Are there tangible returns on investments in farmworker housing? Kaitlyn Ann Lutz, Dairy Management Specialist at Cornell Cooperative Extension points out that substandard housing is a driver of turnover on some farms. Jay Canzonier, Extension Support Specialist at Cornell Agricultural Workforce Development adds that a high standard of housing sends a message to farmworkers about standards on the farm.
Many New York Wine & Grape Foundation members are familiar with the Farmworker Housing Program which provides 0%, 10-year loans to agricultural producers to purchase, improve or construct farmworker housing. The program is aimed at bringing farmworker housing into regulatory compliance, but can also be used for new construction or expansion of existing facilities. The program is structured as a revolving loan fund and the loan administrator, Farm Credit East gets a 5% closing fee.
Agricultural producers can borrow up to $200,000 per year. So far, over 400 ag producers in NY have been able to take advantage of the program, receiving over $29 million in loans. The housing can be used for H-2A workers.
The Farmworker Housing Program is the most popular option for accessing low interest financing for improving farmworker housing. Interested wine and grape growers can contact Michael Haycook, Farm Credit East, ACA One Pioneer Drive Potsdam, NY 13676 315-265-8452 or 800-295-8431.
However, there are some other possibilities.
Over the next 18 months, four dairy farms in Ontario County will use $2 million in Community Development Block Grant assistance to improve their farmworker housing. The project includes renovating existing homes used by farmworkers, replacing old dilapidated mobile homes with new manufactured homes and replacing scattered site housing with dormitory style housing.
Ontario County had lost staffing in their planning department and couldn’t manage a CDBG grant. They were able to subcontract with G&G Municipal Consulting and Grant Writing to do the grant administration. Drawing on their mobile home repair and replacement experience, PathStone, a not-for-profit community development organization, is providing the project management via their Rural Housing Opportunities Corp. affiliate.
The project started with two farmers expressing interest to Cornell Cooperative Extension – they had heard about the CARES Act funding. Cornell cooperative extension sent out notices through their listserv, as well as the Farm Bureau, which brought in interested farmers.
The Community Development Block Grant application and contracting process can take 6-12 months and construction work must be competitively bid rather than working with preferred contractors.
NYS made available $25 million CARES Act funding to facilitate health and safety improvements to farmworker housing. Eligible activities included renovations to address overcrowding and allow workers to isolate safely, improve air quality and reduce transmission of airborne illness, remediate environmental hazards such as mold, lead paint, and poor ventilation.
Farmworkers initially occupying the assisted units must be at or below 80% Area Median Income, but there is no ongoing income certification in future years.
Another pandemic related housing collaboration is happening nearby.
In Wayne County, PathStone is helping seven fruit farms replace dilapidated mobile homes, placing four- and three-bedroom H-2A compliant manufactured homes on the farms. These homes are being provided for free.
After review of the CARES Act Farmworker housing funding details, the County Economic Development & Planning Department conducted a survey to determine the interest and need for the program. The County partnered with the Soil and Water Conservation District, the Farm Bureau, and Cornell Cooperative Extension to distribute the survey and solicit responses. Responses demonstrated significant interest in the program and the County took steps to apply for and secure funding. The County will be able to support 7 new manufactured home replacement projects through the funding they secured.
Ora Rothfuss, Wayne County’s Agricultural Development Specialist reflected that, “Our Department has significant experience with the CDBG program, but securing a partnership with Pathstone and including them throughout this process has been vital to our program success.”
If your community is interested in exploring the possibility of accessing CDBG funds for farmworker housing, you can start by contacting your town or county planning department.
Partnering with a nonprofit may facilitate a housing project if the county doesn’t have housing development capacity. To locate your nearest rural preservation corporation go to ruralhousing.org/rural-preservation-companies-rpcs/.
PathStone also provides on-farm housing rehab assistance in Monroe, Wayne, Ontario, Livingston, Genesee and Orleans counties. The matching grants are 1-1 up to $3,000, however ag producers generally provide a higher percentage of the project funds. Wine and grape growers in those counties can contact PathStone to inquire about the program. The 2023 grant application deadline has already passed but interested growers can call (585)546-3700 for more information. In other counties, wine and grape growers can contact local members of the Rural Housing Coalition to see if they provide similar assistance. Click here to locate your nearest rural preservation corporation.
Finally, USDA Rural Development also provides assistance for farmworker housing in the form of a secured 33-year loan with rates as low as 1%. The programs, however, cannot be used for housing H-2A workers.
In Indiana, PathStone provided technical assistance to Fred Gutwein and Sons, Inc, a seed company, with an on-farm housing project. Gutwein and Sons got a USDA low interest loan for a quarter of a million dollars for the project, (eight housing units for forty-eight farmworkers). The existing housing was in great need of improvement.
USDA Rural Development also provides loans for off farm housing which would require either a partnership with a local non-profit or a local housing authority with the capacity for development.
In the Salinas Valley in California, USDA helped finance a 41-unit off farm apartment complex (Terracina Oaks) for farm workers. The project cost $11.4 million and was financed with a $3 million Farm Labor Housing loan and a $700,000 loan guarantee from USDA Rural Development. Rural Development provided $7.7 million in tax credit equity. Tenants will be able to access Rural Development Rental Assistance (they won’t have to pay more than 30 percent of their income for rent) for 40 of the units.
It is important to note that USDA Rural Development farmworker housing application are onerous (whereas the feedback for the NYS Farmworker Housing Program application is that it is a fairly user-friendly process). However, if a farmworker housing project requires more than $200,000 the USDA programs might be attractive.
Although the USDA is not currently accepting applications for these programs, the application windows are anticipated to reopen in the near future.