Executive Summary Through a process of gathering primary and secondary data on the Salinas and Pajaro Valleys, the study team has been able to identify some specific needs, barriers and solutions to the farmworker housing crisis in Santa Cruz and Monterey Counties. To complete our task, we assessed both primary and secondary data. We undertook a thorough compilation and analysis of existing databases on agricultural trends and labor patterns in the region. From this research, we found that the estimated number of unique individual workers employed in the region during 2016 was 91,433. An estimated half of California’s current crop workers tell government interviewers they lack authorization for U.S. employment. And those who are documented are aging. Finally, the flow of foreign agricultural workers into the U.S. has declined sharply. Some employers report labor shortages. Intense efforts to mechanize every aspect of production are underway. Still other employers have sought H-2A workers to supplement their domestic workforce. We implemented a survey of farmworkers in the laborshed as well as interviews with employers and other stakeholders to gather primary data. Among the farmworkers surveyed, men and women were relatively evenly distributed across age groups with 75% of the interviewees married. The clear majority of the immigrant farmworker interviewees had very few years of schooling. They were 92% immigrants. About one fifth were followthe-crop migrants (FTC) who had traveled outside the two county area for agricultural employment. Most households of farmworkers interviewed included non-family members who were for the most part other farmworkers. There are consistently stunningly high rates of residences that are above the severely crowded condition of 2.0 people per room. This is true of almost all the subgroups of the population. About 40% of respondents live in houses, 30% in apartments. Another 19% live in rented rooms without kitchens -- either in houses or apartments. Another 12% live in “other” types of dwellings1. Eighty-nine percent of farmworkers were renters and 11% owners. Of those who reported as owners, a quarter own mobile homes. Of the employers interviewed, a vast majority viewed the labor shortage as their main challenge to success. Those who did not hire 1 Like motels, boarding houses or barracks H2A workers had little knowledge of the conditions or type of housing in which their workers lived. And while the majority of employers noted that they were facing a labor shortage very few correlated this with a housing crisis. A primary idea expressed among stakeholders interviewed was that workers were frequently victims of the current policies in effect at all levels of government. Under this umbrella of “victimization” stakeholders mentioned exploitation of workers across the board. There were mentions of how workers are recruited and paid, migration challenges, physical demands of the work and displacement of workers through development choices. About half of the stakeholders expressed concern about the cost of developing more housing and how to pay for it. The farmworker housing demand model developed in this project calculates the total housing units needed of all types, based on target People Per Dwelling (PPD), and total permanent affordable farmworker housing based on current rate that farmworkers access subsidized housing. Key findings of the demand model were:   An astounding 47,937 additional units of farmworker housing are needed to alleviate critical overcrowding in farmworker households that are occupied at 7.00 PPD to the average PPD of 3.23 in Monterey County and the average PPD 2.60 in Santa Cruz County A total of 6,351 units of permanent affordable farmworker housing are needed to maintain the present access rate of 7.6 percent of farmworkers to subsidized housing. To accommodate future growth, we extrapolated the Low Income and Very Low-Income housing allocations designated by the Association of Monterey Bay Area Governments (AMBAG) in the Regional Housing Needs Allocation (RHNA) plan and found that:  When the present access rate of 7.6 percent applied to the RHNA allocation of 2,438 units of future need for the study are, we calculated that 177 units will need to be accessed by farmworkers to maintain the current rate of access. To calculate the housing gap, we surveyed the existing affordable farmworker housing stock and compared it with the results of the demand model as follows:   Adding 6,351 of current demand and 177 units of future demand yields an overall demand for affordable farmworker housing of 6,528 units. Accounting for 1,244 units currently in the regional inventory the housing gap for affordable farmworker housing was found to be 5,284 units. Determining the capacity of the regional development organizations (nonprofit, for-profit, and housing authorities) to address the housing gap for affordable farmworker housing we found that:   An assessment of the regional development organizations, currently active in the region, structure, development experience, units under management, staffing, and budget reveal that there