Assembly Standing Committee on Housing and Community Development

All right, we are going to get started. Welcome everyone to the Committee on Housing and Community Development. Today we are going to have the second of our application outcomes review hearing. This bill, this hearing focused mainly on AB 457.

But in addition to looking at AB 457, which we're going to talk about at length, we're going to be speaking more generally about the challenges and opportunities to build farm worker housing and housing in rural parts of the state.

For those of you who know the district that I represent, it is not famously a rural district, it's probably the most urban district in the state.

So I'm very grateful to have folks here with us who are joining us, my colleagues who have been such tremendous leaders on ensuring that we have broader access to housing and affordable housing for farm workers and more generally in rural areas of California.

I especially want to thank Assemblymember Soria for joining us today for her leadership and partnership, and also acknowledge Speaker Revis's new outcomes review initiative. This is a process that reflects a simple but important principle. Passing a Bill is not the end of our job.

Bill signings are important, but impact is what matters, especially when it comes to solving for housing affordability that affects all Californians. Our responsibility is not just to pass laws, but to evaluate when they are working, whether they are being implemented as intended, and whether they are delivering results for Californians.

California is the leading US State for agricultural production, generating billions in sales and providing half of the nation's fruits, vegetables and nuts. The Central Valley and Salinas Valley are key agricultural regions, and farm workers are essential to supporting our agricultural economy.

Farmworkers are paying high rents and in some cases commuting long distances because there are not, there's not affordable housing near their work. The Bill we are going to be looking at in depth today, AB 457, was built upon by two other bills.

AB was built upon two other bills, AB 1783 by Speaker Reavis and AB 3035 by Assemblymember Pellerin, who is also joining us today. The goal of these three bills was to make it easier to build farm worker housing by creating a streamlined ministerial approval process that borrowed from SB35.

The premise is that making the local approval process more efficient will create more certainty for developers and result in housing cheaper and faster, in this case, housing specifically for farm workers. AB 3035 and AB 457 made reforms to the original Bill, AB 1783, to make it work better.

The reforms changed where the Bill applied to sites that are in close proximity to agricultural land, but not on agricultural land, and increase the total project size to make the developments more financially feasible and competitive for state funding.

Today we will learn about the barriers to utilizing that process created by these bills and improvements to the bills to make it work better.

We'll also be talking more generally about farm worker and rural and housing in rural areas to learn what makes it harder to build this housing and what, if anything, the state can do to make it more feasible.

With that, I want to invite the author of this bill, Assemblymember Soria, to make opening remarks and then also invite some Member Pellerin to make remarks as well. Assemblymember Soria, welcome.

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 farm worker immigrants and so I know the plight that many of our farm worker families have to go through.

And as I've been here now in the Legislature for the last, this is my fourth year, I've learned about, you know what 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 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, you know, 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. Appreciate it. Assemblymember Pellerin, 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.

And 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. So oftentimes farm workers and their families are forced to live in temporary shelters, motels, garages, vehicles. So I am so grateful for the work of Assembly Speaker Revis and his original Bill 1783. We built upon that in AB3035, making it for Santa Cruz and Santa Clara counties.

And I'm grateful to Soria for your work and bringing this to the Central Valley. And you are certainly know very well firsthand how important this is to build the Good morning. The the affordable housing we need for our farm workers doing this incredible work. So thank you for having me Here.

Thank you both for those comments and also for your leadership. As I said, this is an area that you all are experts on, where you've done tremendous work, where your districts are really deeply, deeply connected to some of these questions and challenges. And again, as a chair that represents a much more urban area.

I'm really looking forward to this conversation to learn what we can do, to learn how all the decisions that we make in this Committee, in this body should be deeply aware of the unique challenges that are being faced by our rural communities and that can make us, help us make better decisions in everything that we do here.

So we've got some experts here at the dais, but we also have experts I know who are going to be joining us here to provide direct, their direct experience and expertise on these issues.

So I want to, we're going to have four different panels and I'll bring each one up one by one and I'll introduce, I'll ask them each to introduce themselves and they'll have five minutes to present and then we'll open it up for questions and answers after that.

And we will have an opportunity at the end for folks who want to give a public comment as well. So with that, I want to bring up our first panelists who are going to be sharing their perspective on the challenge and opportunities of building more farm worker housing.

We have Mat Huerta, who's affordable housing consultant, Jennifer Palmer, the Director of Napa County's Housing and Homeless Services, and Bonita Villobos Rivera, National Vice President of United Farm Workers. Welcome. So we can start with Mr. Huerta.

Thank you. Thank you. Chair. Just very briefly, Matt Huerta, Affordable Housing Consultant based in Salinas. I do statewide advocacy, organizing, support and leadership coaching and training.

