The Lack Of Public Funding For Affordable Housing
Nearly a third of the households in the Truckee Meadows are considered either very low or extremely low income. That’s according to a report created by the Truckee Meadows Regional Planning Agency in 2016. With housing prices continuing to climb, many of those residents are being pushed out of the area. Part of the problem is the lack of publicly subsidized, affordable housing. Reno Public Radio's Paul Boger reports.
It’s mid-afternoon in South Reno, and Dane Hillyard with Greenstreet Companies is walking through the construction site of one of his newest developments.
"So, you understand what this is, right?" Hillyard asks. "[It's] senior, affordable. It's 230 units. It's one and two-bedroom units; everything is in them. They have a full kitchen, washer and dryer and all that stuff in each unit."
If you’ve driven south on Interstate 580, you’ve probably seen the site – Vintage at the Crossing. It’s just one of the several multi-unit developments currently being built in the Truckee Meadows, and it looks like when it’s done, it’ll be pretty nice.
"What we try and do in the units -- these are going to be owned long-term -- so we spend more money on finishes than what you would typically see in an apartment that was going to be flipped and sold, so we have granite countertops, vinyl plank flooring."
But is it affordable?
Multi-family and other high-density dwellings have been popping up for the last few years. And yet, what makes this particular project a little more unique is that it’s meant to be affordable – like, truly affordable. For a one-bedroom, rent will be about $700 a month and $830 for a two bedroom – that’s roughly $400 or $500 a month below market value.
And how are they doing this?
Vintage at the Crossing is one of the first developments in Northern Nevada to receive bond money in more than a decade.
"It takes about a year to assemble the financing for these projects," says Eric Novak with Praxis Consulting, a company that helps developers build more publically-funded affordable housing projects. "It's located in what is called a difficult development area, which allows the project to boost its tax credit equity. The developers were specifically looking for a site that would have this boost in credits, and this was the first new construction bond project since 2004 in Northern Nevada, so it's a big deal."
He says many of the incentives are incredibly difficult to get. The federal Low-Income Housing Tax Credit has been a driving force in the creation of new homes, but it’s capped annually, and bond projects have been nonexistent since 2004. And despite the credits that are available, rising costs of labor and materials outpace the incentives.
"On this project, we got $1.08 per credit," Novak explains. "The next project we did, we were down to $.94 per credit. These new programs come out that help bridge the gap and interest rates go up and we can't borrow as much money. The value of the tax credit goes down, so it's a constant struggle of trying to piece together financing for projects."
To make matters more difficult, most low-income projects are fueled by incentives provided by the federal government, but on the state level, there’s nothing. During the last legislative session, state lawmakers created a committee tasked with examining the state’s current housing crunch and coming up with strategies to address the issue.
"While we would love for the market to take care of everything, the truth of the matter is that 95 percent of affordable units are built with some sort of a tax credit program, typically federal," says Committee Chair Sen. Julia Ratti, a Democrat from Sparks. "Many other states have state-level tax credits. We are so far behind that I believe, personally, it's time that Nevada put some money on the table as well to build more affordable units."
But tax credits aren’t the only tools available to incentivize the construction of affordable housing projects. Cities and counties can also play a role by limiting fees and opening up land.
"Every day, I just talk to more and more people who say housing is their number one issue and it's just going to get worse," Ratti says.
The senator says that leaders can’t just talk about the issues in broad terms anymore because something needs to be done, sooner rather than later.