Health, Housing & Human Services Committee - Regular Meeting

And we're ready. Right? Yeah. Alright. We will go ahead and call this meeting on order. It's 06:00 here. Secretary, could you please call the roll?

Peter Syed. Gilbert Ramos.

Present.

Sandy Austin. Robert Chakanabka.

Present.

Barriolio Fabian Zamudio. Present. Barry Swanson. Present. Mitch Winnick. Eric Palmer? Present.

Perfect.

We will go to public comment on nonagendized items. Is there any public comments? No. Nothing that's submitted.

And then we do have an agenda correction. On the agenda, the consent items are items one, two, three. It's items four, five four and five are supposed to be scheduled items. So when when you consider the consent agenda, it's just the first three items.

Any opposition to that?

So moved.

We're good. Okay. Now moving to the consent agenda. Would any of the commissioners commissioners like to pull an item from the consent calendar for discussion or a separate vote? Seeing none. No public. So, we will go ahead and call for the vote.

Do I

need to do more? I guess not because we're all present in the room. Second. You need a second. I'll second it.

Moved, seconded. And all those in favor, say aye.

Aye. Aye. K.

Now going to scheduled matters in the item four.

Who's the person then?

I'll go ahead and be that. The scheduled matters.

Alright. So I do wanna preface this. Both of these items are intertwined with various other things that are going on. On Monday, the cat the board of supervisors held housing human services homelessness and human services committee met and did consider both of these items. Because of the timing, I couldn't incorporate their comments in here, but I will deliver them as part of the staff presentation.

And then there's another item that's gone through, which is the home program. So this first item has to do with the inclusionary housing ordinance and the update. We are in the process of trying to update it before in the seventh year. And everything in the report kinda went out the window on Monday based on direction from the board of supervisors. They are they have directed me to do another they want me to do a one on ones with them to get individual board of supervisors feedback on what they think the ordinance should do, how we will evaluate its effectiveness, and how we we should redesign it if necessary.

So I've been working very diligently the last couple days on how do I accomplish that? How do I create the questionnaire that's gonna get them there? Over the last year, I have worked very hard to educate them on the the what the ordinance has done in the past and some of what other ordinances have done, but they want me to go back out and and do one on one. There are a few things that are gonna be very, challenging. The county, when it prepared its draft six cycle housing elements, we assume that the inclusionary housing ordinance will be at 20% affordability.

That may not be financially viable. The one of the big tests that we're gonna have to meet is whether or not the ordinance is a constraint on the production of housing in general for all affordability levels. And so we may have to adjust downward so that we're no longer at 20%, maybe down to 15 or even 10. K? And so the it it's a question of what's the most appropriate balance.

Now the other the other thing is under state law, inclusionary housing ordinances cannot require more than 15% of a project to be affordable to what are called lower income households, very low and low. So we're not quite there yet under our organs. We're at six six eight, so we have some room to go up at the very low end.

You're saying 15 each

for the Total. Total. Combined.

For the very low and low? Yeah. Okay.

So there's obviously a huge disconnect when, you know, what is it? 1,770 of our 3,300 units that we have to plan for are low and very low under the six cycle arena. So there's a disconnect between what's achievable with the ordinance what we have to plan for. So we have a a very small tool in the ordinance to compel people to give us units, but we have a much bigger need to figure out how to subsidize those units. And that's really what this comes down to is how do we come up with a subsidy.

So if you're meeting with the with the supervisors one on

one Yeah.

Mhmm. You know, our area is vastly different. Mhmm. South County and North County and, you know, the Carmel Valley. Right. We're talking very different areas.

Yeah. And that and that's one of the challenges is is crafting something that works countywide. Yeah. That's gonna be And one of the things that does kind of work is we try to set the the inclusionary and lieu fees specific to the county planning areas. So we use what's called an affordability gap. So if you're building a home in Carmel Highlands or Big Sur, it's gonna be about 5 and a half million dollars. Mhmm. K? A moderate income household, I don't remember the numbers exactly. They're all in the staff report.

They're in that KMA report. Mhmm. May be able to support, you know, a $450,000 purchase price. Well, the difference between that 5 and that 4 and a half is the affordability gap. And then what we do is we say, if you're gonna build a five unit subdivision, you're gonna take that 4 and a half million dollar gap and divide it across all four. That's how we subsidize the affordable unit that we would build in Big Sur. Moving to South County, that affordability gap may only be a $100,000.

Right. It's gonna be a big difference.

So we would collect a different amount based on where the project is. That's one way we do try to be sensitive to the differences in the county. The challenge is is we really need the affordable units over on the in the Peninsula. Right. We're collecting South County fees and then trying to turn them into units of Elba Peninsula is gonna be a little harder to do. Gonna happen. But that's what we need to start thinking about. How do we how do we get there?

What's our relationships with the cities, like Marina and Seaside and New York, King City, incorporated areas?

Everybody is kind of in a silo right now.

I I think that's something that I had note noted. And and when we're looking at inclusionary Mhmm. Housing requirements, I mean, city by city, they're all different. Mhmm. Right?

Right.

This it's just and I I understand. Like, regionally, you're you're not gonna have you know, it's not gonna be the same thing on the coast as in, yeah, South County. But, I mean, it also seems like it's a patchwork even within South County. Are they not all I mean, they have different requirements.

Yeah. Well, then the the biggest challenge for from what I've seen isn't the patchwork nature. It's that very few of the cities have large scale projects that can subsidize affordable housing in the immediate pipeline. If you go back to East Garrison, you know, that was 1,400 units, 214 acres that the county owned. And the the beauty that of that one was they had a critical mass of affordable units that they had to build.

