%. You're just simply not going to get that if you can't fill out the application day of. So the set aside units give us the time that we need in order to be able to help those folks move. And I will say that the stable funding has been the key to the innovation that has helped us move those from just simply dorms to navigation centers. That's how we've been able to make long term contracts happen. So when we look at what the state. Sorry, I got ahead of myself. What are some of the recommendations that we would have for the state? First and foremost, what we want to say is that the the state should be investing in these kinds of long term operationally stabilized programs. That means that allows operators like ours to establish multi year contracts. When we have to negotiate year over year, it's really hard to stabilize costs. The major cost drivers for us right now are food, utilities and insurance. We can't contract those. So we have to be able to get everything else into well known stabilized contracts like water treatment services. That is the third, third highest contract that we have at the centers because these are in rural locations. So stabilizing costs through long term funding commitments allows us to make long term partnerships happen. The other is to make state funding available with the kind of escalator that allows it to keep pace with the increase in costs. I mentioned the contract with the state that contributes $250,000 a year. That went into effect in 2019. So we negotiated in 2018. $250,000 in 2018 is very different than $250,000 in 2026. Costs in 2018 were $1.4 million to run the centers. This year they're 2.3. So we've had to make up those costs with increasing larger rents and increasing the CSA4 assessment. Meanwhile, the state's contribution has remained flat. Don't get me wrong, we're massively grateful for the state's contribution. But it used to be 18% of our operating costs and now it's 11. If we had just simply been able to build in an escalator at the time that it could have kept pace with inflation, we wouldn't need to be coming back now asking for a bigger contribution. It just simply would have kept pace with the other ones. So that would be my first and foremost. The second is to consider incentivizing the kind of ag partnership, the kind of public private partnership that Napa has. Our CSA4 model. We're the only county in California that has that kind of per acre assessment. We're pretty sure we're the only county in the entire United States that has it. We don't think that should be the case. We think this should be a model and we think it's really achievable to give you some context of how resoundingly supported this is, every five years, CSA 4 goes back up to the growers for a vote. Everyone who has one planted acre gets one vote per planted acre. So there are roughly 48,000 planted acres in Napa County. 48,000 votes to up or down on CSA 4. The last time we took this to the voters was in 2022. 48,000 votes went out. 92% of them came back positive. So 92% of the acres in Napa said, yes, please tax us to the tune of $14 an acre to provide for the farmworker housing. So this is something that everybody has a chance to have a lot of pride in and that everybody's got skin in the game and, and they're publicly operated. So I sit in front of a housing commission every month. I answer to any problems that are happening at the centers. We would love to give tours to absolutely anybody who would like to come through the centers. They're beautifully run, they're well maintained. The meals, the food is excellent. We always make sure we host lunch so that everybody can see. And what you will eat is exactly what the farm workers eat. The food is fantastic. So we think this could be a model. And one of the ways that we think there are multiple ways that it could be a model. One would be to simply make funding available, Incentive funding that is available to any community that has dedicated farmworker funding raised locally. So causing it to be that broadly just simply would mean anybody who has a CSA4 like assessment has access to a dedicated pool of funding. We're the only ones right now. I'm pretty sure with within a year of making that funding available, there'd be multiple communities. The other is to consider a point scoring bonus in the NOFA for CERNA funding that any community that makes locally dedicated funding available for farm worker housing could get some sort of point bonus. I say this because we've had one project that was successful for CERNA six years ago. It just opened. It's called the Heritage house. It's an 88 unit project. We've got 29 units of set aside farmworker housing there. Since then, we've been not competitive for any of the CERNA funding. The scoring. We're not urban Enough to be urban, we're not rural enough to be rural. Our transportation structure just doesn't quite meet the scoring criteria. So all of our projects sit at 94 points. We have. Farmworkers are the core. We've got this amazing public private partnership and NAPA wanting to make housing available. And we're not competitive for getting these big CERNA funding projects. If we could get a three point scoring bonus for having a dedicated local funding source for farm worker housing, all of our projects would become competitive. So those would be my two primary recommendations for there. The other would be to consider tying capital investments to.

Oh sure, yeah. Last two. Tying capital investments to long term operational efficiency. So incentivize capital investments in green infrastructure. So helping us get ahead of the utilities. We can't afford solar right now. It's a huge investment. But long term that would help us stabilize operations if we could get a green energy in there. And then the last is just supporting housing, navigation and access for farm workers through things like the dedicated language, access and time for time to spend at the centers with the lodgers. And I'll stop there.

