The Reno City Council on Tuesday heard presentations on the region’s perpetual housing crisis. City staff said fewer than 23% of area households earn enough to qualify for a median-priced home.
The median price for a house is $600,000, they said, and rent increases have been pricing people out of the area.
Sixty percent of the area median income is about $50,000 a year, or just under $4,200 per month, said Kelly Mullin, City of Reno planner. “For a household that is in that 60% AMI bracket, they would be considered housing burdened if their rent and utilities together exceed $1,250 a month. Average monthly rents in our area definitely exceed that.”
A year ago rent averaged $1,341 – today that number is $1,616. That’s a nearly 21% increase, a trend Mullen said is a national problem.
“Jurisdictions across the United States are struggling with housing affordability,” she added. “Across the U.S., seven out of 10 households are able to afford a median-priced home. Those numbers are actually a little bit worse in Reno. [Fewer] than 23% of households in Reno earn enough to qualify for a median-priced home.”
Households would need to make $117,000 a year in order to purchase a home in Reno, she said. “The cost [to purchase a home] is above what most of our residents can afford.”
“Everyone is hurting”
Tuesday’s special meeting was pitched to address the affordability crisis. Public commenters accused the mayor and council for a decade of inaction as rent and home prices have skyrocketed and the region’s homeless population exploded.
One commenter criticized Mayor Hillary Schieve for what she said was the mayor painting a rosy picture of Reno for the upcoming conference of mayors, scheduled for June 3-6, 2022.
Beth Dory accused Schieve of being more focused on blockchain culture and the Space Whale instead of ensuring Reno residents have safe, affordable places to live.
“The mayor, who is running for reelection this year, has been in office since 2012 – for 10 years, and for the last 10 years housing has gotten progressively more unaffordable,” she said. “We’ve seen our mayor’s scattered priorities – from pushing to purchase the dilapidated Space Whale that no one wants, to pushing bitcoin currency that no one understands – instead of focusing on the basics of sheltering our residents.”
Dory encouraged people to hold a demonstration at the Space Whale during the mayor’s conference.
Another commenter, Matthew Wilkie, accused council members of being in bed with developers. He named the major developers and construction firms in northern Nevada.
“Just between all of your … previous elections, these developers have donated more than $100,000 to your campaigns [cumulatively],” he said. “These are the people who put you behind the dais.”
Building out, not up
Mullin said most planned new housing developments are slated for the fringes of the area, not within the city core. More than 4,000 apartment units are being planned – meanwhile, prices are expected to continue increasing.
Construction costs have also skyrocketed, which is compounded by inflation and labor shortages, each increasing the cost to build.
Mullin questioned whether there are “bottlenecks or constraints” to building more housing. This topic was covered in 2019 when Schieve convened a meeting of developers for a housing forum.
Schieve described that meeting at the time as a tough conversation. She said that is in part because so many in the Reno area suffer from high rents and low wages, but also because developers struggle to provide the housing stock the region needs.
“I wanted to tell a little bit about what the [Reno City] Council has done,” Schieve said at the 2019 forum. “I think that has been overshadowed a lot by negativity.”
She said the same today and called for people to work together.
“It has to be a whole synergy,” Schieve said. “Everyone comes together literally from the ground up.”
Not enough housing
City staff repeated that there are not enough housing units and people aren’t making enough money to pay for rents and homes.
There are 7,345 “restricted affordable housing units,” Mullin said, and the city added 848 in 2021, both of which add up to more than 85% of the region’s total affordable housing. Sparks and Washoe County combined have about 1,100 affordable units.
The city, also, cannot regulate housing markets. Public commenters and local activists have called for rent control in an attempt to contain massive home and rent increases.
But assistant City Attorney Jonathan Shipman said state laws prevent rent control in Reno.
“We don’t really have the authority to step in and really regulate [landlord-tenant relationships],” he said.
The city is then tasked with approving or disapproving developments in accordance with city rules. City staff said “all housing is good” because an increased supply could reduce prices.
A Brookings analysis notes that federal subsidies can help those with lower incomes afford more expensive homes.
At the local level, cities such as Reno are said to have helped increase housing costs because of caps on building heights, lot size restrictions and parking requirements. Council member Naomi Duerr raised the point of bureaucracy contributing to increasing costs on new projects.
A U.S. Housing and Urban Development policy paper on eliminating regulatory barriers to housing affordability also showed local governments can help reduce barriers in order to support more housing.
“[Efforts can] range from reducing discretionary processes, to supporting conversion of vacant commercial properties to residential units, to supporting community land trusts to promote long term affordability,” the HUD report notes. “A jurisdiction can increase its housing supply by encouraging rehabilitation or reuse of existing stock, which reduces expenses on site preparation, foundation, and building exteriors, even if the interior space requires substantial rehabilitation.”
Some city, and partner, projects appear to follow that advice.
Hotel, dorm-style units coming
The city is proposing to use millions in federal coronavirus relief funds for low-income housing projects.
A new village on Sage Street will have nearly 100 new dorm-style units. The city’s Monica Cochran outlined the city’s efforts to purchase the land and the dorms.
“The units should be ready … in about six to 12 months,” she said. “We anticipate that these will fill up quickly.
The rooms will be available for rent at $400 a month, similar to the Village on Sage Street.
The Highway 40 Hotel on East Fourth Street is proposed to be renovated, also with federal coronavirus relief funds. The 34-room hotel would be operated by the Volunteers of America.
It’s a $4 million project and room rents would be about $600-$1,000 a month, Cochran said. “The rooms would be renovated as they become available, so people would not be displaced.”
Councilmember Neoma Jardon praised the project.
“This one excites me,” she said.