Hi. Bonita Villa Rivera, third Vice President of the 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.

Good morning. Jennifer Palmer, I'm the Director of Housing and Community Services for the County of Napa and our Department oversees the homeless services. We run three county owned farmworker centers and we make all the investments for the Affordable Housing Fund.

Sure. Five to seven minutes. Okay. Thank you. So. Yeah. Good morning, Chair and Assembly Members. Again, thank you for the opportunity to speak with you today. I am 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 Azunar 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 farmworker housing is evidenced by 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 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 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 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 four beds for seasonal farm workers. 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. AB5 457 and its predecessors are a stated commitment to opening up more pathways for farmworker 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 in creating more sites and if we had more certainty that the subsidy was there to ensure strong financing plans. The LIHTC Program, JOCERNA 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.

Thank you. Appreciate it.

Ms. Director Palmer.

Good morning and I 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 and sorry, I have a PowerPoint. It is not necessary to look at these PowerPoint slides.

I just want to say, like, 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 are 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 farm worker centers. The county owns and operates 360 bed farmworker centers.

So 180 units of nightly lodging. We serve about 400 farmworkers a year through those centers. The really unique thing about 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.

That 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 other county funding, so we don't Fund anything with our affordable housing Fund that doesn't have set asides for farmworkers 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.

And 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, 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 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 farm worker 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 in Napa wanting to make housing available. And we're not competitive for getting these big CERNA funding projects.

If we could get a 3.0 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.

Gonna have to move on in a second if you.

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.

Thank you. Thank you for that, Ms. Villalobos. Rivera.

Okay. Hi, My name is Bonita and I come from the Central Valley as well. I grew up in Woodlake from farm worker family and I live in the Central Coast. So I have been with the farm worker union movement for about 25 years. So I've seen a lot of the struggle for farmworkers and especially housing.

The UFW does support the state's effort to increase housing for farmworkers. We believe that the housing should have a first come, first serve priority in the sense that the local farm workers should have a priority.

A lot of Monterey County right now there's a shortage, as everyone has been stating, in Santa Clara County, Santa Cruz county as well. Families have to double up, triple up to live and afford any of their housing. So what we would like is to make sure that any funding for housing complies with the prohibitions.

A lot of the housing that has been built in Central Coast has been for H2A workers. And we know that the H2A has increased and doubled almost in the last 10 years or so. But the H2A program has a lot of issues.

The farmworkers that are part of that program have a vulnerability because they're tied to their employer. Their housing is their transportation is their food, everything. And so sometimes employers don't pay attention or put effort into health and safety.

The workers can't bring up issues because they'll be afraid of being sent back before their visa is expired or their contract is done. They're afraid that they'll be blacklisted. So we just have to make sure that we aren't displacing our local workers that have been here and have contributed to our communities. Their children go to school.

They are part of our communities. In order to build housing, that is not for them, that they're not a priority. That's pretty much it for me on this end.

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.

Yeah, I did have a couple questions. Very fascinating to see what Napa County is doing in terms of your farm worker housing centers. Curious. Just in terms of a little bit more detail. So how are the folks able to get into these centers? Is there like an application? How long are they able to stay?

You know, do they stay there just Monday through Thursday and then Friday they go home? Because I know you mentioned there are some folks that are commuting longer times. Just curious to get a little bit more detail on that.

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 to do ask am I answering all of your questions? Okay, good.

Thank you for that. I just wanted to pose a kind of more General question in terms of some of the challenges of financing. Obviously we heard there are potential opportunities because you guys don't get are not able to I guess compete for some of the housing pots and then maybe some incentives as you were mentioning.

But just wanted to get into a little bit of given. Obviously we have the Joe Cerna program as one of the predominantly programs that helps build farm worker housing. But we're hearing if you're in a more remote area, there's the challenges of infrastructure. What would be the recommendation in terms of is it allowing does the farm worker.

The Joe Surna farm worker funding does not allow for infrastructure dollars to be incorporated as part of the budgets. What are the challenges there? Because I understand obviously there's infrastructure. There's not just off site improvements but also sewer water and so forth. So just wanting to dive deeper a little bit into those challenges and opportunities.

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, 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.

And if I could add one other suggestion from point scoring and funding sources, the affordable housing sustainable communities funding. ASIC is one of the funding sources that's used for infrastructure. So we've got a state surplus site at the Napa State Hospital that has just been made available as affordable housing.

We're looking to put farm worker housing and compete for CERNA funding. And ASIC will be what we use to put in the sidewalks that don't exist that go out to that project. It's how we're going to put in the sewer.

