The Fall of Babylon…….Or In This Case, Reno (Opinion)

By Katie Di Lillo Coombs

There are a lot of amazing things occurring regionally to be excited and grateful about. Unemployment is down, wages are up, home values are high, vacancy rates are low, and the economy, at the moment, appears to be relatively stable. For those of you who lived locally during the “Great Recession,” you know that it was in many ways the exact opposite of this. Careers were endangered, many people owed more on their home than it was worth, and a general sense of desperation and fear was prevalent.

One of the most important local sectors is, generally speaking, development. This sector encompasses many trades: contractors, sub-contractors, design professionals, real estate professionals, mortgage brokers, and appraisers just to name a few. Most people are hard pressed to not know at least one person who makes their living due to a development related profession. In the mid-2000s, prior to the recession, things appeared to be fantastic. Borrowing money was easy, regardless of your financial position.

People gave very little thought to their debt position because they had faith in two things: 1) their house would be worth more tomorrow than it is today, and 2) when it came time to sell, someone would be chomping at the bit to buy it.

Looking back, one thing to note is that this fiery hot economy wasn’t backed by any tangible rationale. In a sense, it was basically just crazy for craziness sake. Then, as we all know and perhaps fearfully remember, the whole thing came crashing down more or less on New Year’s Day in 2008. Greediness, especially on the part of big banks, and rose-colored glasses had fooled us all.

Fast forward to today and many situations bear a significant resemblance to those times. However, there is one key difference in our local economy – employment. Our regional economic driver, the Economic Development Authority of Western Nevada (or EDAWN for short) has been for years, and continues to be, hard at work touting the benefits of our local area from a business standpoint, and their hard work has paid dividends.

Elon Musk at the Tesla Gigafactory. Image: Bob Conrad.
Elon Musk at the Tesla Gigafactory. Image: Bob Conrad.

We’ve all heard the stories of major corporations and businesses who have decided to make northern Nevada a major part of their future. Tesla, Google, Switch and Blockchains are the biggest and most prevalent you’ve heard of in our internet driven society. Beneath these behemoths are an even longer list of just as important entities who have chosen northern Nevada as a home.

If you get a minute, I’d suggest you reach out to EDAWN’s President & CEO, Mike Kazmierski, and thank him for all the hard work he and his team have been hammering away on for years. Whether you realize it or not, their work has made your life better if you live in northern Nevada. The employment generated by the influx of these companies to the region is a huge reason why our economy is thriving and, unlike the mid-2000’s, offers a strong foundation on which it can continue.

Mike Kazmierski of EDAWN speaking in 2018. Image: Bob Conrad.
Mike Kazmierski of EDAWN
speaking in 2018.
Image: Bob Conrad.

Now, here is where things take a turn. If a company, let’s take Tesla as the obvious one, is going to create a whole bunch of jobs, then the employees filling those job positions need a place to call home. As you all know, after a long day of work, a person needs a place to go home to, whether it be a house, an apartment, a condo, or townhouse. Some of those jobs will be filled by locals who theoretically already have a home. Many of those positions are going to require people to relocate to northern Nevada and they will need a home.


“Missing Middle” Housing

This is where we are falling short as a region and it’s dangerous. I have spoken with high ranking officers at Tesla and their recruiting efforts are already being hampered by their inability to demonstrate the availability of local housing to these potentially relocating employees, many of whom will also be bringing families with them. Quite simply, northern Nevada is drastically lacking in what many have termed the “Missing Middle” of housing.

Exactly as it states, this middle brand of housing applies to a reasonably priced residence that a future Tesla employee can move into. This doesn’t include a worn out 50-year old fixer-upper nor does it include a high priced home in an affluent community. It is a home that a hard-working couple with two kids can purchase and enjoy. The opportunities to purchase, or even rent, a home in this valuable middle is rare, and getting rarer with each passing day.

Economies, particularly regional economies, can be compared to the worn-out example of a shark. They must continue to move, or they die. Locally, we must support the companies bolstering our improved economy. One of the ways we can do this is to provide what those companies need in order to be successful. In this case, that support comes in the way of creating housing needed by the employees of those companies who will make those companies successful.