is the knowledge and expertise to address the housing gap for affordable farmworker housing, However, projecting the number of units that these organizations, and others, can reasonably develop over the next ten years based on historical rates of development and in anticipation of increased funding and reduction of development barriers we calculated that an additional 930 units could possibly be constructed far short of the 5,284 units necessary. The non-profit, for-profit, and housing authorities examined all possess the experience, flexibility, and expertise to continue to build affordable housing units for farmworkers. However, project feasibility is constrained by adequate availability of land, cost of land, cost of construction, funding resources, and governmental regulations. The ability to address the housing gap is not solely dependent upon the capacity of the local organizations but required significant improvement in the conditions that restrict the development of affordable housing. Two primary housing funding programs in California2 require – through threshold project eligibility and scoring incentives – that project sites are within strict proximities to specific resources. Project sites meeting these proximity requirements are considered ‘high-amenity’ and are ultimately most competitive for these funding programs. Using spatial analysis, high amenity parcels within the study area have been identified. Zoning data was overlaid with identified high amenity parcels to determine the extent that these sites are appropriately zoned for affordable housing development. 2 Low Income Housing Tax Credits and Affordable Housing Sustainable Communities are current programs that fund affordable housing in California. Using this process, this is a summary of key findings presented and discussed here:      Ten communities within the study area qualify as ‘rural’ and are eligible for rural set-asides in LIHTC and AHSC. Of these rural communities, five (5) have sites that are considered to be ‘high amenity’. A total of 2,495 high-amenity parcels have been identified within the study area. Of the 1,976 high amenity parcels within the Cities of Watsonville, Salinas, and Castroville, only 13 parcels are currently zoned appropriately for multi-family housing development. Of the 349 high-amenity parcels in Salinas, none are sufficiently zoned for multi-family housing development. Although there are numerous parcels that meet program proximity requirements and that qualify for rural set-asides, the vast majority of these are not currently identified and targeted for multi-family development, and the sites zoned for multi-family development will not be competitive under these primary funding programs because of their lack of resources. The study area is well-situated to increase the number of high amenity parcels with the requisite zoning by:  Examining existing land use and zoning policies and aligning them with the Tax Credit Allocation Committee (TCAC) and AHSC proximity requirements.  Increasing collaboration amongst affordable housing developers and municipalities to identify specific parcels that are high amenity or close to high amenity and examine the opportunities to reduce development barriers or increase amenities.  Focusing transit investment in rural communities to increase the number of high amenity parcels and increase the competitiveness of sites within these communities.  Including the consideration of TCAC and AHSC proximity requirements in the region’s comprehensive and integrated planning processes. Through a process of gathering primary and secondary data on the Salinas and Pajaro Valleys, the study team has been able to identify some specific needs, barriers and solutions to the farmworker housing crisis in Santa Cruz and Monterey Counties. To complete our task, we assessed both primary and secondary data. We undertook a thorough compilation and analysis of existing databases on agricultural trends and labor patterns in the region. From this research, we found that the estimated number of unique individual workers employed in the region during 2016 was 91,433. An estimated half of California’s current crop workers tell government interviewers they lack authorization for U.S. employment. And those who are documented are aging. Finally, the flow of foreign agricultural workers into the U.S. has declined sharply. Some employers report labor shortages. Intense efforts to mechanize every aspect of production are underway. Still other employers have sought H-2A workers to supplement their domestic workforce. We implemented a survey of farmworkers in the laborshed as well as interviews with employers and other stakeholders to gather primary data. Among the farmworkers surveyed, men and women were relatively evenly distributed across age groups with 75% of the interviewees married. The clear majority of the immigrant farmworker interviewees had very few years of schooling. They were 92% immigrants. About one fifth were followthe-crop migrants (FTC) who had traveled outside the two county area for agricultural employment. Most households of farmworkers interviewed