Okay.

So.

Thank you. Thank you to all three of you for your analysis, your experience and leadership in this. It was really helpful for us to sort of set the overall framework as we continue the conversation here. I'll open it up to my colleagues if there are any questions or comments. Some of them are. Sorry.

They are open on a first come, first serve when they reopen. So as I said, the centers operate 11 months out of the year and we rotate during the closure. So we always have at least one center open and that closure happens over the shoulder season. November, December, January. When they open in January, it is a first come first serve. After that we keep a wait list on there. There is no long term lease agreement. It's nightly housing. They just have to be able to demonstrate that they are a farm worker. And I will underscore that they just have to be a farm worker in the state of California. They do not have to work in the Napa Valley because we take state funding. They might be working in Lake county, they might be working in Sonoma County. I will also highlight that they are not H2A visa holders and that is simply because the H2A program requires that the employer guarantee the housing before they come over on the visa. And we do not allow employers to earmark any of the housing. So even though every one of the growers participates in the operating costs, they don't get any preference on who's in there. So we work directly with the lodgers. We're really careful about how much information we keep on file there. We don't take any federal funding. There's no immigration status requirement. There's nothing like that. They just simply have to be able to to the managers to a threshold of demonstrating that they work in farm labor in the state of California. And then they're just nightly. So some come Monday through Thursday. Some then don't want to pay Friday, Saturday, Sunday they'll take their chances that there's a bed on Monday. Some will pay for the full week and do go home or go work somewhere else on the weekends, which is also often true. And a lot I would say like one third of the lodgers who are there have been returning year over year for more than 10 years. So this is totally. This is absolutely part of their housing plan. And I forgot. Did you ask. Am I answering all of your questions? Okay, good.

Yeah. And I think you'll be able to get probably some more detail from I think Tom Collishall's here from Self Help Enterprises to give you a lot more specific information about at the project level. But just generally speaking, you know, affordable housing development is usually financed with you know, a third from local or you know, local funds, a third from state funds and then another third from federal funds, usually through the low income housing tax credit program. And so it's super inefficient. Right. The way we've kind of boxed our end to having all these layers and layers and that's just. That's that would be easy project. We usually have 5 to 10 or more funding sources. But it's Got to start somewhere. So I think where it's great that NAPA stepped forward in terms of leveraging some of the private sector. Right. And saying, hey you, where's your skin in the game? Obviously those funds are, are going to serve for the service component, but that's part of the, that's an important component that usually there's no funding source for. So I think overall, I think any more resources, whether it's local, state or even federal right into the pot is a win because again, the costs are unfortunately still very high and very comparable even to the urban centers.

Yeah.

Yeah,

Thank you. I had also a few questions about the NAPA program and in particular the. The decision by the growers to come together and assess themselves and then sort of how they think about the ongoing responsibility with that. I know they've come back and you know, together with the county and asked for expanding the assessment. But is there, when you did the study, in terms of assessing what the overall need is and is how does the conversation look in terms of the assessment to meet the need? I mean, that's just. It's a very impressive and unique program. At the same time, I'm sure that there's. It sounds like 96% occupancy, there's potential expansion and sort of how you think about that, it seems like most of the funds are for more for operations than for you know, acquiring new facilities or how do you fund the, the facility side of it in the sense is you're looking at expansion, is there sort of, is it covered more by your bonding capacity and that kind of thing? And then two other kind of related questions. The governance of it is it's just completely run by the county. So the folks who, some of the folks who are contributing, did they have any other role in that and is that sort of possible challenge or is it just entirely accepted that this is county run and their role is only to provide the funding? And then lastly, how do you look at, I imagine these are all adults, there are no families there. How as you were assessing the needs of the overall sort of set of workers and what their goals and desires were, how do you look at the needs of families there? And how does this, I mean, certainly a model I would support to expand for. There's clearly a need for it. But at the same time, if most of these folks would love to be with their families and we're just building a set of housing where they have to separate from their families, that's not necessarily something that we want to accelerate at the expense of family housing.

Yeah, no, thank. Thank you. It was a whole set of questions. But I don't know if either of you have any perspective on any of those, those pieces from your. Well, well, thank, thank, thank you again for, for your insight here. It's really helpful for us and appreciate your partnership on moving this forward. Thank you.