And so some way of whatever the point scoring is that would make CERNA as effective as possible for rural communities having that same kind of point scoring be attached to ASIC so that if a project is successful for CERNA, they're likely to be successful for ASIC because that is the infrastructure funding and it's a great funding source.

We've been able to use it for one project, but again then the scoring criteria changed and we've not had access to ASIC. Again, yeah, affordable housing, sustainable communities.

Yeah, cap and trade funding.

I think those are all my questions. Thank you so much for all the information.

Thank you. I had also a few questions about the NAPA program and in particular 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, the, the study in terms of assessing what the overall need is? And is, 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 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'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 a 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.

Yes, totally agree. So I'll take, I think I heard four questions. I'll start with the need versus the assessment. So our needs assessment, we have a year round stable farm worker workforce of about 7,000 farmworkers a year. At peak at harvest, that balloons up to 11,000. So we're probably a fairly stable 9,000.

And this provides service to 400 a year. So no, this isn't remotely covering the housing need. What it is, is filling a uniquely critical need that is providing just in time housing. So when somebody first arrives in the community, they've managed to secure.

The hourly wage of a napa valley farm worker is much higher than a central valley farm worker. So they're highly desirable jobs. It's highly skilled labor. They get here, they're working immediately. And what was happening prior to the centers is they were sleeping in their car, they were sleeping in the churches.

They were just trying to figure it out for the first month. This gives everybody a safe place to come. It's a network with other farm workers. It's a place to figure out how to access the housing there. We run at 96% occupancy. There is always a push for. What about a fourth center? What about.

And, and I will tell you, like for the last few years, this is one of the things that drove the assessment is, is it a fourth center? Is it three more cerna sites? We want it to be three more cerna sites. We want family housing. We want two and three bedroom set asides for farm workers.

When we're not competitive, I get increasing pressure to have to turn the conversation to a fourth center. The needs assessment didn't say, I don't think there was a single survey we had that said the housing I want is the farm worker centers.

They nonetheless could articulate that this was necessary housing and it helps stabilize their housing situation so it's affordable, it's stabilizing to our workforce, it's stabilizing to our economy. So it is a critical part of the system. But when I talk about this back in Napa, I talk about these as a navigation center, not an endpoint.

We just don't want farm worker centers to be the solution. We need it to be permanent housing. It's just there's a time lapse between what the need that exists right now and how long it would take us to build something.

The additional sources that we had, we actually just took a hugely controversial increase in our affordable housing impact fees. We did assessment for the annexa study and in the unincorporated county only, we are the home builders who. Who. There's a 30 acre minimum parcel size.

So the homes that are built on the acreage in the Napa valley are pretty large, pretty spectacular homes. And we saw no reason to offset the impact fees for those homes. They carry the full board. That means they're paying $86 per square foot for building. And all of that funding comes into the affordable housing Fund.

And that is what we're using to try and invest in the project. So that's increasing our Capacity locally to attract developers to build the housing. So it's one more reason why the CERNA funding becoming slightly more available to us. We're just trying to put all of those things together. The governance is a great question.

So we have a housing authority that oversees the farm worker center. So the. Within the county supervisors are also the housing authority Members and they appointed a housing commission that is a nine Member body that has specific seats. The vintners are one of those seats. The Napa Valley Farm Worker Foundation, The Farm Bureau.

There are specific seats for lodger representatives on the board. So it's a pretty diverse group. I think local real estate has a seat and then there are two at large Members and that's the housing commission I report to on a monthly basis. So those are public meetings. We bring the full operational picture to them.

All of the funding that we deploy to operate the centers, all the contracts come to them for review and oversight. So it is a pretty diversely governed group and the county can't just make a decision.

As much, as much as sometimes we might like to, we really respect the public process because the conversation then naturally is a more diverse conversation. To start out. And I know you had a fourth question in there and I just wrote the word what and I underlined it and now I don't remember. Okay, thanks.

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, it's really helpful for us and appreciate your partnership on, on, on moving this forward.

Thank you. 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 AB457. And I will invite up Consuelo Hernandez, Deputy County Executive of the county of Santa Clara and Tom Kalashaw, the President and CEO of Self Help Enterprises. Welcome.

Good morning. I hope you can hear me pull this in a little bit. Consuelo Hernandez, Deputy County Executive for the County of Santa Clara. Within my portfolio I manage the Office of Supportive Housing, the county's Facilities and Fleet Department, Asset and Economic Development.

I also have a couple of administrative projects that are very closely tied to your hearing today. One is related to our Agricultural Workforce Housing Initiative and, and our agricultural Economic development. I've spent a little over 20 years in the public sector. I'm a planner by trade. The last 10 years I've worked on implementing an affordable housing Bond.

