by Michael Lyle, Nevada Current
February 25, 2022
Nevada’s tepid response to its housing crisis was fully apparent last year when the Nevada Housing Coalition, a group consisting of social service providers and developers, was presented with the state of affordable housing.
“In March, the Nevada Housing Division economist presented the Annual Housing Progress Report and showed from 2014 to 2020, Nevada’s inventory of affordable housing units was flat,” said Christine Hess, the executive director for the Nevada Housing Coalition.
Though 741 new affordable units were created statewide from 2019 to 2020, another 125 units were lost. The report showed while the state saw a low 2% increase in affordable housing, that didn’t match the population growth.
Nearly a year later, with the help of unprecedented federal relief dollars provided by the American Rescue Plan Act going toward housing, Hess says the state is in the position to finally “move the needle.”
In an off year state of the state speech, Gov. Steve Sisolak committed to investing $500 million to affordable housing:
- $300 million for developing multifamily units;
- $130 to preserve existing affordable housing to prevent units from converting to market rates;
- $30 million to increase homeownership;
- $40 million for land acquisition.
“At a time when Nevada has experienced a lot of growth and a shortage of affordable housing, this investment is a serious commitment toward progress and moving the needle,” Hess said. “This is historic for us, and to me represents a shift in affordable housing and the future for Nevadans.”
Sisolak’s announcement comes a week after the Nevada Housing Division said $300.7 million, or 87%, of the state’s 2021 tax-exempt bonding authority would be earmarked for affordable housing. Nearly 2,900 affordable housing units will be created by 2024 from the previous years’ bonding while the division estimates an additional 2,000 units will be constructed or preserved using the 2021 allocation.
Local governments including Clark County, the City of Las Vegas and the City of Reno have also announced portions of their federal relief dollars will be directed toward housing projects.
Clark County is allocating $150 million in relief dollars to affordable housing while the Las Vegas City Council voted to direct 20% of its $131 million in relief dollars toward housing.
“I would guess in total with just ARPA funds we’re probably pushing $1 billion for affordable housing between the state and local government commitments in funds for affordable housing,” Hess said. “That’s also representative of the housing crisis we’re in right now.”
Nevada was in a housing crisis even prior to the pandemic and lacks more than an estimated 105,000 affordable units.
While the state’s greatest deficit is for extremely low-income renters earning less than 30% of area median income – the Nevada Housing Coalition estimates we lack about 84,000 of those units – Hess said affordable housing can include renters making up to 120% of AMI.
Several groups of people fall into this range, including people exiting homelessness and entering supportive housing, which involves case management and wrap-around services.
Hess notes it also includes everyday workers struggling to pay the rent.
“Even if the lower end of our income limits can be incomes of $25,000 a year, these are minimum wage workers,” she said. “We are talking about working Nevadans, working families, families with children who are struggling to make ends meet. What we’re striving for is housing that meets families where they are with their income level so those families aren’t paying more than 30% of their income on rent.”
Nevada has struggled to adequately invest in and develop affordable housing.
Hess said the American Rescue Plan Act, the federal relief signed into law nearly a year ago and that allocated $6.7 billion to Nevada state and local governments, opened up the door for the state and municipalities to direct funding toward desperately needed housing projects.
The entire Democratic Congressional delegation voted for the relief bill while Republican U.S. Rep. Mark Amodei, along with every other Republican in both the House and the Senate, voted against the legislation.
Over the summer in 2021, the housing coalition formed a task force that included the nonprofit sector, providers and developers to create recommendations on how the state could spend ARPA funds on housing.
Last September it released those recommendations and asked the state to invest $500 million from ARPA funds into housing projects, with $275 million specifically directed at building more multi-family units and dedicated units for supporting people earning below 30% of the area median income.
The coalition essentially got the suggestions it fought to see included in the allocation Sisolak announced this week..
The governor’s office estimated the pledge would create 1,700 affordable units statewide, which lines up with the projections the housing coalition made last September.
In its recommendations, the coalition broke down the type of housing by AMI and suggested 260 units specifically for permanent supportive housing.
While Sisolak didn’t specify in his speech the types of housing projects by income level that could be developed, Hess and the coalition are having those conversations around the various housing needs.
“While I don’t see it explicitly (in the outline), affordable housing is so complex,” she said. “I think there are a lot of details you can’t put into an announcement.”
Hess said a dedicated pot of money for housing preservation is a huge step – the group recommended $125 million for preserving existing affordable stock while Sisolak’s proposal includes $130 million.
“The reason our inventory has remained flat is partly because we’re losing housing,” she said. “To intentionally preserve it is necessary and awesome.”
Lawmakers in the 2021 session passed Senate Bill 12, brought forth by former state Sen. Julia Ratti, that would enable a 12-month notification to give localities and tenants warning when affordable housing units would transition to market rate.
During the bill’s hearing, legislators were told the state was at risk of losing 7,500 units in the next five years, prompting support for the bill. However, it passed without dedicated funding for preservation.
Sisolak’s commitment is estimated to preserve 4,000 units for an additional 30 years.
Hess said that since “land is always a major conversation when you talk to developers and the challenges out there driving up costs,” it is also important that the state is putting $40 million toward land acquisition.
The Nevada Recovers fact sheet estimates a $30 million investment in homeownership will “assist with homeownership and supply available to middle income Nevadans.”
National and state data has shown a widening gap in homeownership between white households and people of color.
Black and white homeownership in Las Vegas is about 30% and 61% respectively, a 30 points disparity gap, according to the U.S. Census.
According to the Nevada Commission on Minority Affairs, homeownership among white Nevadans remained at 65% between 2006 and 2018 – it dipped to 60% in 2010 – but decreased among all other racial groups in the same time period:
- Black homeownership plunged from 42% to 28%;
- Hispanic homeownership dipped from 50% to 47%;
- Asian homeownership fell from 69% to 64%;
- Native American homeownership dropped from 53% to 48%.
While there have been several state and local initiatives to boost rates, Hess said the coalition and “the housing community must maintain an intentional focus around racial equity and social justice when it comes to housing.”
“It’s on us to really be watching from an accountability perspective the results coming out and the demographics of who we’re serving,” she added.
Though the housing coalition and organizers praised Sisolak’s announcement, they also agree there is more work to be done.
Hess said it’s going to take more than money.
“It’s going to take all of us working with good policies and working with local governments for these projects to happen,” she said. “Private developers have to be at the table as well. All of these coming together to move the needle. This is a huge start and one not taken in Nevada to date.”
In a statement following Sisolak’s address, Erika Castro, the organizing director for the Progressive Leadership Alliance of Nevada, said the investment is historic but also called for other solutions to protect tenants.
“In addition to these huge investments for Nevada’s families, we look forward to working with lawmakers and tenants in establishing rent caps for Nevada,” Castro said. “Not only have tenants had to battle evictions during a global pandemic, and navigate the (CARES Housing Assistance Program) process, now we are dealing with landlords and property managers price gouging tenants desperate to find affordable and safe housing.”
*** This story has been revised to reflect additional information and clarification from the Department of Business and Industry.
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