All right, we will now bring up the second panel. This is a panel that are going to speak more to the specifics of AB 457. And I will invite up Consuelo Hernandez, Deputy County Executive of the county of Santa Clara, and Tom Kalashow, the president and CEO of Self Help Enterprises. Welcome.

And I'm Tom Collishaw. I'm the president and CEO of Self Help Enterprises, a nonprofit housing and community development organization that works in all eight San Joaquin Valley counties from Stockton to Bakersfield and also Mariposa County.

Sure.

Thank you. Appreciate it.

Thank you both. That was incredibly helpful to give us really a direct picture of what this looks like on the ground and maybe some opportunities for what we can do to be supportive in creating that flexibility and intentionality.

thank you, Chair Haney. Thank you again to the panel. Just a couple questions. Thank you for obviously, AB457 was just put into place in January, so time will tell. But I think the points that you brought up about some of the current challenges that are in place given some more recent changes, I just want to be able to understand. I'm not a housing expert. I don't sit on the Housing committee. But definitely an issue that I'm super passionate about. And so wanting to understand the issue with the super NOFA and what type of flexibility is needed that currently is not available that maybe we can do through policy to be able to help that. And then second, I'm interested in the infrastructure piece or the infrastructure challenges. So how is that calculated in terms of the project financing? Is that something that is covered through and does that make you competitive or less competitive? Just wanting to understand those types of things.

And are those timelines in terms of financing, does it work? I'm just trying to figure out how do we make it easier. Right. You have, it seems like you have to apply to different and you're not guaranteed. So if you don't get the infrastructure then you can't build the housing. So for me it doesn't make sense. Like why are we piecemealing it versus figuring out a better streamlined way. Right. We're concerned with timeline and you know, we're in a crisis. So just trying to figure out maybe how we can as a legislative body figure those pieces out because it just seems so discombobulated.

And I would just add that most of the state housing programs, a competitive feature is being shovel ready. And the fact is that if you need to expand your water or sewer system or address a problem, you're not shovel ready. And an example is Planada. We bought land in 2003 that we were finally able to begin developing the housing 75 units of single family homes for farmworkers and others. In 2020 we were able to start and we're just finishing our last homes there now. And you know, that was 20 years because they had a sanitary who were challenged that had to be solved.

Just one last question, just because I know that in the last panel we do have the Department of Housing and Community Development. So can you just articulate again for me the challenges of using that supernofa just so that when the next panel comes up, I think that I would like to get some answers on this issue.

Great. Thank you.

It is. We do see the value and the benefits of exploring because the industrial zoning designation of the parcel is pretty outdated when you look at the environment around and what's been built since that original zoning you don't have. So across the street is a railroad track, but then you have housing around it and a small pocket of industrial uses. So it doesn't really reflect what's there now. And we think that the streamlining act, because it also allows you to streamline on the CEQA side, that is where we would save time. I know Mr. Huerta and the panel before talked a little bit about the opposition that he's seeing in some of those different communities that he's working in. We've seen oftentimes how CEQA becomes the avenue for people to fight against the project and so eliminating that. I think it's worth exploring. And I also feel like we kind of need a test case in our community. We did the Same thing with SB35 where in the beginning nobody was willing to take a risk they thought that we would see significant opposition from the community, feeling that there's no community engagement. So we offered the engagement as an added bonus, but still continued with the streamlining. And then, of course, we don't apply it in every community that everybody's a little different. So for us, in order to really test it out, it has to be the county as a leader to say we're willing to figure it out. Otherwise, I think it'll be really hard for a private owner to team up with an affordable housing developer, cobble together the resources. And so we're going to try it. We've identified the housing. Our local housing authority is our partner in that project. And we have a memorandum of understanding that we negotiated with the city of Gilroy for a minimum of 57 units.

Thank you.

Thank you.

