Las Vegas Sun

March 29, 2024

Lawmakers debate affordable housing funding

CARSON CITY -- A legislative study committee agrees more affordable housing is needed for low-income families, but so far it can't decide how to get the money.

The committee, meeting by tele-conference in Las Vegas and Carson City Tuesday, was asked by Ann Harrington of the Affordable Housing Resource Coalition to boost the real estate transfer tax.

Harrington, of Reno, told the committee that raising the tax by 10 cents for each $500 of value would bring in an extra $1.3 million a year.

That money, she said, could finance an additional 300 units of affordable housing.

When property is sold, a transfer tax of 65 cents for each $500 of value is assessed. