By Carla O’Day
The Reno City Council amended its municipal code Wednesday to allow developers building affordable housing units to apply to defer payment of sewer connection fees prior to a certificate of occupancy being issued.
However, no explanation or threshold for “affordable housing” was set.
Currently, sewer connection fees are due and payable upon building permit approval. The adjusted code allows developers to request a deferral and get a temporary certificate of occupancy pending later payment of connection fees.
Sewer connection fee credits would be available in certain instances, such as a structure being destroyed or demolished and being rebuilt.
The city hopes this concept provides an incentive to developers to include affordable rate units in projects, in addition to market rate units.
The 6-1 vote had Councilwoman Jenny Breckhus dissenting, who said the terms of deferral weren’t clear, including the definition of affordable housing. Government subsidizing housing is one thing, she said, but developers building unsubsidized affordable housing could open the floodgates without an ordinance that sets the rules in stone.
“Are we talking about subsidized housing or something that meets some affordable housing threshold?” asked Breckhus. “There’s no real evidence of what this would achieve and to what magnitude. How will this work in the lending environment? How permanent would a deferral be through subsequent sellers?”
John Flansberg, city public works director, said applications would come before the council for approval and could be vetted on a case-by-case basis. He said Washoe County and Sparks allow this.
City staff told council members that the U.S. Department of Housing and Urban Development has its own definition of affordable housing and that could be used as a qualifying standard. The council could also amend the ordinance in the future.
“We can argue this all day long but people need homes,” Mayor Hillary Schieve said.
Nobody from the public spoke on the issue, but HaberRae Properties partner Kelly Rae brought up the sewer fee inequities during the June 21 City Council meeting.
The company rehabilitates buildings in Reno’s urban core and turns them into affordable housing. Rae said she’s been asking the city for this since 2005, when HabeRae began building the 8 on Center multifamily development.
“Currently a new house containing seen bedrooms and seven bathrooms is being charged the same amount as one of our new homes with 400 square feet with one bedroom and one bathroom. That’s $6,500,” said Rae, who’s currently in the process of building a Tiny Ten project, 10 homes collectively totaling about 5,500 square feet.
“The current fees being charged by the city would kill my project,” she added. “I want to do an affordable small home project that targets the individuals who can’t afford the median price of $326,000.”