They also had land that they could dedicate to. They could then flip that land to Chispa

Right.

To go out and do tax credit financing to build the units and manage the units. And what it ended up doing is Chispa and Mid Peninsula Housing financed about $70,000,000 build a 132 units. And so the affordable housing obligation ended up not costing the developer anything. K. So we got the units.

And they got the profits.

Well, it's supposed to be a profit sharing if they ever get there. Okay. They have a 21.5% internal rate of return, so it's very high that before the county and they start splitting profits.

21%.

21%. 21 and a half. But, you know, that's the beauty of if you look at, like, Soledad, which has had a had a very good result with its inclusionary housing program. Even the city of Salinas' include affordable housing largely came about because of large scale subdivisions, Creek Bridge, Montebello

Right.

Things like that that had the ability to spin off. Here's five acres, Chispa. You build my affordable housing. Projects in the unincorporated area, by and large, don't have that capacity. We're we're not looking at at projects that can spin off of of five acres that have sewer and water. That's that's the other big thing in the unincorporated area.

Right. That's Greenville. It's a good example.

Right. So, you know, having having the Salinas growth future growth areas is great. How do we get them to accelerate their their plans and development and annex those into the city so that they can be built and trigger the city's inclusionary housing requirement and get stuff going vertical. I don't know. But that's that's one of the realities of of what we've seen in this county over the last forty four years is most of our 53% of our projects, I think, are lessee four lots.

Wow.

And so there's just not a lot of capacity to build or even finance affordable housing. Right. So one of the questions that keeps coming up from the board is, well, how do we get those larger subdivisions? How do we get affordable by design? Inclusionary housing ordinance is a tax. It it's not something that's going to dictate how somebody develops their property. It's only going to say, as a consequence of doing so, you have to either you have to pay some amount

Right.

Whether it's giving me affordable units or paying a fee. And so that that's one of the the challenges is is there's facets to affordable housing and inclusionary housing fills a very small, very specific niche. And one of the things I have to get from the board is what niche do they want to fill? And so if you have thoughts as to what niche that might be

Well, that also also has to include infrastructure, water and sewage Mhmm. Highways. Because we're currently you know, Monterey County's highway system is just it's at it's overloaded. Yeah. I mean, out where I live on G 12 Mhmm. That's you know, I'm gonna give Glenn a little bit of flack. That's gonna become the Glang Church Expressway. It's just ridiculous. Mhmm. And Highway 60 Eight's another That's a state highway. Yeah. The nonstate highways that the county has, they're just impacted. And they're largely impacted because of what the state has done in the development. San Juan Road, Salinas Road, those overpasses that they built, that's just creating more traffic on those high on the Monterey County highways. Mhmm.

Yeah. And then and then backing up again into sewer and water. I mean, you can only build so much with septic systems and wells Yeah. And wells that have issues with their water quality. Yeah. That's another problem in North Monterey County right now is the water quality's you know, you're dealing with nitrates. Again, the pollution is in the wells.

And you're dealing with that in in South County as well with

San Lucas. San Lucas is a major player there.

And that's a municipal water system. That's not even a private utility sys water system. Right. So, you know, the other thing that we've heard loud and clear from our consultants today is if we impose inclusionary housing ordinance on development of multifamily rental properties

Mhmm.

It will constrain the construction of housing.

So we're damned if we do and damned if we don't.

We just we can only cover, owner occupied. And I heard the same thing today from Cath Catherine Avalo of Avalo Construction. Right now, the the cost to build multifamily, you just can't make a return in a reasonable amount of time.

How do we subsidize that so we can make a return? So we put people in coops So coming together to build this kind of housing that's affordable.

So self help is a model.

Yeah. Self help's good.

And that's for owner occupied, but we need a source of capital. K?

So are there grants available? Is there federal funding that's available? It's very competitive.

Right right now, there isn't, but, we'll have to see what future budget cycles hold for the feds. Mhmm. But the, the the big one right now is USDA rural development does have money for self help. And the CHISPA and and people self help out of San Luis Obispo County will put that together usually with something from the affordable housing bank out of the Federal Reserve Bank in San Francisco. Mhmm.

And then we'll come in with home dollars to help with some of the because there's always gonna be cash involved, closing costs, and things like that. And then you get income qualified. You get to build your own home, and you own it at the end of the day. And we use the USDA and affordable AHV funding to buy the materials, supplies, land, do all that. Mhmm. But they're competitive. You know? So you have to

So if we turn to the private market, let's say you look at what we did over in San Joaquin Valley over there by what is it? Below Stockton. They call it the River River Islands. Oh. They they built over there. Okay. It's massive.

I'm not sure which one it is.

It's owned by French camp.

Okay. I haven't been on 99 in a while.

It's on the it's on the 5 side.

It's on the oh, Mountain House.

No. It's called River Islands, I think it's called.

Yeah. I think that's part of Mountain House. Mountain House was a huge subdivision approved in the early mid nineties Right. By San Joaquin County. Right. And I think it was for, like, 30,000 units over twenty five or thirty years. Yeah.

No. It's come to fruition. It's been built.

You know,

I talked to Glenn about that if we did something like in South County. You know, the no. How do people get to work? Right. They're impacting the highways going into the Bay Area.

Right. You know, and Mountain House was kinda that sweet spot because it was right there at the base of, coming off Altom Pass. Right. 205. Get into, into the Bay Area Right. You know, a little more catch part in San Francisco, stuff like that.