included non-family members who were for the most part other farmworkers. There are consistently stunningly high rates of residences that are above the severely crowded condition of 2.0 people per room. This is true of almost all the subgroups of the population. About 40% of respondents live in houses, 30% in apartments. Another 19% live in rented rooms without kitchens -- either in houses or apartments. Another 12% live in “other” types of dwellings3. Eighty-nine percent of farmworkers were renters and 11% owners. Of those who reported as owners, a quarter own mobile homes. Of the employers interviewed, a vast majority viewed the labor shortage as their main challenge to success. Those who did not hire H2A workers had little knowledge of the conditions or type of housing in which their workers lived. And while the majority of employers noted that they were facing a labor shortage very few correlated this with a housing crisis. 3 Like motels, boarding houses or barracks A primary idea expressed among stakeholders interviewed was that workers were frequently victims of the current policies in effect at all levels of government. Under this umbrella of “victimization” stakeholders mentioned exploitation of workers across the board. There were mentions of how workers are recruited and paid, migration challenges, physical demands of the work and displacement of workers through development choices. About half of the stakeholders expressed concern about the cost of developing more housing and how to pay for it. The farmworker housing demand model developed in this project calculates the total housing units needed of all types, based on target People Per Dwelling (PPD), and total permanent affordable farmworker housing based on current rate that farmworkers access subsidized housing. Key findings of the demand model were:   An astounding 47,937 additional units of farmworker housing are needed to alleviate critical overcrowding in farmworker households that are occupied at 7.00 PPD to the average PPD of 3.23 in Monterey County and the average PPD 2.60 in Santa Cruz County A total of 6,351 units of permanent affordable farmworker housing are needed to maintain the present access rate of 7.6 percent of farmworkers to subsidized housing. To accommodate future growth, we extrapolated the Low Income and Very Low-Income housing allocations designated by the Association of Monterey Bay Area Governments (AMBAG) in the Regional Housing Needs Allocation (RHNA) plan and found that:  When the present access rate of 7.6 percent applied to the RHNA allocation of 2,438 units of future need for the study are, we calculated that 177 units will need to be accessed by farmworkers to maintain the current rate of access. To calculate the housing gap, we surveyed the existing affordable farmworker housing stock and compared it with the results of the demand model as follows:  Adding 6,351 of current demand and 177 units of future demand yields an overall demand for affordable farmworker housing of 6,528 units.  Accounting for 1,244 units currently in the regional inventory the housing gap for affordable farmworker housing was found to be 5,284 units. Determining the capacity of the regional development organizations (nonprofit, for-profit, and housing authorities) to address the housing gap for affordable farmworker housing we found that:   An assessment of the regional development organizations, currently active in the region, structure, development experience, units under management, staffing, and budget reveal that there is the knowledge and expertise to address the housing gap for affordable farmworker housing, However, projecting the number of units that these organizations, and others, can reasonably develop over the next ten years based on historical rates of development and in anticipation of increased funding and reduction of development barriers we calculated that an additional 930 units could possibly be constructed far short of the 5,284 units necessary. The non-profit, for-profit, and housing authorities examined all possess the experience, flexibility, and expertise to continue to build affordable housing units for farmworkers. However, project feasibility is constrained by adequate availability of land, cost of land, cost of construction, funding resources, and governmental regulations. The ability to address the housing gap is not solely dependent upon the capacity of the local organizations but required significant improvement in the conditions that restrict the development of affordable housing. Two primary housing funding programs in California4 require – through threshold project eligibility and scoring incentives – that project sites are within strict proximities to specific resources. Project sites meeting these proximity requirements are considered ‘high-amenity’ and are ultimately most competitive for these funding programs. Using spatial analysis, high amenity parcels within the study area have been identified. Zoning data was overlaid with identified high amenity parcels to determine the extent that these sites are appropriately zoned for affordable housing development. Using this process, this is a summary of key findings presented and discussed here: 4 Low Income Housing Tax Credits and Affordable Housing Sustainable Communities are current programs that fund affordable housing in California.      