Bill would enable local governments to spur affordable housing

by Brian Bahouth

Reno – Nevada state Senator Julia Ratti (D-Sparks) was the chair of the Nevada The Committee to Study Issues Regarding Affordable Housing and today presented one of five or possibly six  bills to come from the interim committee to the Senate Committee on Government Affairs, SB103.

Hear Senator Ratti’s comments …


Senator Ratti began by describing the affordable housing crisis and said that more than any other issue, her constituents have expressed concern about the lack of affordable housing in northern Nevada, and as chair of the The Committee to Study Issues Regarding Affordable Housing she also learned that the lack of housing for middle and low income Nevadans was severe in southern Nevada too.

Ratti explained to the Senate Committee on Government Affairs that thinking from the interim committee resulted in a suite of five and possibly a sixth bill meant to address the affordable housing shortage, a complex and multi-faceted problem that defies a silver bullet solution. 

“So when the Interim Committee on Affordable Housing was charged with taking a look at affordable housing, and the first thing we had to take a look at was, when you’re talking about affordable housing, what are you talking about?” Ratti said.  “Are you truly just talking about fixed rate low income housing, are you talking about the ability to buy a home, and really as we talk to Nevadans across the state, they are struggling in all areas of housing, whether that be first time home ownership, whether that be our workforce just finding an affordable place to rent, or whether that be our most vulnerable Nevadans who need supporting housing or just have a very low income level and can’t find a place to live.”

Home Ownership

“Nevada lags the national average of home ownership by behind the national average by five to ten percent, depending on where you live in the state,” Senator Ratti said.  “Right now the median home price in Clark County is about $265,000, and the median home price in Washoe County is about $350,000, but what we’re seeing is that home prices are rising rapidly.  If you just look at new listings and you look at the average price of those new listings, Clark County jumps all the way up to $350,000 for all the new homes that are listed or all the new listings for homes available, and Washoe jumps up to $447,000 as the average price for a new home.”

Senator Ratti said the good news is that wages in the state are rising at an annual rate of roughly 3 percent, but the bad news is that rate of increase lags behind the rate at which the cost of real property and rent are rising.

“What we see is that ownership is now out of the reach for over half of Nevadans.  They just cannot afford the median mortgage of $1,400 a month.”

The Missing Middle

Senator Ratti said she first learned about the “missing middle” from a report from the group Nevada HAND or Housing and Neighborhood Development

“So if we’re talking about people in our state who earn somewhere between 35,000 a year and $60,000 a year, these are folks as we probably as we just discussed are not able to consider home ownership, Senator Ratti explained.  “They also don’t earn a small enough amount of money to be considered for affordable housing programs, so they receive no help but they are also struggling to find some place to live. One fourth of the southern Nevada workforce is in that range, and particularly, if you are earning less than $45,000 per year, the ability to rent an apartment is increasingly out of reach.  Thirty-six percent of Nevadans can’t afford the median rent of $1,003 per month, and that’s if you can find an apartment for that much.”

In her comments the Senator defined housing affordability as not spending more than one third of your overall income on housing.

“What we find is that there are a significant number of people in our community who are what we call ‘rent burdened,’ meaning that they might be getting into a unit but they’re spend fifty, sixty and upwards of seventy percent of their income on their housing expenses,” Ratti said.  “That means they don’t have money left of to take care of their healthcare needs, enroll their children in extracurricular activities, all the other expenses the families or individuals face in the State of Nevada, so that’s the problem we’re trying to solve.”

Ratti said economic development in northern Nevada is, “firing on all cylinder,” and that has an affordable housing downside.

“All those new jobs and all those new individuals are raising the cost of housing, and so partially economic development is driving the cost of housing with the supply and demand equation really not working on the side of folks who need to find a place to live.”

Senator Ratti said a lack of affordable housing was affecting the region’s ability to attract new companies and jobs to Nevada.

“We’re starting to see that companies are questioning whether they should relocate to northern Nevada because they are not sure their employees will be able to find a place to live.”

According to Senator Ratti’s testimony, the lack of affordable housing hits the region’s  lowest income resident the hardest.

“The median income for the state of Nevada is about $55,000 a year, but we have a lot of Nevadans who make well below $55,000 a year, so if you earn 50 percent median area income, which would typically be described as being low income, qualifying for low income housing support.  That’s between $11 and $12 dollars an hour is what you’re making, so this is somebody that’s working. There are 39 homes for every 100 needed for that group of folks.

“If you take down to that next level, 30 percent of median area income, so now we’re talking about folks like one of my friends who is 67 years old,” Ratti continued.  “He’s on a fixed income from Social Security. His overall Social Security check is $853 a month, so he’s out in the housing market trying to find housing when his total income is $853 a month.  He would fall in the 30 percent median are income or below. For those folks, we have 15 homes for every 100 that are needed, so we are nowhere near meeting the need.”

Senator Ratti focused on another segment of the populace in need of affordable housing, those with intellectual disabilities, addiction problems, veterans with Post Traumatic Stress Disorder, or a young adult who is too old for foster care.  

“They are competing with the folks who are the lowest on the economic ladder for those 15 homes out of every 100 that we need, and so when we start talking about the issue of supported housing and we are investing a significant amount of state and local resources in substance abuse treatment, in mental health, in medical care if you have diabetes, but if you’ve lost the stability of your housing and you can’t find a place to live, all of that investment of supportive services gets undercut because you haven’t met your basic needs of housing,” Ratti told the committee.