Development is needed. The employment projections by EDAWN have been freakishly accurate to date, and there is no reason to believe that moving forward those projections won’t continue to be spot on. Those projections tell us that thousands of homes are needed. A couple of new homes here, or a new 50-lot subdivision there, are not going to cut it. We need thousands of new homes.

Now we must consider the developer who is considered by many to be greedy vultures of society. This is a comparison I’ve never understood because, like any other hard-working person, they provide a service and, in this case, a service desperately needed. People assume that developers will come to town, pillage our local resources (water, infrastructure, roadways, etc.) all while not contributing anything toward the impact of their new development. It is assumed they will build their homes and laugh all the way to the bank with their profits.


Common Arguments

There is also a strong sense of NIMBY-ism (Not In My Backyard) prevailing locally that is exceptionally short sighted. At this point, it makes sense to address some of the most common arguments cried out whenever new development is considered:

The infrastructure needed by a new development should be built BEFORE the homes are built.

This argument is most typically applied to roadways. Nobody likes sitting in traffic and all someone considers is that “If they build 2,500 new homes by my house, then traffic is going to get worse, so they need to do the traffic improvements first.”

This isn’t reasonable, or even possible, for many reasons. There is a delicate balance between the progress of development and the surrounding infrastructure. Many, if not all of the new roads, or improvement of existing roads, will be the responsibility of the governing municipality to maintain once they are built, whether it be the City of Reno, City of Sparks or Washoe County. Taking care of roads is expensive and requires staff, labor, and materials, none of which is free.

Furthermore, none of these governing agencies are sitting on a big pile of money with which they can just go build new roads. They each have a limited budget which is managed by smart, hard-working individuals who I sincerely believe are doing the best they can with what they have. These agencies rely on impact fees and revenue generated by the new development to fund these new improvements.

Developers, in many ways, are in the same boat. Recently, many developers have agreed to front load some improvement costs, but there is a point where they can’t go any further down that road. They too, like the local governments, need revenue from their development to pay for needed infrastructure. They must walk hand-in-hand with their accompanying local government to get things done. Each one needs the other. Now, does this mean that there could be periods where traffic (or whatever else) gets worse before it gets better? Yes, it does. But that’s how it has to happen.

That is reality.

Also, for those of you who state that developers don’t have to pay any money towards the solutions needed to accompany the impacts of their development, this is patently untrue. I encourage you to contact your local government to get it straight from the horse’s mouth what they have to pay in the way of impact fees, water rights fees, connection fees, permit fees, etc.

These costs are thousands of dollars per unit, which over the course of a large development yields millions of dollars to local governments. The roads and utilities serving your home, in your subdivision, were created exactly this same way.

Flood waters in Lemmon Valley. Image: Washoe County.
Flood waters in Lemmon Valley. Image: Washoe County.

They want to build in a floodplain, which will make flooding worse.

It is true that some of the recently proposed projects are situated in floodplains. As Mark Twain famously said of land, “they don’t make it anymore.”

The reality is that some of the local large tracts of land that can accompany development of the size needed are in fact located in floodplains.

However, State law and local regional policies REQUIRE that the drainage impact of a development cannot worsen the limits of flooding in the area. Simply put, the development of land within a floodplain WILL NOT MAKE FLOODING PROBLEMS WORSE. In fact, some proposed developments in the North Valleys and south Reno have gone above and beyond what is required by current Code to offer more assurance that flooding will not worsen and, in some cases, will actually be improved to some degree.

Developing in a floodplain requires technical engineering solutions devised by highly trained professionals backed by years of experience and data. Skeptics will sometimes claim that engineers will “say whatever the developer wants so the project can be approved.”

I don’t know a single engineer who would ignore the results of their professional analysis for the benefit of a client. The entire basis of their career, and livelihood, is that they are governed by a responsibility to be honest and conscientious in regard to what they are designing. Engineers are not for sale. They are hired by a client to do a job, but to do that job within the confines of their professional licensure.