Ten communities within the study area qualify as ‘rural’ and are eligible for rural set-asides in LIHTC and AHSC. Of these rural communities, five (5) have sites that are considered to be ‘high amenity’. A total of 2,495 high-amenity parcels have been identified within the study area. Of the 1,976 high amenity parcels within the Cities of Watsonville, Salinas, and Castroville, only 13 parcels are currently zoned appropriately for multi-family housing development. Of the 349 high-amenity parcels in Salinas, none are sufficiently zoned for multi-family housing development. Although there are numerous parcels that meet program proximity requirements and that qualify for rural set-asides, the vast majority of these are not currently identified and targeted for multi-family development, and the sites zoned for multi-family development will not be competitive under these primary funding programs because of their lack of resources. The study area is well-situated to increase the number of high amenity parcels with the requisite zoning by:  Examining existing land use and zoning policies and aligning them with the Tax Credit Allocation Committee (TCAC) and AHSC proximity requirements.  Increasing collaboration amongst affordable housing developers and municipalities to identify specific parcels that are high amenity or close to high amenity and examine the opportunities to reduce development barriers or increase amenities.  Focusing transit investment in rural communities to increase the number of high amenity parcels and increase the competitiveness of sites within these communities.  Including the consideration of TCAC and AHSC proximity requirements in the region’s comprehensive and integrated planning processes. We were also able to identify specific land use barriers and suggest land use reforms, shown in the table below. Land Use Barriers Land Use Reforms Recommendation #1: Promote Smaller Units Flat developer impact fees charged per  Encourage smaller, less expensive units unit, which encourages larger units. affordable to farmworkers by charging fees per square foot not per unit. Recommendation #2: Reduce, Defer, or Waive Residential Development Impact Fees High developer Impact fees paid at  For year-round, permanent rental housing for multiple, speculative stages in development farmworkers, reduce and defer or waive process, which increases costs. impact fees. When deferring, implement State law requiring deferral at least until issuance of Certificate of Occupancy upon developer request or preferably full term of affordability, typically 55 years or more. Seasonal, migrant housing treated like  Reduce or eliminate fees that make little conventional rental housing in terms of sense for housing where occupancy by single school, traffic, and other impact fees. adults is strictly enforced, residents will be less likely to need public services year-round, and employer provides bus or vanpool services to farms in lieu of private vehicles. Recommendation #3: Enhance Density Bonuses Nearly all localities in region have adopted  Adopt enhanced or super-density bonus with State density bonus requirements but densities and other land use concessions for bonus not enough to encourage private farmworker housing above and beyond what developers to include affordable units. is required in State law. Recommendation #4: Reduce Parking Requirements Most parking ordinances for multifamily  Reduce parking requirements to 1.5 spaces housing require 2 spaces per unit plus per unit or less for farmworker housing space for visitors, which limit number of where alternative transport to farm options units and encourage larger, more expensive are available, especially for single units. unaccompanied worker housing. Recommendation #5: Enable Mixed-Use Development Mixed-use development in unincorporated  Reduce amount of commercial space and county areas requires higher percentages of increase residential space for conversions of commercial space than can be supported. underutilized commercial property and mixed-used development for farmworkers. Underlying zoning in cities and  Amend General Plans and zoning codes to unincorporated county areas limits ability to permit migrant housing in ‘Dual Land Use’ convert existing under-utilized or unused zones, identify and map parcels qualifying as non-residential spaces to temporary Dual Land Use zones and update Zoning housing for seasonal migrant workers. Ordinance Maps, and enumerate and update specific standards for seasonal agricultural employee housing in Municipal Code. Recommendation #6: Support Accessory Dwelling Units Use of Accessory Dwelling Units (ADUs) has  Greatly reduce ADU impact and service fees, not been maximized because of high reduce parking standards pursuant to State impact and sewer/water connection fees, law, disseminate public information, and parking requirements, and lack of funding encourage lender products for ADU new and public education. construction and rehabilitation. Recommendation # 7: Zone for Higher Density, Optimize Height Limits Restrictive and outdated zoning  Height limits up to 5 residential stories designations limit residential densities and above 2 commercial stories in some height, especially in urban cores and urbanized areas. corridors.  