by Michael Lyle, Nevada Current
As Nevada’s housing crisis persists, the state will allocate tax-exempt bonding authority to enable 14 new affordable housing projects statewide and produce nearly 2,900 units by 2024.
The Nevada Housing Division announced Wednesday that $300.7 million, or 87%, of the state’s 2021 tax-exempt bonding authority has been earmarked for housing developments.
Out of 14 projects currently under construction in Reno, Las Vegas and North Las Vegas, nine are slated to be completed by early 2023 if not before.
“As we focus our recovery efforts on meeting the needs of all Nevadans, housing has become a clear and critical need,” Gov. Steve Sisolak said in a statement. “This investment is one way we are going to provide assistance and relief to Nevadans, and I look forward to continue to look at ways we use federal relief dollars to complement this critical priority.”
Each year the federal government allocates millions of dollars’ worth of federal tax-exempt private activity bonds to each state.
As in most of the country, the lion’s share of Nevada’s federally allocated bonding capacity is authorized for investments in senior or low-income apartments and other affordable housing projects.
Housing, however, isn’t the only purpose eligible for financing through private activity bonds. It is also a popular way to fund facilities for charter schools. And in 2020 Nevada authorized $200 million in bonds for the proposed high-speed train to Victorville, although that money was reallocated to housing after Fortress Investment Group, the train’s developer, delayed the project.
Fortress has indicated it intends to renew its request for bonding in the future.
According to the Nevada Department of Business and Industry, which allocates bonding levels to housing authorities and other eligible projects, the bonds can be used to incentivize private developers to increase the number of affordable housing units or renovate existing units.
“We know that housing is a priority for Nevadans,” Terry Reynolds, the department’s director, said in a statement. “That’s why we’re ensuring that our bond utilization matches the needs of Nevadans to provide more affordable housing.”
Over the last five years, more than $1 billion of tax-exempt bonding authority was transferred to the Nevada Housing Division.
Nevada has long suffered from a housing crisis but the pandemic has only exacerbated the crisis.
While discussing bills during the 2021 Legislative Session that would have enabled local governments to collect fees from developers to aid in the creation of affordable housing – both pieces of legislation, opposed by developers, died without a single vote – lawmakers were told Nevada had a 105,575 deficit of affordable units.
Wednesday’s announcement comes as cities and counties struggle with the ramifications of low housing stock that, coupled with unchecked rising rent prices by landlords, is deepening the crisis.
Clark County Human Services Administrator Tim Burch told commissioners Tuesday that the low number of units is causing a problem.
“The stock is still constricted,” he said. “There are typically 11,000 vacant units in the community at any point in time. Right now, it’s only about 8,000, which is a little better than we were before you in September, but it’s still a heavily constricted stock.”
In September, he told commissioners there were only 6,000.
The lack of affordable units forced the County to shift dollars used to rapidly rehousing families on the verge of homelessness to instead go to temporary emergency housing solutions, such as extended stay motels.
With the influx of unprecedented money from the American Rescue Plan Act, which provided Nevada with $6.7 billion in federal funding, state and local officials have maintained affordable housing projects would be a priority.
The Las Vegas City Council also voted Wednesday to direct 20% of its $131 million American Rescue Funds to go toward affordable housing projects.
County Commissioners also voted in the fall to allocate $150 million of the funds it is receiving from the America Rescue Plan – the county received $450 million in total – for affordable housing projects.
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