Good morning. My name is Lindy Suggs from California Housing and Community Development. Several speakers today have highlighted the limited funding and reduction of housing for farm workers and in rural communities. I'm here to discuss the historical trends of production and the recent increases in funding and projects made possible through HCDs programs. As many have acknowledged here today, HC administers a variety of programs that provide funding for market housing and other affordable housing developments in rural areas. The Multifamily Supernova combines funding from four state multifamily programs and more than 1.6 billion in funding has been awarded in its first three funding rounds. And of this 1.6 billion, approximately 20% of these funds have been allocated for projects located in rural areas. And while not all rural projects exclusively serve farmworkers, of course, many of these developments in rural communities provide critical housing resources for farmworkers and their families. The Joe Cerner Jr. Farm Worker Housing Grant Program, also known as CERNA, is one of the four HC funding programs in the SuperNOFA. And it's HD's only multi family program dedicated specifically to farm worker housing. Established in 1978, CERNA is also one of HCD's oldest funding programs and it was created to support the development and rehabilitation of housing for low income agricultural workers. During its first 40 years, from 1978 to 2018, AC awarded approximately $271.5 million to develop 138 farm worker properties, but in just the past seven years, HC is awarded roughly double that amount, Investing more than 200 excuse me, investing more than 520 million to create new farm worker housing. Through Sarna, these Investments have supported 89 new multifamily projects with more than 5,500 units dedicated to farm workers across 19 counties. And as these properties continue to come online over the next few years, they represent an unprecedented expansion of safe and affordable housing opportunities for current and retired farm workers in California. In addition to the multifamily supernova, the Department administers several other programs set aside a portion of funds for developments throughout rural California. The HSC Program Affordable Housing Community and Sustainable Affordable Housing and Sustainable Communities Program is currently in its 10th year of funding. It has a defined rural project type and set aside of 10% of funds in any given NOFA cycle. For rural projects, funds are awarded for both affordable housing development and the necessary related infrastructure, as well as transit and active transportation improvements that work to reduce greenhouse gas emissions. To date, the HSC Rural Set asides have funded 31 projects delivering more than 2200 units in rural jurisdictions and as we heard earlier today from the speaker from Napa county, they continue to support infrastructure and farm worker housing in California communities. Additionally, while the INFO Infrastructure Grant, also known as IAG Program, is one of the four programs currently in the multifamily Supernova, there is a separate funding component for small jurisdictions. Under the small jurisdiction component, rural projects do not have to compete against larger urban infill projects and while not exclusive to rural jurisdictions, rural projects do benefit from reduced criteria for qualifying as an infill property. On the single family side of things, HCD has an existing portfolio of 1,400 homeowner loans made to farmworker households across 31 counties in California. The funding source for these loans was the CERNA program, and while HD no longer provides assistance directly to individuals, the Department continues to support homeownership through CERNA as well as the CalHome program. Funding for these programs are now combined under a single homeownership supernova known as hosen. To date, the CERNA Single Family Homeownership program has provided $30 million in two NOFA rounds to support approximately 200 farm worker households through mortgage assistance Acquisition of manufactured housing, owner occupied rehabilitation loans and technical assistance. CalHome also promotes homeownership opportunities by providing down payment assistance to low income households. While not targeted exclusively to farm workers, the program is known to support agricultural workers as part of its broader service population. In addition to HCD funded programs, there are also two multifamily housing finance programs administered by the state Treasurer's office that offer federal tax exempt bond financing for rental housing as well as federal and state low income housing tax credits. The California Debt Limit Allocation Committee, SIDLAC allocates taxes and bonds and the California Tax Credit Allocation Committee allocates tax credits. Both provide funding for rural housing. SIDLAC designates a portion of its total annual taxes and bond allocation which is currently between 4 and $5 billion annually to rural housing development. And in recent years, 3% of this amount made available for rental housing has been designated and awarded to rural housing projects. Over the past three years, funds awarded to rural housing projects has totaled somewhere between 130 and $140 million annually. Additionally, since 2020, the state budget has provided TCAC $500 million in state tax credits to be paired with SIDLAX bond financing. TCAC designates a portion of these state low income housing tax credits for rural projects, currently roughly around 15%. And state statute also requires $25 million of state tax credits to be designated for farm worker housing and 20% of its competitive federal tax credits to rural housing. And that's kind of the state of things HCV as of today.

Happy to answer any questions.