Reduction of upper-story setbacks in core urban areas to increase Floor-Area-Ratios.  Removal of units-per-acre density limits and substitution of height, FAR, parking limits to encourage smaller units.  Outside core urban areas, allow residential/ commercial uses on street-level, ground floor.  Allow medium- to large-sized employee housing on city sites that look like and are convertible to multifamily rental projects.  Reduce minimum net land area per unit requirements and set minimum square footage per unit requirements to promote smaller units. Recommendation #8: Relax Restrictions on Agricultural Use of Land Limited sites for residential development in  Incentivize growers with marginal cities, but agriculturally-zoned areas in agricultural land contiguous to and unincorporated county areas tightly restrict surrounded by urban uses to dedicate, off-farm residential development. discount, or lease land for agricultural employee housing, including no-cost release from Williamson Act contracts.  Enable property owners with contiguous sites appropriate for farmworker housing to parcellate the land or create new lot lines to accommodate larger, more economically feasible farmworker housing projects.  Where annexation is not possible, execute joint powers agreement between city and county to enable larger projects to be built on sites that straddle jurisdictional borders. Entitlement and design review of proposed  Adopt strategy from Ventura County of prefarmworker housing projects in approved plans and modified developmentagriculturally-zoned areas can take a year by-right for farmworker housing on parcels or more. meeting certain site and zoning criteria in unincorporated areas, including dormitorystyle, modular, and multifamily prototypes.  Accelerate annexation process in cases where proposed farmworker housing site is adjacent to city with infrastructure and amenities and housing is highest and best use of land.  Delink small farmworker housing sites from master-planned areas requiring specific plan that could take major years to complete. Recommendation #9: Prioritize and Streamline Administrative Processing of Farmworker Housing Lack of local government staff knowledge,  Designate point-person or ombudsperson layers of discretionary and redundant staff responsible for shepherding farmworker reviews, bureaucratic bottlenecks, and lack housing project applications and advocating of outreach and communication frustrate for them. project applicants and slow down  Streamline and eliminate any unnecessary processing, thereby, increasing carrying discretionary reviews that cause costly costs and jeopardizing subsidy delays and discourage applicants. commitments from non-local sources.  Eliminate unnecessary discretionary reviews and allow fast-track development-by-right on multifamily zoned parcels for year-round, permanent farmworker housing projects meeting underlying zoning requirements.  Develop comprehensive Farmworker Housing Guidebook explaining applications and applicant information needed at each processing stage and timelines.  Develop pre-approved farmworker housing plan templates for priority processing.  Conduct on-site visits during review period.  Update website materials and information, such as zoning maps, and prepare and post maps of parcels identified for farmworker housing in Housing Elements, General Plans, and other plans.  Deliver outreach and education workshops to stakeholders and public so that applicants better understand regulations and mandatory processes.  Expand training of city and county staff about State and local land use laws and regulations and foster can-do collaborative mindset. Recommendation #10: Assert Local Authority over Coastal Zone Approvals Coastal Commission wields enormous  Update local coastal plans to reduce power power in denying affordable housing of Coastal Commission, within limits set by proposals in coastal zones. California Coastal Act, and allow greater approval authority by county governments. Solutions This research found that the estimated number of unique individual workers employed in agriculture in the region during 2016 was 91,433. It is clear from the primary data collected in the survey phases of this study that farmworker housing in the Salinas Pajaro Laborshed needs to be drastically increased. Farmworker housing in the region is severely crowded with a mean of 2.3 people per room.5 The average number of people per dwelling in the farmworker population is 7, more than double the average 3.23 people per dwelling in Monterey County and 2.6 in Santa Cruz County. In assessing the needs based on the data from our survey, an astounding 47,937 additional units of farmworker housing are needed to alleviate critical overcrowding in farmworker