And on a personal note, I'm a proud daughter of immigrant parents. My grandfather was a bracero. So as you can imagine, the issues of housing is particularly of interest to me. Thank you for having me this morning.

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.

Do you want me to go? Sure. Okay, wonderful. As I mentioned, I am a planner, so I'll kind of keep this a little bit more practical. We in the county, as you can imagine, we don't control local land use. We rely on the 15 incorporated cities.

We have taken initiatives to be a bit more proactive in the rural zones and rural areas, but just wanted to share with you, like that role that we've played. Over the last 11 years. We have funded over 8,000 housing units. And so we're basically taking that same approach with this bill.

We had very similar experiences when SB35 passed. It took communities about three years to fully implement and really understand how to activate a land use policy like that in housing. So for us, the way we see the three bills, it's like a journey, or you're kind of making these adjustments as you go along.

But really one of the biggest observations we have found is that unless the county is aggressively and proactively engaging with the development community, you're not going to see a ton of development happen. And so we've kind of pivoted our approach a bit to model it after what we did on the homeless side.

So backtrack to 12 years ago. We had 300 units of permanent supportive housing in, in Santa Clara County. Today we have over 4,000. And that was because we had the right streamlining on the housing side. We had the right systems in place with the planning offices. We had a local 950 million dollar housing bond.

We also received an allocation from the state, a little over 100 million in no place like home that was dedicated specifically for people with a serious mental illness or homelessness. We put all of that money together, matched it with the local sales tech on the supportive housing side for the services.

And we were able to like create this really, really progressive and advance all of that around homelessness. So we think we can do the same thing. On the AG worker housing side. We are. A couple of weeks ago, we celebrated our second project using that model, 66 units. Of those, about 20 are set aside for ag workers.

Most recently, we were also awarded a $2.2 million Joserna grant for an ag worker homeownership program. One of the things that we found from our local survey was that people wanted a variety of housing types. And for some folks, a manufactured home is still one of the primary ways that they can become homeowners.

And so through that grant, we'll be able to assist 10 ag workers specifically acquire their first, their first home in the way of a manufactured housing. We have identified one county owned parcel. It's in the City of Gilroy. It's about 1.5 miles away from ag land. So it could potentially qualify for the streamlining bill.

But there is a little, a little potential challenge that we have, and that's the. The AB3035 and AB457 require that a portion of, you know, the parcel can't be fully industrial. And in Gilroy, that parcel is actually zoned industrial.

And so we'll be working with the city to figure out a way to either have a general plan amendment or really figure out how can we change and how can we work together to streamline this so that our project can fit into the agricultural housing model.

We also have partnerships with the Santa Clara Housing Authority, our local transit authority water board. They have available land that we are potentially going to be partnering with them to see how we can apply this, this set of Legislature around in streamlining to apply that. It does not solve the issue of financing.

You heard from my colleagues before on the first panel that that remains the biggest challenge. I think what you all have done in your leadership roles with these bills is create the environment for ag worker housing to happen.

And now we just have to be creative and really requires the county to step in and lean in, just like we did on the homeless side. And what we did there is we created a goal. Nobody thought we could do it. We actually started with a very small goal of 1900 and today that's 4000.

So that's kind of a bit of a pivot that we have. I wouldn't give up on the bill yet. At least locally for us, it's only been a year. We do speak to developers and it's just part of the process. So happy to take questions and talk more, but be mindful of time. Thank you.

Thank you. Appreciate it. Thank you for the opportunity to provide feedback on efforts to support housing for our essential agricultural workforce. Self Help Enterprises was born in the San Joaquin Valley over 60 years ago with the express purpose of improving the living conditions of farm workers.

Initially, this work revolves solely around our mutual Self Help housing program where families work alongside one another to build their first home by providing sweat equity through their labor. The typical building group consists of 10 to 12 families with a shared labor requirement that requires that no one moves in until all of the homes are completed.

To date, that program has provided home buying opportunities to nearly 7,000 families, of which at least 70% have been farm worker families households in addition to this legacy program, Self Help Enterprises has expanded to include rental housing development as well as infrastructure development in rural communities.

We currently own and operate around 3,200 units of rental housing at at over 60 sites, with about 25% of those units reserved for farmworkers, either through state or federal programs.

Although I would say that I estimate that over 60% of our residents in those 3200 units are actually farm workers and our efforts in infrastructure have resulted in over 36,000 connections to new clean water or sanitary sewer systems. We have not yet had the opportunity to take advantage of AB 457 in Fresno, Madera or Merced counties.