Right.

I'm not sure we have those kind of opportunities here.

But we don't because we haven't built any infrastructure to to deal with that, like a rail system that actually works.

Right.

We can't even get a you know, they can't even put a portable rail station in Watsonville. You know? I tore the station down. Mhmm.

So the, but, again, the inclusionary housing can only fill a very small niche.

Right.

And so that's what I have to go back, and the board want the the committee wants me to talk to all five members individually and get their views and then come back and report on what I have found, and, hopefully, they can give me some direction.

And would that be on the, like, recommending a decrease?

It could include that. Yeah. The staff's recommendation, after after I put this together was that we do 8% very low, 7% low, and 5% moderate. And so that we really maximize the very low income requirements on that gets us to the maximum very lower income production. It also would trigger allow developers to take advantage of the density bonus if they wanted to.

So I'm trying to trying to give them a a carrot there, and very low income is our also our greatest agreement requirement. So that was kind of our thinking, but board wants us to go back and do some more work. So that's what I'm trying

to do.

But what I'm looking for from the committee tonight is guidance on what you what you think the ordinance should do, what role what Mitch should might build for you. At some point, I will put the survey. I the survey will go live, and I will make it available for you to actually respond formally to. But that's the staff report on this item for right now. It's kinda discouraging because I've been working on it for seven years. I didn't intend for it to be my. Yeah.

Comments, questions? I think I've made enough comments, but it's been This

is part of the of your input. It it includes reducing the percentage of affordable housing from 20 to 15 and then increasing the number of units and development that triggers affordable housing from five to seven. Those two examples of

How we knew exactly. Yeah.

Is there anything else, like, specifically that

Not right now. Everything's kinda back on the table. We came up with a seven when we looked at what was required across the Central Coast. And so it made sense. Free is is really, deep, and there's not a lot of capacity at that end of the scale.

I also look at what it does for the staff work. There's a big decrease in return on investment. And going to 15%, we thought about because it it might make the the ordinance less onerous on the development community. Because we we have we do know that, you know, like, in that case of Big Sur, they just flat out told us that's that's gonna kill Delta. That's that's too big an affordability gap.

Sorry. This is a dumb question. Are are is Big Sur required to build over there, or is that just part of the unincorporated?

No. So, anywhere the unincorporated area, the ordinance applies to the entire unincorporated area. Generally, we require if you have to do affordable units, inclusionary housing, it needs to be ideally integrated into your project. If you're gonna do it off-site, it needs to be in the planning area. Okay. So that's that's the kind of the way we we want it to go. We really don't wanna see big serve builder, inclusionary units, slowness. Yeah. So that Seth?

Yeah. I think so.

Okay. And one of the things that's not reflected in there is that the vast majority of our inclusionary units are in in this Greater Salinas area or North County.

In North County. Yeah. And

is is there a table here that lists what each

city requires? Yeah. There was. In

I think it was

Attachment a. It might be page 44 or 45. 45.

I think

that's why I also when I was taking a look at the the current staff report was and and I saw the seven. Mhmm. I think I was that's also where I got surprised because I I was looking and and then, yeah, going to the 15, I I see that there's 12 somewhere in here. Fifteen, eighteen. Yeah.

Well, the seven was the statewide average. So just up above, you'll see the seven.

Oh, okay. So then is that where we left or or is that where the thought process was for

the seven? That was where the that's where the thought process came from. It's kinda that's kind of what happened is is going on around the state.

That has very different parts of the state have to be a lot different.

They are.

Because you get way up north. It's gotta be a lot different.

Actually, once I got up Northern California, I don't think I found a whole lot.

Yeah. I would.

Yeah. There's only 10 programs up there, and I don't remember where they were.

But at this point, everything's back on the table.

Yes. Everything's back on the table.

Also, in the staff report, there was a a deadline for I believe it was gonna be next. Yeah. That's supervisor meeting.

Yeah. I'm not gonna be able to hit that.

Okay.

So what we're gonna do is the new schedule is, a memo to the full board that gets included in the agenda just saying, here's your update. Because at the June, when we did the when I did the, annual work plan to the board, they said come back by the October, so I'm gonna give them a memo. It just says, we're working on it. Here's what we're doing, and let them know about the survey, and try to get the survey wrapped up by the December so that January 1, I can come up with an amended scope of work for our consultants to package up a, an ordinance and do the loophole analysis, that's required and then get back to the board, with, hopefully, an ordinance they can adopt by the June. Okay.

And the survey is going on just for clarity, it's going out to the committee? It's well,

it's it's primarily for the board of supervisors Okay. For me to sit down one on one and go through it with them. But I think that there is value in approaching the development community and doing the same thing because at the end of the day, if they don't like it, they they will find someplace else to build the housing other than Monterey County. And then I'm I'm gonna probably do some public outreach and just say, you know, here's a SurveyMonkey and and, let everybody in the in the county provide feedback.

So you would include Chispa. You'd include Peoples.

Mhmm. Okay.

Those are key to building affordable housing. So

that's kinda all went out the window. Okay. I thought I had a very Greg, and I thought we had a good plan going in. Just didn't

Is it because they're all on different pages for what they want in each district?

I think part of it is they they are conflating affordable housing in the inclusionary housing ordinance. And we're the ordinance itself is a very small player in that. Tax credits are the big player. Tax credits, USDA for owner occupied self help. Inclusionary housing ordinance is a very small player.

That's and they you know, especially supervisor Church wants to see changes in policy that that really gear try to encourage developers to build smart smart building affordable by design is what I'm.