They should build less lots than they’re proposing.

This statement gets made often. However, if a developer is proposing to develop property in a way that conforms to the existing zoning and Master Plan, then they have every right to propose a specific number of lots. Now, if they are proposing a change to the zoning and/or Master Plan, then those waters get a bit murkier.

There are a ton of things to consider under that scenario and they must be looked at objectively. Higher density or a different type of use isn’t always a bad thing when all things get considered. The answer can’t always be “they should build less lots.”

Furthermore, developing property is an expensive proposition. In addition to the fees discussed earlier, there are construction costs, labor costs, design costs, all of which are high right now due to high demand. Certain costs are in a sense fixed and the only thing a developer can do to make them more affordable is to split them amongst more lots. These economics are many times what can make or break a project from a development standpoint.

I don’t want that property to get developed. I like it as open space.

This is more a pet peeve than anything. If a piece of property is privately owned and not designated as Open Space, then the owner has the right to develop it. Period.

Just because you’ve enjoyed it as a sagebrush field for years, doesn’t give you any preemptive right that it stay that way. Often time’s people will claim that they’ve used the property for years for recreation, or to walk their dog, etc. and, if developed, they won’t be able to do that anymore. Well, technically speaking you’re just losing your ability to trespass.

All of this just scratches the surface of the complexities of the development game. If we want our area to continue to thrive and all of us to enjoy a nice standard of living, then we have to get on board with what needs to happen to make that a reality. We must support the businesses that took a gamble on our region. We must provide housing for the employees of those businesses.

On a grand scale we need thousands of homes. Local governments must get more proactive. Current residents must be realistic. If we don’t, then just like the shark, our local economy will die. I will go so far as to say that this article can serve as a warning. If things don’t change then we will miss a massive opportunity and in a few years be regretfully reminiscing on what we could have done differently.

Daybreak development location. Google Earth image.
Daybreak development location. Google Earth image.

The Daybreak project in south Reno is the most recent and apparent display of this phenomenon. This project is comprised of privately owned property in the South Meadows area of town, which is one of the most attractive and active regions in the area for housing.

The developers of this project are proposing 4,700 residential units on one of the few remaining property assemblages that can accommodate a project of this size. It is a prime example of what we need to be developed in our area.

It was denied at the City Council by a vote of 6-1. I believe this denial was driven by NIMBY-driven outcry and politicking rather than sound judgment. The property does have some floodplain challenges, but all were mitigated by sound engineering practices, dedicated wetlands, open space and drainage ways. Furthermore, the developer agreed to conditions above and beyond what is required by City code such as:

  • Fire equipment and station improvements, including the purchase of a new ladder truck for the City of Reno Fire Department. This is notable because a ladder truck is not needed for a development such as Daybreak. This offering by the developer is solely for the benefit of the Fire Department as a whole.
  • The purchase of a new ambulance for the City despite the fact that REMSA is the primary ambulance service provider in the City.
  • The agreement to pay $500 per lot into a land trust to build affordable housing in other parts of the City. I’ll do the math for you and let you know that this calculates to a $2,350,000 benefit to the City.
  • The developer agree to a flood mitigation practice that is 25% more than is required by City Code.

Once again, not a single one of these offerings is required in any sense. The developer has gone so far as to call them “extractions” in order to get to a hearing at the City Council level, and I have a hard time disagreeing with them.

If we have a developer who is proposing a desperately needed development in an appropriate part of town, has paid millions of dollars to devise solutions for the challenges the property presents, is willing to offer considerations above and beyond what is required of them, and they still can’t move forward then what do we have?

If you ask me, the answer is a recipe for failure. Our elected officials, in this case the Reno City Council, need to do consider the present housing crisis and vote accordingly.