So housing affordability in rural California has unique challenges which start with the income limits which determine who we can serve and what we can charge people in rent. For instance, in Tulare county, for instance, a family of four and 80% of area median income is the limit is $75,100. In Ventura county, the comparable income level for a family of four is 119 almost $120,000. That's a difference of over $1,000 a month that we could either charge in rent or that somebody can pay in a house payment. In Tulare County, a family of four at 50% of area median income is right at about $47,000. And that means that family can only afford a rent of $1,174. And a family of two, that max is down to $940. This requires our operating costs to be leaner and the need for subsidy sources to be Far greater. I mentioned the infrastructure issue previously, but want to emphasize it again here. Most of the disadvantaged communities in quotes in the state without reliable access to clean water as determined by the State Water Resource Control Board, are in the San Joaquin Valley. We work with these communities to address their water and sewer needs. It is not unusual for us to wait a decade or more, as I suggested, in places like Planada in Merced county or Rossi in Tulare county to build a housing project. The rising cost of production producing housing is well documented with an increase of over 50% in construction costs since 2019. The inland areas used to be considered the last bastions of affordable homeownership, but that picture is changing. Some of this is due to a lack of true residential wage rates when prevailing wages are required, which means our costs are not markedly different than those of, say, the Bay Area. But as explained earlier, the rents we can charge for the house payment that our home buyers can afford are dramatically different. Another difficulty we face is the lack of local funding. We don't tend to pass local bonds or impact fee fees to build affordable housing in the San Joaquin Valley. This hurts in several ways. The obvious thing is that we don't have access to local subsidy sources. But this is exacerbated by state funding programs where the competition is tilted heavily toward projects with local support, including financial assistance. There are other barriers to funding. Some of the best programs are relatively inaccessible in most parts of rural California. The Affordable Housing and Sustainability Sustainable Communities program favors areas with comprehensive public transit, transit systems and built densities that are not appropriate in some of our rural spaces. The Low Income housing tax credit 4% program, and more particularly with state housing tax credit are rarely accessible without a major subsidy source that is hypercompetitive at the state level. And now even in a relatively new inland region. For tax credits and bonds, we are lumped in with the likes of Riverside county, which wins every time because they have more local resources. There are some solutions. Set asides like the 9% LIHTC program are essential. We'd like to see more set asides for rural areas in other programs as well. And on the homeownership front, we are providing opportunities throughout the valley between our mutual Self Help housing program and other infill development programs. It is critical to adequately fund the Calhome and CERNA programs to keep these programs vibrant. And the difference between Calhome and other down payment assistance programs is important to understand. Only Calhome ensures that new units are built. Only Calhome provides a permanent revolving subsidy for subsequent home buyers only. CalHome is targeted to low income home buyers. I would ask you to remember this as deliberations over the allocations in the upcoming housing bond play out. And the bond is the single most important thing we can do to support additional rural affordable housing in California. Lastly, actions of the federal government is adding to our challenges. Just a few weeks back, USDA made dramatic changes to the 502 mortgage program which instantaneously made it inaccessible to rural Californians, including in our active self help housing projects in Huron and Fresno County, Goshen in Tulare County, Lamont in Kern county and Patterson in Stanislaus county. Adding to threats to rental assistance programs such as the treatment of mixed income households or mixed status households Apologize. Federal government in the near term can only be counted upon to exacerbate our problems. This is another reason that State of California leadership is essential. Thank you.

Thank you.

That's a really great question. You know, a lot of these issues that have been discussed today really aren't new issues to the department, you know, that we're actively engaged in this space. And, you know, today, while I discuss some of the modifications to existing programs to kind of address some of these challenges, and we've made some great progress, there's still a lot of work to be done. Of course, you know, right now, as everyone's abundantly aware of a lot of efforts and thought and strategies being put into the housing agency reorganization and also into AB519, and a lot of great minds in these working groups and conversations and leaders kind of putting their heads together to figure out the best way, most efficient way to create affordable housing in California. So I think there'll be lots of opportunities for input there. And I've been taking great notes today because we've heard a lot of really thoughtful suggestions about things, you know, different ways that we might be able to do things that could result in a more equitable deployment of funds across the state. But I think a lot of that work just remains to be done within that new housing agency reorg and some of these other conversations being had around the alignment of programs across state agencies.

also. Good question. I mean, first and foremost, when we do have guidelines updates, we always do robust public outreach during those times and accept comments and try to address those comments within the new iteration of guidelines. That's not super helpful right now because we. I don't think we have another supernova coming up very soon, but that's always a space to engage, you know, And I think also with these working groups around AB519 and the new housing agency. And perhaps Tom can address this a little bit because I know that you've, you've been actively involved in that space. But like I said, there are a lot of folks working together around the clock to kind of brainstorm ways to do things more efficiently, better, more equitably. Do you have anything to add?

Thank you. I think you pretty much answered some of the questions that I wanted to follow up with you. Tom, just any last minute, to Mr. Gonzalez from the city of Mendota. Can you think about any of the state requirements that you guys face in planning for permitting housing that don't make sense for rural communities or small communities like Mendota? And how can the legislature help small rural communities lighten that low? Especially as you talked about, you're the. Not just the city manager, you're everything else for the city.