Although it's affordable by design, there's also, you know, fire. There's other concerns in the county

as well.

But you know? So they they've got all these different ideas about how to approach affordable housing. And every time I get the in front of them, I try to get them to focus on the ordinance, but they throw all of affordable housing. So that's why that's one of my challenges has been we really need to just focus.

I guess when the frustration is we gotta get going on and and spending more time to talk about it is not Yeah.

I it's That's not working.

It's not productive.

No.

It's it's I need to they they I need to just get them to focus on the inclusionary housing ordinance and recognize that at the end of the day, over the sixth cycle, it's probably only gonna result in two to 5% of the RENO obligation for very low and low income units. And you still have, you know, 95% of those units for that affordability band. You have to figure out how you're gonna get to and how do we get industry to come along. It's not this, but this could be a piece of it.

Sure. And for somebody who's new to this, can you can you explain why it's so low?

Because so 65% of the projects in this county are 50 lots or less. 49 unit lots or less. So even at 20%, you're not looking at a whole lot. Okay? And I think when I calculated it, we would need I think it was, like, 65 of those projects over the next over the eight years, but we only have, like, four left or six left. So it's just not at 20% on a bunch of small projects, it doesn't add up. Yeah.

Right.

That's that's the hard part is you're numerically constrained by the type of development that's here.

And there's no profit in it. That's why it's not being done.

There's obviously profit in it because there have been 450 odd projects over forty five years. So there are subdivisions and and projects happening, but they're small because that's where how you make them profitable. Right. Or or it's small landowners. You know, it's not it's not the big property owners that are getting into it. Right.

But that's if they okay.

We have to start somewhere. Right. We're not starting at all.

Right. You

know? And this ordinance is just a small piece of it. So Yeah. Why like, I mean, I could call Wendy tomorrow and talk to her about this. I think it's ridiculous. We need to move.

Yeah. I you know, and step step away from my county role here. Just looking from housing policy perspective, we need a source of local funding to subsidize affordable housing. We need to be able to go out and buy land where we want affordable housing so that we control how that land gets developed.

I had that discussion with you.

And I see the inclusionary ordinance as an opportunity to collect in lieu fees that we could do that with. That comes at the cost of

increasing price of No.

Because you you have an inclusionary if you have an inclusionary ordinance, you're gonna pay a price to build the unit and sell it at a reduced rate, at a reduced profit, or you're gonna pay a fee. You're still being taxed on it. It's just how you pay the tax.

Yeah. For the developer.

For the developer. Right.

And is that why they're choosing to do smaller or or less units on a lot?

No. I don't think so. I I I think Maybe

I I missed the I I you had mentioned earlier that it's more profitable, or someone had mentioned earlier No.

So so I I think that I think that the the four units or divisions are more profitable and because, one, this the amount of land and how much you can sell them as opposed to if I cut those lots and if I cut those 40 acre lots into 20 acres is and started really cutting down my ranchettes because that's what we see a lot of.

North Counties. Yeah.

You know? So that's the challenge is how do you and I'm also not sure how much land these individual landowners control. You know? So if what they have is a a 100 acres and they're not near sewer and water.

Right.

It makes sense to say, I'm just gonna do 25 four twenty five acre ranchettes. There there's a whole psychology that I don't understand and I haven't researched behind what drives people to to develop their properties the way they do. I I know that one of the frustrating things is there's that big nice big parcel over there at Reservation in 68. They have come in twice that I know of with development proposals, and neither of them have done they haven't done anything. They, you know, they wanna build employee housing or employer sponsored housing for all for the full spectrum of the people that work for them.

They

haven't done anything.

And so to me, one of the questions is why? But that's a separate discussion. You know, that that would be separate from I we really just need to focus on the inclusionary housing ordinance. I need to get that over the finish line and know where it fits in so that we can work on designing the rest of our affordable housing program. And is there

a deadline that you've already you've already missed a deadline. Right?

I've missed several, and I'm getting really frustrated.

I I bet.

You know? So, yeah, what I'm gonna be doing, if you wanna talk to your well, Wendy knows that she's the one who gave you the direction. But let them know that, you know, we're coming out. We want and we're gonna be looking staff is gonna be looking for clear guidance on what they want out of the inclusionary housing ordinance. Okay. And when how they see it being successful.

Okay.

And what does success look like for?

Yeah. That's gonna vary depending on the locations that's in the county.

I'm not sure it will. I I think that success they're gonna have to define it, but I I Is

it because you think they're looking for more? They think that's not enough, or they wanna let I don't know what

They want more affordable housing. Yeah.

Right.

They want they want more affordable housing. But but

But we wanna get what we can get.

Well and and you can only get so much out of this. Yeah. You know? Because the state has adopted laws limiting their their scope. So

So if

we wait too long, do we lose money? If we wait too long, are we losing money?

No. Limiting the scope of inclusionary Yeah.

Yeah. So, like, the the 15% cap on how much of a project can be set aside for a very low and and low income households.

You

know? If they hadn't done that, you know, you you could conceivably say 20 or 25.

But Which it makes it but it

But it makes it really expensive for the developer. Right.

And so There's a lot of play.

Yeah. There's a lot of play, and and I have been in the weeds on it so long that it's all kinda killing

me. Only seven years.

Okay. That's So longer than that.

Any other

And a problem too. Longer you wait. Economy changes, things change.

Right. You're you're Yeah.

Yeah. Yeah. Cost going

building cost.