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18 Comments

  1. NO flood plain fill ins!!! If anything at all then the developer can build his homes on stilts, maybe Le Corbusier style. If that is not feasible then too bad. But that said I think there are more single family homes build then needed which leads to a deflation of the value of existing homes. How about more apartments for the lower (middle) class? There seems to be more demand. That could also be done in mentioned stilts style 🙂 And during floods we can have a nice gondola service 🙂 (Or elevated walkways)

  2. So much to unpack here. While not addressing all of this, I would like to make a few key points. First, anyone who is against unbridled, poorly planned growth is subject to the same old tired name calling. Anyone opposing anything is a backward NIMBY, a ” no growther” who doesn’t understand the economy. We must either be growing at a boom/bust rate wherever we want or we will die. There is nothing said about moderation, planning wisely, not building in outrageous flood zones, up steep mountainsides, on top of well-known fault lines. Anyone wanting to address quality of life is ignored. Here are some facts, off the top: Reno and Washoe County are both facing serious financial challenges, especially Reno. We the ratepayers and taxpayers have voted ourselves many amenities including the Veterans Parkway, many roads, new schools, flood control, etc. Due in part to sins of the fathers, Reno is up to its eyeballs in debt and has no money for appropriate fire and police coverage. Right now we the existing residents are finding ourselves financing sewer lines and water lines for new development. We are starting to rise up and say, “That is enough.” Developers are taking advantage. When they do not get their way, now they are suing Reno. These people come here from elsewhere, build, exit, and do not seem to care about the fallout. This Daybreak is the most egregious proposal I have ever seen around here. This land goes under many feet of water. Yes, engineers can elevate it, and say that the next piece of land that now bears the brunt of the water is “not our problem”. I could go on. I do not envision any money questions on any ballots receiving warm reception any time soon. We are paying hundreds upon hundreds of millions of dollars to accommodate this growth. I have enjoyed reading this woman’s columns in the past but this definitely feels like a paid advertisement. It is like we the existing residents are being told just to sit down, shut up, and enjoy this. We do not want our area destroyed by miles of stucco subdivisions and shopping strip malls. This is not California. This feels like we are being shamed for expressing our opinions. Not good.

  3. Wow – Some comments are downright vicious, vituperative, and ad hominem, and don’t address the issue. It is an opinion piece that lays out one possible dystopian result of unreasonable resistance to growth. No longer is it a cohort of NIMBYs but CAVEs (Citizens against Virtually Everything). It is not ‘BS’, ‘unprincipled’, ‘clueless’ or ‘paid’ developer advertising. The piece is merely a warning of what a community may expect if they continue to ignore and/or resist the social and economic realities of supply & demand. There are hundreds of communities across the west that squandered their opportunity for quality growth on silly stuff. Proposals for cutting-edge Low Impact Development principles are resisted by city staff, even though the City policy says they are ‘for’ it. Affordable infill development is politically unrealistic, so we naturally get sprawl. Reno cannot even get Accessory Dwelling Units (ADUs) approved, which is low-hanging fruit for addressing one aspect of affordable housing. Before completely pulling up the drawbridge to any change, consider who dared to build your community before you got here.

  4. By adopted rules the TRIC does not allow developers to build housing out near Tesla Switch and others. Since the Park is essentially sold out by the founders maybe they should look at modifying these rules. I am sure Tesla alone could build 5000 apartments in that area.

    • The area around TRIC has many heavy industrial businesses that utilize hazardous materials, controlled substances and petrochemicals. It would not be safe to build housing anywhere inside of the industrial park.

  5. This entire article seems to be the sum of someone interested in the rights of the developers. It really is an opinion piece as it does not share any element of non biased reporting.