So honestly, I mean, as I was hearing about, like, all the great programs and stuff, it's really tough for a city like Mendota to be, to, to be involved and to have somebody at the table because we don't have the resources. Like I just mentioned, I cover, you know, five different disciplines for my city. And I still got to go back and inspect some buildings today. So, you know, it's tough for me to fill out applications and get in line and try to see if, if we qualify for these funds. So if it wasn't for folks like Tom that's actually going around and has Mendota in mind all the time, and other cities, obviously there's such a big need. It's really tough for us to, to take advantage of any resources, for that matter. But the CEQA thing seems to be the one that. That's always been the problem, I can tell you. When I first took over the job as city manager, the city managers before my time had, you know, their libraries of CEQA reports there, 600 pages, dust all over them. Nobody ever read those reports. And none of those projects ever actually took place because the CEQA just bombarded and bombarded and those projects never took place. If there was some way that a severely disadvantaged community could get a waiver just for housing, and I don't mean just affordable housing, Mendota, we need every type of housing, and I think it'll all help together if we could get some type of an exclusion for that. That seems to be. CEQA has always been an issue. We've also, you know, inherited issues with Surplus Land Act. I mean, it's. That seems to be like, it supposed to do the right thing. It's supposed to help make sure cities do affordable housing. But it's done the opposite for us.

So I don't have any specific statistics on CalHome and funding awards and such, but I could gather that information, report back. I oversee the multifamily programs at hcd, so that's a little bit outside of my purview, but happy to gather the information and provide that.

If I may just add that it has been a critical and a great program and it has expanded housing supply for homeownership for low income people in California and it's the only homeownership program that can boast that, you know, particular success. So that's why we see it as critical. There are other good programs at CALHFA and elsewhere, but they don't expand to the extent that our housing crisis is partially because we're not building enough units. CalHome does that and so does CERNA actually, for farm workers, farmworker, homeowners. But so I would just add that.

I just want to say thank you to Chair Haney for allowing us the opportunity to one talk about some of the more recent legislation that this body took action in the last several years as it relates to farm worker housing in several different regions of the state. And then also much more broadly, listen to the challenges and the opportunities that do exist for rural communities so that we are also helping them build the rural housing and affordable housing options that they need in the various geographic locations. I was very impressed by what Napa county is doing with the farm Worker Center. I'd love to take a look at it at some point when there's some time maybe to tour it and see if that is something that can be replicated for communities like ours that have some of the same similar challenges. Thank you.

panelists that really there's a lot to

So I appreciate the discussion on all the issues that are affecting specifically rural housing.

Thank you. Thank you again, Summary member Soria, for your partnership and summary member Garcia and Pellerin for being here and participating in the hearing. And to all of our panelists and all the folks who are here who work with them and support them, we appreciate you and we're going to need your continued partnership as we move forward and really want to appreciate our staff here at the Housing Committee for their great work on this hearing. And to the speaker for really bringing forward this framework for reviewing with more depth some of the legislation that was, as we heard today, sought to address what is a very, very real and distinct challenge for our state, that we need bigger and bolder policy solutions and investments to address. These bills that we were reviewing today sought to do that, and they're an important part of the overall toolbox that we have to do so. But I think even the author of one of those bills would, would. Would probably agree it's not the only thing. There's a lot more that needs that we need to do, including to assess aspects of that legislation and how we can strengthen it and maybe adapt it to the realities on the ground. This is also a critically important time to be having these conversations. As we heard, we are in the process of hopefully considering and putting forward a housing affordability bond for the ballot that would look at some of these issues and hope to address some of the needs around farm worker and rural housing. We're also in the process of creating, under the governor's leadership, a new housing and homelessness department which will also be able to look closely at how to streamline some of the opportunities and investments that are needed for rural communities and farm worker housing. And then I think with the leadership that we have here and the conversation really accelerating around policy solutions on all of these issues, we're going to hear a number of bills that will, I think, try to address these issues within our committee. So we look forward to being able to dive in even deeper and to help to address these challenges and ensure that everyone in our state, both in urban and rural areas, who provide such important contributions to our communities, to our economy, and deserve to be able to have affordable, accessible housing for their families that are close to where they work. And so with that, we'll keep working. We'll keep collaborating on this, and we'll keep working with all the folks who are here today on these solutions. And thank you so much for everyone who participated. This hearing is adjourned.