Just like just like people at home aren't making big decisions on buying a car, moving, or Yeah. Changing jobs. Right. Could be similar to developers.

Building out. Yeah.

I guess, yeah, this is a really political question and, you know, it yeah. What the numbers should be is and is the feedback coming from the developers who obviously are gonna want higher minimum project size and

lower Yeah. It's like lower for Lower for. Yeah.

Yeah. First yeah. And and will they actually do it if that happens to

You you touched earlier on a good point about building employee housing. Mhmm. I think I've asked in the past. Is the county of Monterey have employee housing for its workers?

No. So this that's an interesting question because we have talked about it.

Okay.

The the hard part is how do we take tax dollars and redirect them to providing housing for county employees where it's not a gift to public funds if we're subsidizing it?

The same way the school district does it.

I guess teachers are Moderated that. But maybe voters are more apt to

See, that's the thing is we would have some teachers. Have to we would probably need revenue stream to do that. I was just

Well, it was

The city of Salinas has 50 units in this new building over here on on Abbott Mhmm. That they bought, cost them $23,000,000. They're only getting $900,000 a year in rent.

But after five years, it goes back to market rate.

For the for the tenant? Yes. But they their hope is that people will

move out at the end of

that five year lease.

Good luck. I mean, it probably will when it goes up.

Where are gonna move to?

Yeah. Where are they gonna move?

That's Right.

You know, have that income's 22.

But they they had to they did what's called a certificate of participation by it. And so that was one of the things that that was interesting is is to make something like that work, we actually need the private sector to go out and build it so that we can go in and buy it because it cuts the cost by, you know, about 30%. We do it that way.

Oh,

okay. Then if we built it ourselves. Because when you use public funds to build something, you have to pay prevailing wage to take this bacon. Yeah. So, you know, so so if you're if if you are a labor advocate, you obviously don't wanna do that because it it cuts pay for your work through your your constituency. But at the same time, if your laborer makes too much to live in

an affordable unit You see where capitalism doesn't work?

Yeah. Yeah. Sorry.

What the market do what the market does, and this is where we're at.

So Yeah. Is it there's there's a whole bunch of stuff that's going on. It's interesting how you finance how you can finance how challenging it it is to finance for for public sector employers, especially to to build employer sponsored housing.

Yeah.

I do know that Rancho Kenyatta has an obligation to give produce affordable housing. We've already got our signed agreement. And one of the things that they had talked about is could we sell the affordable housing to Bernard's Watch to use as employer sponsored housing? And as long as it's income restricted, we're fine with it.

Oh, okay. I'm fine with that.

You know? It it creates housing for families that live and work in that area.

I agree.

I don't know what they what they're ending up gonna end up doing. I know that it was discussed. And I think that, you know, having these smaller developers partner with employers to subsidize construction costs in return for units makes sense.

In my opinion, Amazon should be building a house.

Yeah. I agree.

And when I hear people say, well, they can't do that. They can't afford it. Sorry. They can't.

If you can if you can buy Venice for the weekend for your wedding,

you can't. You can build housing. You shouldn't have been here without that.

Right. You're right. Absolutely right. Great. Not only housing, they should also build the infrastructure for transportation. Yes. Now the rail system is is should be updated and and put into force.

Oh, goodness.

We gotta look something for

thirty years dry, and we're gonna get nothing back from them.

I feel.

And look thirty years in the future for travel on this coast. We can't continue to continue the path we're on.

We can't have nice things.

Any any other questions, comments on this agenda item?

Sorry. Are we just kinda receiving

this? Yeah.

Just receiving it for right now. It's

You don't need to vote on it.

No. But, again, if you have When do you

when do you wanna wrap this up? Like, yesterday. Right?

So we So what I will do what I my plan, like I said, is I wanna have the survey done here within the next three or four to five days and start scheduling meeting with the supervisors, I wanna have if I can get it out to the public, I wanna have it out through January 1

Okay.

So that I can I I need to get this moving?

And we receive a copy of the not the completed surveys, but just the survey so we have an idea of what what questions are being asked or

They want us to meet with you when you meet with our supervisors?

If you'd like to be there. Yeah.

Okay. I think you may need to check-in with your supervisor.

Oh, yeah. I'm definitely gonna do it.

Yeah. So when I schedule with them, if you let them know that you're interested in in being there

I will.

They can invite you. I'm not gonna do that for you. I can't. Can't do that presumptuous.

I'll do that.

Yeah. My. Thanks.

Alright. Thank you for that. Now we are moving on to agenda item five.

So Ken's Court. It's a 19 unit affordable housing project owned by the county that we're never supposed to be. Two bedroom out there currently rents for $951 a month. Three bedroom is 1,089. K? Some of these tenants have been there for twenty years. I don't

blame them. Sounds great. Not have when it's lunch. Oh, yeah.

Well, they're they're all elements of. So none of the interiors none of the interiors were damaged in in the last flood. We did spend a bunch of money on the soil because of all the black water that came in down. Yeah.

And

we don't have a good rent increase policy. So there's a b fourteen ninety two, which limits the maximum rent increase to CPI plus, I think, it's three or 4%, maybe five. Five. Five. Thank you.

So in this case, that means that for this year, rent could go up by 7.7%. There is an exception in a d 14 eighty eighty two that allows, include affordable units subject to an affordable deed restriction to have greater rent increases if necessary. Because there is another thing that in state law in the health safety code that sets maximum housing cost maximum affordable housing cost at 30% of monthly income. And that would be rent plus utilities. We haven't done anything like that.