On the one hand, it's still early to tell, as has been mentioned, whether projects may emerge which could utilize the streamlining contemplated by the bill.

We have a robust pipeline of sites that will yield over 1200 additional units of affordable rental housing and 600 single family homes, but we only add perhaps three to four new sites each year. In other words, much of our existing inventory of sites were purchased prior to AB 457.

But for future sites we will look closely at the and the expansion and with the expansion of the eligibility around geography, the 15 miles as well as size of the project and proximity to farm work will all be potentially useful as another streamlining and buy right tool for development. Infrastructure is still the primary consideration for new sites.

Many of our rural communities have challenges with water and sewer primarily. The second consideration for rental housing at least, is the needed nearby amenities to compete effectively for state funding, including low income housing tax credits.

The third issue to be competitive for many state programs is opportunity maps, which continue to feel not exactly accurate or an accurate reflection of opportunity in rural spaces and rural census tracts. The biggest game changer for us has been the ministerial approval processes created by SB35 and AB 2011.

We have changed our approach to committing to sites based on wherever possible, on existing zoning or utilizing these buy right development opportunities. To the extent that AB457 may expand these pathways on unique sites, we will continue to explore it for future opportunities. More broadly, we have encountered new barriers to farmworker housing development in recent years.

Mostly these barriers relate to how the Joe Cerna Jr. Farmworker Grant Program is being deployed. These comments are made in the context of widespread fear in our farmworker communities about federal immigration enforcement. These are tightly knit communities that still rely heavily on personal contacts and word of mouth.

Even though the CERNA program does not require documentation of residency status, sharing sensitive personal information is a visceral threat. The the Current Environment to be competitive for 4% low income housing tax credits with state credits, you must commit to more than 50% of your project units to be Cerna farmworker.

While 100% farm worker projects were the norm for us in past decades, our preference today is to plan blended projects that integrate farm worker households with other affordable housing user groups.

This reduces any stigma that might be attached to a full farmworker program, and we believe it has other benefits for communities as well, including making it easier to absorb the farmworker units.

From a marketing standpoint, we prefer to put 25 to 30% farmworker units into our projects, but the current system does not really Fund projects very easily of that sort of. A recent example of a blended project is our Los Arroyos rental housing project in Farmersville where we built 104 units. 108 units, sorry, in two phases.

The first was a federally funded documentation required USDA farm worker project and the other was had 30 units of CERNA. So we were able to to blend those and that kind of a blend really has provided benefits to operating projects.

Another mismatch is that the CERNA program is now part of what is called the Super NOFA competition for state funding, where deeper income targeting is what competes well, including extremely low income or ELI units that are below 30% of area median income.

Let's just say that there are plenty of farmworker ELI units across the state that are currently vacant. The reality is that employed farmworkers are rarely at incomes this low. They are very difficult to find and we were concerned when they were combining CERNA into the supernova for that very reason.

And it's definitely playing out as we had suspected. We have also argued that farmworkers should be considered a special needs group in the LIHTC and BOND programs. There remains an additional problem in that CERNA is presumed to be rural for set aside purposes in certain programs, even though CERNA does not have to be built in rural areas.

You can build CERNA in the City of Fresno that has 600,000 people. This restricts funding for blended projects of the type that I described earlier, overall, farm worker housing needs to be flexible.

Funding needs to be flexible, developed and developed and managed by entities with not just proven capacity to build housing, but also a demonstrated commitment to serving farm workers in the current environment of intentional threats from our Federal Government. This is vital. Thank you.

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 to the authority.

Thank you. Chair Haney. Thank you again to the panel. Just a couple questions. Thank you for. Obviously AB 457 was just put into place in January, so time will tell. But I think you know 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 supernofa and what type of flexibility and 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.

Yeah. The, the infrastructure question, the CERNA program and most of the housing programs don't really Fund the infrastructure pieces that are often needed in our rural communities. Like you can't expand the sewer system by utilizing CERNA funds. The infill infrastructure can help with some of those improvements and that's been an important resource.

But mostly when you're looking at community water wastewater, you really are talking about the State Water Resources Control Board and the what's now the SAFER program, which, which is funded through cap and invest. Now I got to get used to cap and invest.

And we are utilizing that program in many small communities like places like Orose and planada and places like that. But they tend to be separate resources just for the infrastructure piece of the type that I was referring to.

And are those timelines in terms of financing, does it work? I'm just trying to figure out how do we make it easier. 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 time, 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.

If I can add, I know you're going to hear from the HCD team, state HCD after us, in their effort to kind of combine to have that predictability that you're referring to from a financing perspective. The one stop shop supernova. I think it's just trying to layer too many types of housing projects.