households to the average number of people per dwelling in Monterey and Santa Cruz Counties. While it is likely that had an adequate amount of subsidized housing been available the access rate would have been higher, our survey determined that 7.6% of 5 People per room measurements include all rooms in a dwelling with the exception of kitchens and bathrooms. farmworkers access subsidized housing. Maintaining that access rate, a total of 6,351 units of permanent affordable subsidized farmworker housing are needed. There have been strides forward in the State of California for funding low income housing and specifically housing for farmworkers. However, the demand will not be met with current funding programs even though housing developers have the capacity to grow with the demand. Many alternative funding models and housing development models are presented in this research report. Many of them will work and benefit the Salinas Pajaro Laborshed. We suggest that municipalities are well-situated to increase the number of high amenity parcels for State funding programs by:  Examining existing land use and zoning policies and aligning them with the TCAC and AHSC proximity requirements.  Increasing collaboration amongst affordable housing developers and municipalities to identify specific parcels that are high amenity or close to high amenity and examine the opportunities to reduce development barriers or increase amenities.  Focusing transit investment in rural communities and propose project specific services to increase the number of high amenity parcels and increase the competitiveness of sites within these communities.  Continue to include the consideration of TCAC and AHSC proximity requirements in the region’s comprehensive and integrated planning processes, such as AMBAG’s 2040 Sustainable Communities Strategy. This report concludes that the Salinas Pajaro Laborshed is well-positioned to:  Make the most of available resources through transit-oriented development in both urban and rural areas to provide housing and transportation resources to farmworkers in the region.  To effectively prepare for the development of affordable housing for farmworkers, the region should continue a concerted effort to increase collaboration amongst affordable housing developers, municipalities, and employers.  Increase the number of parcels that meet the proximity requirements for tax credit projects by implementing proposed transit investments in Very-Low Income and Low-Income areas of the region.  Leverage existing and contemplated comprehensive and integrated planning processes by incorporating proposed transit investments into competitive transit-oriented developments via the competitive funding process of the Affordable Housing and Sustainable Communities program. RECOMMENDATIONS Farm Worker Housing Best Practices Recommendation #1: Based on an analysis of best-practice farm worker housing projects in California, foster a mix of different housing prototypes for year-round, permanent and seasonal, migrant housing in the Salinas Pajaro Laborshed and surrounding region. Recommendation #2: Promote alternative farm worker housing tenure and development prototypes that have worked in the Monterey Bay Region and other parts of California and the nation. Recommendation #3: With new State funding resources on the horizon that will replenish existing State programs, including funding from SB 2, the Building Homes and Jobs Act, and possible funding from voter approval of SB 3, the Veterans and Affordable Housing Bond Act of 2018, proactively seek and leverage State funds with federal government, local government, and non-governmental funds to increase the inventory of farm worker housing. Recommendation #4: To capitalize regional and local housing trust funds for the construction, rehabilitation, acquisition and rehabilitation, and operation of farm worker housing, local authorities should consider the following creative approaches to generation of local revenue sources: Recommendation #5: Make changes in local zoning and land use approvals recommended by the Monterey Bay Economic Partnership to reduce development costs, increase supply, and provide more affordable housing options in the private housing market. Recommendation #6: For farm worker housing, in addition to the housing market reforms listed above, make zoning and land use reforms. Recommendation #7: Make changes to relax limitations on the residential use of agriculturally-zoned land in unincorporated county areas that tightly restrict off-farm residential development. Recommendation #8: Prioritize and streamline administrative processing of farm worker housing by making specific procedural changes. Recommendation #9: Update local coastal plans to reduce power of California Coastal Commission, within limits set by the California Coastal Act, and authorize greater approval authority by county governments. Recommendation #10: Update, strengthen, and adopt additional, innovative zoning and land use powers already codified or under consideration in some Monterey Bay Region jurisdictions and in other jurisdictions in California and the nation.