So we have a deep restricted portable project where we have some tenants that are paying 89% of their monthly income for housing costs, which is not supposed to happen under state law. But we also have some folks that are paying 12% because of different incomes. We have some household we have a household out there that's a 180 plus percent AMI. This is another one that got blown up on Monday by the subcommittee. They want me to come back with more of an analysis of what the the differential is between, what, going to 30% of AMI or of income versus the a b fourteen eighty two increase.

And a b fourteen eighty two only gives us, like, $80 a unit. It's it's still far below market rate, and it is still not tied to the household income. So the poor folks that are making

But

they're already paying 89% are going to pay 90%. You know? And to me, that's not the the intent. And so what I recommended is that we make it consistent with state law regarding maximum the affordable housing cost.

So the county is the landlord?

The county is the property owner and landlord. Yes. We own it.

And so and so the housing authority must have some handle.

No. They do not.

Why not?

Because this was never developed or managed by them. So Kent's Court came about in as a result of the nineteen ninety six flood.

Right. I remember that.

The Kent's Court used to have, from what I understand, like, an old railroad hotel.

Right.

And and it was in a bunch of different ownership. Over on Salinas Road, there was an old motor port that was we have boxes of code enforcement against these two properties. And so the idea was the redevelopment agency purchased Kent's Court, except for two properties, did environmental remediation, worked with South County Housing to buy the motor court on Salinas Road because there were tenants there that had relocation issues. So the county lent Salinas led South County Housing money to buy 19 manufactured homes

Mhmm.

To locate on Kent's Court.

Court. Right.

People that were living at Salinas Road moved over there. We built Nuevo Monocer. Most of them moved back, but we still had folks living in Kent's Court. And it just never it it was not supposed to remain as housing. It was supposed to be

Permanent housing.

It it was not supposed to be permanent housing. It was supposed to be temporary housing so that we could do code enforcement in North County. Because one of the challenges with code enforcement, if you red tag something

You gotta put people.

You gotta put the person the the household someplace, and so Pennsport was supposed to be that place. And we will collect rent from whoever owned the red tag property while they brought the property up to standard. That was the way it was supposed to work. That project never took off, and Kent's Court just became permanent housing with no housing authority involvement. We don't even I don't even think any of our tenants have housing authority section eight vouchers. So we have no subsidized rents out there.

Really? I thought all of Ken's court was subsidized.

It is by the county.

I thought I said your name.

So Wow. On Monday, what the board wanted me to take a closer look at what the increases with the a b fourteen eighty two limits would be and also look at how I could amortize some of those huge rent increases because some of these households are gonna be looking at, you know, almost $3,000 adjustments going on. That's that's not good.

Under this original recommendation.

Right. And so they want me to look at how I can break that down so that it's not such a big hit all at once. Yeah. But and then there's so I have to go back and do some analysis, and I and I'm gonna do that. And, I welcome your thoughts on it.

If you were to go if the county were to pursue fourteen eighty two increases, would it have to go out to everyone? Can they select only individuals who are over the 80 AMI, which was originally, I think, the intent of not having folks?

I think you have an issue of fairness then. I I don't know that you can be selective in how you implement.

Right. Increases.

Yeah. And you can't say to one you pay. You don't. How do get sued?

Yeah. So I income based?

Yeah. So It's not under section eight. It's under housing authority.

It's not under yeah. It's not under

housing authority. So How do you move it into the housing authority? You can't.

So the how the the housing authority no longer has any vouchers available. K? When they have vouchers available, there's two types of vouchers. There are what are called tenant based vouchers where I income qualify, I get the voucher, and then I have to go find a place to live that will accept the voucher. And then there's what's called a project based voucher where Kent's court owns the voucher

Right.

Regardless of who comes in. As long as they're income qualified, they get access to the voucher. Based vouchers are limited to I I don't know the exact percentage, but there's a a percentage of the total vouchers the housing authority receives that they can dedicate to project based. And that is fully subscribed, and they have no more capacity to issue vouchers right now. So we have a I have a challenge in managing this property because I don't make a lot of money on it because the rents are low.

Right. I have people that want me to make improvements at the properties, and I would love to if I had the cash flow because the last thing I want is for somebody to say the county is a slum board.

Right. Of course.

Yeah. I that's that's my greatest view with this is that somebody's gonna go to the board and say, you're running a a you're you're a slumlord. Then they're gonna go, Barry, what'd you do wrong? Mhmm. So I do but I need to generate more income than current rents allow. And I also wanna do it so that it's fair to everybody. And a b fourteen eighty two works great when income tenants aren't income qualified and 10 score your income qualified. At least they were when they moved in. We've now got households that are way over income because we we don't we don't evict people when you make too much. We're supposed to raise your rent.

We haven't done that.

Right. K. So what I'm I have

to this has going on twenty years? Ten, fifteen. Yeah. K.

A lot of things that I that I'm involved in are things that they're not sexy. They they they're not high priority until something goes wrong.

Right.

And I I wanna get us on a pudding where they're in good shape so that they won't go on. So what I need to one one of the things that the board has asked me to do is for the particularly for these folks that are facing big rent increases, How can we spread it over two or three or four years? Yes. So I have to go back and do that analysis. And then, again, by the December, I I want board direction that it's okay for me to implement the rent increase so that starting January 1, we can do it.

But then on the other side of the scale Okay. Folks are paying 71% of their annual income?

Some of them, yeah, some of them some of them are paying 89.

And So they

they actually a part

of the conversation.