So kind of takes away from the opportunity to really focus in or hone in on the Joserna type of applications. So you end up waiting a lot longer than you would have had there been a different funding cycle for specifically Joe Surna. But of course that adds a lot of staffing needs that it's a balancing act.

I think the infrastructure, the IG grants and the ASIC, like if you had something comparable or parable without taking away from existing resources that was specific to the infrastructure needs in the rural zones, that would be something for you all to explore because you can potentially be competitive for ASIC or IG, but it's not closely tied to like the rural zones.

So like ASIC is looking at, you know, you get points if you partner with a valley transportation authority to add a bus line or you know, walking paths. But in the rural zone you're not going to bring a bus line over to wherever it might be.

But there are other incentives that benefit the community like a sidewalk or the wastewater treatment because of the volume that you would expect with the multifamily housing. So I think there are opportunities, but like everything else, there just aren't enough resources to go around.

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 farm workers 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 sewer challenge that had to be solved.

One other maybe opportunity. I'm not sure if you're familiar with no place like home dollars, but each state HCD created a really great incentive for local Communities that were able to demonstrate they had the capacity to issue and distribute the funding directly.

It basically meant that if you qualified and you were designated as an alternative county for those dollars, you were, you had local control and you were able to kind of pair the timing of that funding with other resources without competing across the state for those dollars.

So like a direct allocation of Joe CERNA funds to our communities would allow us that timing predictability similar to what we saw with the no Place Like Home funding.

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.

When we combined the MHP program, the multifamily housing program, which is the largest rental housing program with CERNA and the other programs, things tend to revolve toward the MHP competition which does accentuate the lowest targeted income projects, which, which actually makes a lot of sense from a statewide priority. And so I don't challenge that priority.

But it doesn't fit the CERNA program because farm workers do better than 30% of area median income in the counties at least that I work in. And so trying. We need to be building two and three bedroom units, not single bedroom units at 30% of income and looking for 30% AMI farmworkers because they're hard to find.

And yet we have all kinds of families of 456 people who need units and they need them affordable to them, but they need it affordable at 50% of AMI or 60% of AMI, not 30%. So somehow we've got to carve out the CERNA program from that supernofa tendency where the dollars are going.

Great, thank you.

I had one question from Ms. Hernandez. So you mentioned that there's a project that you all were looking at in Gilroy and that it didn't perfectly fit for the to work within AB457 because of the industrial use.

And when you're, when you're looking at that, what, what are the, the benefits as you see them for using 457 as opposed to not.

And is it worth sort of the extra steps that you sounds like you would have to take within city of Gilroy to, to make those changes to make it fit or is it just not even the benefits are not such that it's worth those extra steps.

It is, we do see the value and the benefits of exploring because the industrial zon 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, you know, 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. Uh, 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.

Got it. That's. That's very helpful. Uh, well, thank you to, To. No, thank. Thank you to. To both of you. Really, really appreciate it. And, uh, really, uh, helpful for us to understand the realities on the ground. Thank you. Thank you. All right, we're going to bring up our last panel. I think you're staying for this one.

You're doing double, double panel duty here. And we'll bring up Lindy Suggs, who is the chief, a branch chief of chief of Asset management for the Department of Housing Community Development. And Christian Gonzalez, the city manager of city. The city of Mendota. Welcome.

Thank you.

Thank you.

Okay. Good morning. My name is Lindy Suggs from California Housing and Community Development. Several speakers today have highlighted the limited funding and production 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, HD ministers a variety of programs that provide funding for farm worker 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 farm workers and their families.

The Joe Sterner Jr. Farm Worker Housing Grant Program, also known as CERNA, is one of the four HD funding programs in the SuperNOFA, and it's HD's only multifamily program program dedicated specifically to farm worker housing.

Established in 1978, CERNA is also one of HC'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, HC awarded approximately $271.5 million to develop 138 farm properties.

But in just the past seven years, HC's 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, Excuse me, HSE 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 NOFO 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 1400 homeowner loans made to farm worker households across 31 counties in California. The funding source for these loans was a CERNA program and while HC 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, 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.

And 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 dollars 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 Sidlock's bond financing.

TGAC 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 as of today.

Happy to answer any questions.

Thank you. We go back to Tom.

I think. Great. 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 at 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 in 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.

Good morning Chair Haney and Members of the Assembly Housing and Community Development Committee. My name is Christian Gonzalez. I serve as the City Manager for the City of Mendota, the Cantaloupe center of the world. I also serve as the building inspector, economic development manager, the public works Director and everything else you could think of.

And I say that because I. I want to try to mirror the hard work that the residents of the city of Mendota perform out there to. To provide those needs that those goods that that we Tend to to need to provide a healthy family before entering public service. My background was in construction as a General building contractor.