As chair of the interim affordable housing committee, Senator Ratti said they took a close look at the various roles of governments from federal to local.  Interim committee members also considered the role of the private sector.  

“In general, at the federal government level, there’s wonderful programs like Section 8 vouchers that close the gap for some of our lowest income Nevadans, but there’s nowhere near enough,” Senator Ratti said.  “So right now, we heard testimony in the Affordable Housing Committee that there’s a 30 year waiting list. I’m just going to say that one more time, a 30 year waiting list to be able to get a Section 8 voucher to help purchase housing on the market if you are a low income individual.”

The senator pointed out that the federal government also offers low-income tax credits that incentivize the construction of new units.

“At the state level, we really looked at getting into the game enhancing that financing so we can accelerate building more units.  We looked at how do, how do we give good balance between landlord and tenants to make sure that if people do lose their apartment that they have time to establish themselves in another place.”

But SB103 is not about the federal or state governments.  It is enabling legislation for subsidiary forms of government in Nevada.

“SB103 makes it clear that local governments are enabled to do certain things.  Basically making sure local governments have the toolbox that they need to be able to be part of the solution to meet affordable housing needs,” Ratti said.

Regarding local government, the interim committee began by analyzing the effects of fees on the inclination of developers to build low-income housing.

“In local government, we have closed enterprise funds where we’re talking about how we pay for sewer fees, how we pay for our sewer systems, our regional road impact fees, the impact fees from development, and they’re all closed systems.

“Right now, NRS does not allow for local government to decide to, as one of tools in their tool box, allow for an affordable housing development. Either to contribute a portion of say a sewer fee or a development impact fee, so that the local government is helping that affordable housing development pencil is just not allowed, so what SB103 does is make that a possibility for local governments.

During her presentation Senator Ratti emphasized the fact that SB103 was not a mandate but enabling legislation, so municipalities are able to choose the best incentives for affordable housing for their market.  Ratti is a former Sparks City Council member and knows the role of city and county governments well.

“The market conditions in North Las Vegas versus Winnemucca versus the City of Sparks versus the City of Reno are often very different, and so a policy to waive a sewer fee may make tremendous sense in Reno right now with the housing crunch we’re experiencing and really targeting perhaps …. there’s a project right now that is a tiny house home specifically focused on folks with behavioral health issues might make sense.  They might chose to draft a very narrowly drafted ordinance that would help with that kind of a project or they could waive sewer fees or regional road impact fees or permitting fees in those kinds of instances, but that may not make sense in Winnemucca, or it may not make sense in Fernley, so again, this is enabling legislation to make sure local governments have the full tool kit if they choose to use it.”

A conceptual amendment was added just before the meeting that would enable local governments to use inclusionary zoning and rent controls as part of their affordable housing tool kit.  Senator Ratti said the amendment came with a caveat.

“If I were a city council member and I was considering using one of these tools, the first thing I would want to do is hire a third party economist to come in and look at our market and understand what the intended impacts  and the unintended impacts of these tools might be, but they are not appropriate at a statewide level because if we did something like say you would have inclusionary zoning across the jurisdictions in the state it may make sense in some markets and not make sense in other markets, so with this does is just put inclusionary zoning and rent control on the list of tools available to local government, but again, does not mandate anybody to use them.  They are there at the closest to the neighborhood level where land-use planning decisions are made, so if those local governments choose to become a part of the solution that those tools are available to them.”

Support for the bill during the hearing was categorical, with one person offering neutral testimony.  No one spoke against the measure.  Supporters to offer testimony included the Nevada Rural Housing Commission; Nevada Builders Association; Washoe, Clark and Lyon counties; the cities of Reno, Las Vegas and North Las Vegas; the Nevada Association of Counties; the Food Bank of Northern Nevada; the Nevada Realtors Association; the Nevada State Apartment Association and several other agencies groups and individuals.

One poignant story came from Erica Mineberry, a student of social work and a mother of three.

“I’ve never been wealthy but I’ve always been able to piece things together until 2018 of last year,” Mineberry said.  “No matter what I did, no matter how many jobs I was working at minimum wage, I was unable to piece together this puzzle.  That was impossible, and there were no resources available for me, so I had to make the painful decision to relinquish custody of my children to their father because I could not afford to put a roof over their heads.

“While that decisions has been nightmarish emotional turmoil for both me and my children.  I know that I am still lucky because they had another safe place to go. Even if I wasn’t there to protect them or read them a goodnight story and tuck them in at night.  If that resource wasn’t there, they’d be living in my car with me or we would be couchsurfing together.

“When I made that decision, I told myself it was only going to be 15 months until I graduate and be able to make a living wage.  In just 15 months I’d be able to get my kids back, my mantra to get me through this dark time, but in 15 months I’ve seen the housing prices not so slowly creep up.

“As it stands now, when I graduate in May, even if I get the most competitive of wages for an entry level social worker, I will still not be able to afford housing for me and my children.  This is my biggest fear,” continued Mineberry.  “I’ve done everything I could do to get out of this situation and rise above my circumstances, but I am powerless to stop it. I support SB103 because we need more affordable housing and we need legitimate low income housing in this community  I support SB103 because I need to be with my children, and my children need to be with me.”


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