  6. Missing from this otherwise very understandable and logical article is the fact that new housing has just gotten utterly unaffordable. No matter how small the square footage. We must think outside the box and begin building mid-rise condos and apartments. While the ground the project sits on gets its utilities built and buried, the building itself is assembled in a city like Boise or San Jose. Take a look at Guerdon Modular Buildings, based in Boise. They’re imitating what’s been going on in Scandinavia for the past 20 years – stacked modular dwelling units, 95% assembled even before they leave the factory. When they arrive at the building site they place them one atop the other and bolt everything in. And the cost per square foot is far lower than your average 1950s style “ground up” construction paradigm that we STILL have today. Last century construction practices belong in a museum – not in today’s housing-crisis America. Imagine – a spacious two bedroom unit for a little over $100,000. And Guerdon, and others, can build 100 units and have them in place in less than 75 days. Suddenly we have 3 construction cycles per year instead of just one. America has badly fallen behind the rest of the world in a lot of categories. And housing is one of them. Imitation is said to be the highest compliment a competitor can pay a leader. Let’s get to work and put people into affordable dwellings that they can afford and are proud to live in.

  7. The idea that you can succeed building neighborhoods before the roads and infrastructure needed for commuting in and out of them is absurd. I wonder if the author’s wishful thinking is an unavoidable hazard of a great economy and growing tech sector. That would explain what happened to Seattle. I hope Reno has better stewardship.

    • There are a lot of ways to skin the infrastructure cat. But only a couple of scenarios really work. Pay as you go and bond with your fingers crossed. Here’s a better way. Stop building out. Start building up. Stacked modular units like the ones Guerdon Modular Buildings (and many others) construct is the way to go. Single family homes are land wasteful and a ball and chain around the legs of too many families. We need to completely re-evaluate our policies on human habitat to meet people’s needs, rather than buying something that always overpriced.

    • I agree. The South Meadows area has a good shopping Center nearby, but the parking lot is 3/4 filled on an average day. The traffic impact on the nearby highways must be considered, and plans to add highway lanes must be planned before the lanes are severely impacted.
      This area is currently a highly desirable area of Reno,and homeowners have a great deal of investment in their homes. Residents will support plans for growth, provided the quality of living is considered along with property values.

  8. This is Reno! That is what people do here. They act like sense they moved here, subsequently no one else should follow. Of equal concern is the fact that there is little movement downtown on housing construction. One of the best economic conditions in decades and the city has so many rules nothing is happening. While Sparks builds and builds.

  9. Bob Conrad? May I suggest you offer Lamar Aaizzi of Nevada Intercity Passenger Railroad, LLC to write an article about how rural Nevada towns could expand with more housing, such as Carson City, Fernley, Fallon, and Dayton. More development in these towns would be great for their local economies.

  10. I’ve heard all of these arguments before. I grew up in the West, administered real estate classes for those seeking their real estate courses for those seeking their licenses, watched developers come and go, and heard all of the themes you stress many times over. Yes, it’s good to see Reno not only bouncing back but diversifying in its employment base giving those whose net worth is tied up in their houses the chance to have their heads above water once again. (I’m riffing on your theme.)

    The problem is, in fact, that few developers operate with strong principles and, particularly today, strong principles and big picture thinking aren’t optional. Ideally, the developer would be local and would have to live with her/his creation and face fellow citizens on a daily basis.

    Newport Pacific Land only had enough concern and compassion for the Reno area as it might take to have their way with Butler Ranch at which point they will leave town with their bags of money, leaving the Daybreak residents and the municipality holding the bag. They got voted down and now they’re having a hissy fit. The chutzpah of the $50M bond request for Stonegate infrastructure is more of the same behavior. Considering there is zero infrastructure existing there, you can bet the price will be three times $50M and Reno will get stuck with the difference.

    Tesla and its neighbors were plopped down on USA Parkway with virtually no pre-planning for traffic management until people started to scream. Wetlands are being overbuilt at a mind-boggling rate in an area that has been a flood plain long before there was a Reno. The pollution in the Truckee basin grows significantly worse each year and there is virtually no public discussion on what to do about it.

    Where, Katie, do we draw the line on this insanity? How can we take charge of our own future in ways that will benefit all of us, not just for tomorrow, but for the long term?

  11. Obviously Ms. coombs has been bought and paid for by the developers. She doesn’t have a clue of which she speaks. Today between Reno,Sparks and Washoe county we have more than enough housing units approved but not yet built, to support population growth for the next twenty years and beyond.

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