I began working with the city of Mendota about 16 years ago, which has given me a unique perspective on housing from both the development side and the local government side. Mendota is a small agricultural city in California's Central Valley.

Our residents are primarily farm workers and working families who help sustain one of the most productive agricultural regions in the world. Despite the importance of this workforce, our community continues to face a serious challenge, A lack of affordable housing and very little to no new residential construction.

One of the biggest barriers we face in our distance from major metropolitan areas is just that we're so far from resources. And while urban communities often see strong housing demand and private investment, smaller rural communities like Mendota frequently struggle to attract developers.

While construction costs may be relatively consistent across the state, whether homes are built in large cities or small towns, however, the potential sales price or rental income in Mendota are much lower than because they must match the income levels of the local workforce.

As a result, many developers simply do not see financial return necessary to justify building housing in our community. In addition to market challenges, Mendota also faces physical conditions that increase development costs. Our area has difficult soil conditions that often require additional engineering, soil stabilization, and deeper foundations before homes can even be constructed safely.

Those requirements add significant cost to projects before construction begins. On top of that, the environmental review process can also be extremely burdensome for small communities like ours. Projects that require review under the California Environmental Quality act often take months to complete and require specialized consultants that add significant cost to housing projects.

For large developments in major metropolitan areas, those costs may be manageable, but for smaller rural communities, those projects cannot move forward and they make them financially infeasible. For disadvantaged communities like Mendota, a more streamlined environmental review process for housing could make a meaningful difference in helping bring projects to rural areas that desperately need them.

Recognizing many of these challenges, the city of Mendota City Council took a significant step three years ago.

The council approved a three year moratorium on development impact fees for residential construction in an effort to attract developers and encourage new housing for a small city that relies on those fees to support infrastructure as streets, water, sewer, and public services.

This was not an easy decision, but our council understood that if we wanted to encourage housing development, we needed to reduce barriers wherever possible. Today, we are only a few months away from the end of the three year moratorium. Unfortunately, despite eliminating those impact fees, we still do not have a single residential Development project currently under construction.

Meanwhile, the need for housing in our community continues to grow. In Mendota, families have historically supported one another by living together in multi generational and often overcrowded housing conditions. It is common for extended families to share homes in order to make ends meet to help each other succeed.

Over time, many of these families have worked hard, built stability, and created equity in their homes. Today, many of them are eager to purchase a second home in our community, not as investors, but but as a way to help relieve overcrowding and provide space for their children and extended family Members.

In other words, the demand for housing exists in Mendota. Our families want to stay in the community they help build, but the housing supply simply is not there. Our experience highlights an important reality. Local free rejections are not enough to overcome the structural barriers facing rural housing development.

Developers still face high construction costs, environmental review requirements, challenging soil conditions, and smaller housing markets. Without additional support and policy flexibility, many projects simply cannot move forward. That is why discussions like Today's review of AB457 are so important. Rural communities face housing challenges that are fundamentally different from those in urban areas.

If we want to support farm worker housing and rural affordability, policies must account for the unique realities of small agricultural cities, including smaller housing markets, higher per unit development costs, and regulatory processes that can unintentionally slow or prevent projects from moving forward. The city of Mendota is committed to doing its part.

Our city leadership has taken meaningful steps to reduce barriers and encourage development. But small rural communities cannot solve these challenges alone.

We need stronger partnerships with the state housing organizations and developers to create solutions that make rural housing projects financially feasible because of farm workers and working families who sustain California's agricultural economy deserve access to safe, stable and affordable housing in the communities they call home.

California depends on rural communities like Mendota to feed the state and this nation. And those communities deserve the same opportunity to build housing for their families as any other city in California.

Thank you for the opportunity to share Mendota's experience and I appreciate the committee's attention to the unique housing challenges facing rural California and the west side of Fresno.

Thank you.

Thank you to all of you for your presentations. I have a couple questions. Want to start with Ms. Lindy Suggs?

So what I've learned in the last several weeks in talking to folks from my area when it comes to these housing dollars, and I appreciate the presentation and the efforts that have been made for dollars to go to rural and these disadvantaged communities, I just want to read some statistics about My region, the San Joaquin Valley.

So the San Joaquin Valley share both. Share of both the RENA and population is about 11% of the state's total. Yet in many of the state's housing funding programs, the Valley gets a far smaller share of funds.

For example, 6.2% of the last three runs of HSC funding came to our Central Valley, 4.5% of the state LIHTEC credits since 2023, and only 2.2% of Sidlak bond allocations necessary for the 4% LIHTC credits over that same period.