They're like We actually we actually have a tenant that Reduce your if if you were yeah. Some people will get rent reductions, especially our our very low and extremely low income households. Extremely low households are gonna see about a $909,100 dollar rent reduction. We actually have one household out there that when I do the 30% and the and the maximum affordable rent, we should be paying them. That's how little money they make. I don't know how they they're still living house, but and we obviously don't wanna displace them. Right.

So you would be an opportunity to turn this into a co op so it becomes owner occupied. The county could finance that because the county is financing it now.

Mhmm. And I and I am looking at that. I am looking at that.

Make it owner occupied. Make it a community that owns it.

I'm looking at that, and I've had a a consultant who that's what they're they do. I forget what they are. But they take manufactured communities and turn them into Right. This one is challenging because we have a property in the middle of Kent's Court that refused to sell, and we have one at the entrance to Kent's Court that refused to sell. So I've got these

Okay. That's that's intimate domain.

That's intimate domain. And you, you know, you often We lost our opportunity.

How how did you lose your opportunity?

When we did the original parcel assembly, that after the ninety six floods, that would have been a good time to do eminent domain. Politically, I don't think the board would go there now because it would displace three households.

Well, we're gonna give them the opportunity to buy into a co op. So it wouldn't necessarily displace them if they wanna play ball.

But they already own their homes. So why would they join a co op?

We would buy them out. You can't.

If they don't want us it's certainly worth the conversation, but I I

Well, I mean, how And how tight is the community? That's that's another question.

Oh, James Court is really tight.

Well, then it shouldn't be a big issue then because they should be playing one play Well wanna wanna help each other out there.

The the 19 county owned units are a tight community.

The other two are not?

Are not. Yeah. It's it's a really weird dynamic. I don't yet.

Wow. The other that sounds like

The other thing I had seen in in the report was the increase in and you're talking about financing and being able to use some of the funding for maintaining the property. Mhmm. Other is that renting, rent collection in the first year would increase by $90,000?

It would. Yeah.

That's the first year.

Right. But Once I get stabilized, it would you know, when we do the income this is because we have had such a long gap. But after the first year, it's gonna stabilize because your income's not gonna go up that much. You're you're not gonna have a a 10 or 15% income change. Oh, and if you do

move out. Right? And then it would be based on their income again, assuming that lower income folks end up moving in. Right. There's potential that it Yeah. Brings it back down. Right.

You know, it's and I see it as an opportunity to possibly you know, if if I spend a little bit of profit off, that can go into the housing trust fund that helps me finance other projects. Right now, it's it's it's treading water. I can't do everything that the board wants me to do to make it prettier. But if with the change in rents, we can address some of some of the beautification. We can also

Who who's doing the maintenance now? The county? County We

we have we contract with all of our property management.

Okay.

And so they they take care of everything.

So we contracted that out?

Yeah. We try to contract the property management out. We're not residential property managers. I don't have a real estate license.

Right. I understand. Yeah. I get that. I'm just talking about, like, like, the maintenance side.

A routine maintenance landscaping. Routine maintenance is handled by Oliver.

And they

There is a a threshold of, like if it's more than $5,000, they have to call us to approve it. But, yeah, they they handle all the all that. We I'm trying to professionalize. Yeah. So, again, you know, this is receiving the report now mostly, but I I am gonna go I am going back and working on how to make this less frightening that first year. Yeah.

That was my main concern and but the idea of it seems reasonable.

When I and I can do a follow-up report for you if you would like that has the analysis of what the 7.7% change, brings and then how I how I end up amortizing some of these bigger ones over three or four years.

So even the folks on the lower end of the scale, they would still get the 7.7? Or No. They'd get the decrease?

They would get the decrease.

Okay. I just wonder.

No. I you know, that's state law for affordable housing projects is very clear. Yeah. We're not managing the property that way. And that and to me, that's what we should be doing.

Yeah. You should have been doing that. Yeah. Yeah.

But because the property was not meant to be permanent housing, we never paid attention.

Twenty years ago and by. Mhmm.

So just so we're all clear, this also is going back to the drawing board. A little bit. Yeah.

A little bit. Yes.

So we're not making a recommendation.

No. So with what I have related to you about what the board subcommittee was, are you supportive of that approach where I where I do the additional analysis so I can demonstrate what the 7% generates. And then also looking at how to amortize some of these big increases over time so that it's not all at once.

Right. Makes sense. Yep.

And what would you know, do you have a thought as to, you know, this this family is making it 180% is gonna see it $2,800. Is that two? Is that three years, four years that I should amortize it over? I mean, that would be something that I would look for guidance from you on.

Stretching it out is better than all at once.

Yeah. But over how much time? How many years?

Years. Four years? Yeah. I would think the better because, like, we don't we we can't ring that window and see where things are going in the economy. See a window where things go over employment.

Yeah. I think if if it is gonna be stretched out, I I like the idea of four or five years. Yeah. Okay.

Yeah. Because you don't you

Those are it's a huge hit

in It's a huge hit.

I mean Yeah.

All I know. Already even hit with, you know, with power power and water and their bills and this now. It's like, those are just going through. They're just going up and up

and up. I know. But I also know that these are 20 years old, and I'm getting to the point where I'm gonna have to do new roofs.

Good. That's why it's reasonable to

Yeah. I

That your residence should

I had my roof lasted thirty years.

These are manufactured homes?

Mine is too. Oh, okay. So I got thirty years out of but that would include

I I got a plan for it.

I didn't make it. I can't get the main Right.

You know, I I have to plan for it. You know?