And then not a single dollar of MHP funding in round three of the multifamily supernofa went to the Valley. We obviously know just by one example of the city of Mendota, and I have many city of Mendotas, as Tom knows. And so for me, this issue is very, very important. And.

And that's why I want to thank Chair Haney for taking the time to highlight what is happening in rural communities like the ones that I represent.

And so obviously, all of these programs define and allocate funds to geographic and rural regions differently, with the Valley often split or lumped up with other parts of the state, as we heard from Tom, which I think significantly disadvantage our community.

So to maybe just kind of the work that the Department is doing, what efforts are being taken or can be taken to maybe standardize these categories and to ensure an equitable awarding of funds to our region, who also desperately needs these funding allocations,

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, you know, a lot of efforts and thought and strategy is 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.

Their heads together to figure out the best way, most efficient way to create affordable housing in California. So I think, you know, 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.

So how can our region kind of continue to give you guys input as you guys are doing that reorg so that again, I know progress has been made and you guys have made several changes that I think overall has helped the entire state.

But again, we talk a lot about equity around this building and what the reality is that we are not getting an equitable share in the Central Valley yet. The needs are extremely high in our region as well.

So I just want to make sure, you know, I know that we have Tom and you know, folks like Mr. Gonzalez here from Mendota who can speak to, you know, continue to speak to the challenges and barriers that may be could be made, adjustments at the Department level versus having to wait another year for a legislative proposal

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 for 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 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?

Yeah, I mean, I would acknowledge ATD tries and it's complicated. Right. We're a diverse state and having good dispersion of available resource is a tough, tough thing.

And the conversations around 519have been robust and I think the Department has approached them in the appropriate way and acknowledge some of the shortcomings of an agency that is perhaps better at compliance than they are at partnering and being flexible with new opportunities. So I think those are all good.

But I do want to give an example of just another thing that becomes a problem. And again, a well intentioned approach to these opportunity maps which have been in place now for over 10 years.

We've complained in the rural spaces that it doesn't accurately reflect because for instance, the opportunity maps which you need in certain programs to be in high opportunity areas to compete effectively if you're in Mendota, the nearest high opportunity is in Clovis. That is not a housing choice that somebody in Mendota is going to make for their family.

Their work is near Mendota, their family support systems are in Mendota. And so if you're saying that the only way we can house somebody in Mendota is in Clovis, you've got a mismatch. Right. And I know that people have worked to make the maps more usable for our rural counties, but the fact is they don't work.

And there's been a resistance to just saying, you know, for rural California, maybe we shouldn't use the opportunity maps for this, you know, this point system. There's been resistance to that because people become tied to, you know, these, these, you know, well intentioned kinds of metrics that, that, that we use. So I just wanted to add that.

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 in that low. Especially as you talked about, you're the, not just the city manager, you're everything else for the city.

I try to be. 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 take advantage of any resources for that matter. But the CEQA thing seems to be the one 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 now 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 inherited issues with Surplus Land Act. I mean 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. You're welcome. Thank you.

I wanted to also just jump in a little bit more on Calhoun. Do we have any stats on how many homes Calhoun has been responsible for or. You know, I think that Calhoun is interesting to hear how critical that is and how particularly for what.

For the success where we have seen it and some of the need to really expand and accentuate the support for that program, especially as we look at the bond.

I don't know if there's anything more to share about that, but that's helpful for us as we're looking at the budget and also as we're talking about the bond and if there's anything that would change about the program for folks who are on the implementation side. But is there anything that you would share about CalHome specifically or.

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.

Thank you. Appreciate that.

Yeah, thank you. 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 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. So. And so does CERNA actually for. For farm workers. Farm worker homeowners, but so I would just add that.

Thank you. Appreciate it. Well, thank you again for all of you for your work and your partnership.

This is, I think, given us a lot to think about in terms of what we can do to make sure that we support the particular housing needs and affordability needs of rural areas and appreciate your leadership and all of the many jobs and hats that you do. Appreciate that for sure. Thank you. Appreciate it. All right, so

the last thing that we have is if there are folks who are here who want to provide any public comment. If you'll line up if there's anyone here for public comment. If there is not, that's fine too. Great. Okay, so we'll close public comment and if there's any closing remarks that, that you want to provide.

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 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.

I just want to thank Mr. Chair and everybody here and all the panelists. I really. There's a lot to learn for, for me being on the Housing Committee added mid year last year. So I appreciate the discussion on all the issues that are affecting specifically rural housing. Thank you.

Thank you. Thank you again, Soria, for your partnership and somebody 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 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, on these solutions. And thank you so much for everyone who participated. This hearing is adjourned.