And do and do all of the tenants I'm reading here that they receive utility allowance credits Yes. And even so it doesn't matter income level. They all get that Right. Allowance. Yeah. So is that something that you're gonna be

looking at too for folks that are making So so the way it works is and I'm just gonna make numbers up. K? Make a $100 a month. I can spend $30.30 dollars on housing costs. My my utility allowance is $35. That means my rent is the balance.

Right. Got it.

Because I can't exceed that 30% from for affordable how for my affordable housing cost. So rent comes second.

So when you do this when you do the roofs Mhmm. And you go down that road, are you gonna look at going into I mean, another county Yeah. Solar projects. Are you looking at doing anything like that?

I have not yet.

Because that may be an offset cost. It'll pay for some of that.

It could.

And not immediate, but down the highway.

Right.

Yeah. So it'll be the opportunity to do that. Yeah. I mean, what? Yeah.

Yeah. It's

I mean, all those solar panels went over in Pruneo where the library is. Yeah. And that's gonna pay for something, but someone did that for some reason. Yeah.

So I'll I'll run it over four years

Yeah.

And tell the tell the board that that was the the hatch recommendation. Recommendation.

You need a vote on that?

It'd be good.

I make a motion that we we we extend the staff recommendation of the staff to mull it over for four years.

Four years. I second that.

Alright. All those in favor? Aye. Aye.

The staff updates and other items. November 7, the City Of Salinas is having a regional housing forum.

Sorry. Do we wanna do committee, our committee comments first? Anybody have any comments? This is an opportunity for HAC members to comment request or refer a matter that is on or not on the agenda.

I guess the thing that I keep in has time is two jobs and everything I'm doing with education. 80% of all of our students are not proficient in math, so I'm trying to figure that one out. I still think, like, Hartnell has their foundation has so much money. So is MPC. I'd like to see these colleges get involved in helping with housing.

Staff housing or student housing? Both.

Student and staff.

I know some of the others see, community colleges have

Cabrillo. Cabrillo is that off.

Yeah. Cabrillo. I know, Gavilan's interested. Yeah.

Gavilan's I know the Cardinal Foundation has lots of money.

No. That would be good.

Yeah. And, I was just I just read an article about Long Beach City has a really good program for homeless students. They have a safe parking lot, and they have pantry and and stuff like that they're set up. It helps that their college president was homeless, though.

MPC doesn't have any any program?

I don't know. We'd have to No. I don't think so.

Probably do the water, maybe.

I yeah. I mean, I know there's a lot of homeless students. I know there's a lot of homeless adjunct instructors. So I know that that's a need.

Yeah.

So I'll have to I'll have to see if I can figure out who to call you were mean,

Jackie Jackie Cruz would be at the heart now. She's all about money, so spin it. Somehow she'll win money wise.

Any other comments, requests, referrals?

Some point, it would be good if this committee could meet with the people who do the the transportation and other plant services that are out there. Because we're talking about building houses. We need to talk about infrastructure. Yeah. Where it goes. So Because you can't your water, sewage, roads. Mhmm. That's pretty important. Yeah. That that's a big impact. At least it is in North Carolina.

No. Absolutely. I think across the county. Anything else?

The staff update was just November 7. The city of Salinas is having a regional housing forum.

Can we send that out? RSVP is required.

Yeah. We can.

There is a screen We'll

send out the link to the Which

the committee.

To the committee. Yeah. Where is

that at?

Why do we think this is gonna It's gonna be

at the Oil. One yeah. There you go.

1 Main Street. Whatever.

It's time back then.

Yeah. Can ask them if

I have

a a link for

it. Okay. Mhmm. Got it from CSUB.

Okay. Hope you send it out, Alex.

Yeah. We'll send I'll send out the link. K. And that's that's really it for staff's updates.

Next scheduled meeting, November 12.

So do you wanna have a meeting on the twelfth? By that time, I will have the survey done, and I will be out hopefully talking to supervisors. So there will be potentially something for you to receive. I'm not sure that there will be an action item.

I think that's fine. And then, I mean, if there's an opportunity to maybe include one of the requests Mhmm. Into the meeting, short presentation, I I think that's always least that's my thoughts here, just so we start learning the the intersections of other

And, you know, I mean, this is just another thing I I don't I'm I don't if it has to do with housing, but maybe it could. You know, Aliso Union School District, Saleas Union High School District, part of Saleas City, they're getting over $80,000,000 in community

Community schools.

Money. Community schools from the state.

Those are those are one time funding dollars. Yeah.

Over five years. Like, this year, they get 25,000,000. What the high school district. The Alice House getting, like, 17,000,000. It's supposed to be for community. It's supposed to be for you know? And I'm I'm going to all these meetings. You got a gal talking about pots and how we need to work on that with the kids in school. Don't we need housing?

Mhmm. Yeah. That's what we're almost

I don't know if any of this I mean, I'm I'm going to a meeting. What is it, on on Monday night. I can ask. I I don't know.

I think that there is really being aware of of how the the various districts are planning to use those dollars. And

I can't begin to believe they don't know what the hell they're doing with the dollars.

That that could very well be the case.

And they're paying people to be directors, and they're having fun little events, but I don't know. When 80% of all the students are not proficient in math

Yeah. I think it's

not just math.

Well, I know reading is because reading is actually

science is another one. Well I mean, and that's

what we're testing.

That's just parallel with the commute to the world we live in.

But at

least in The United States.

But it's a lot of money coming in, and and it could be could that part of it go toward because part of the problem is a lot of students are either housing insecure.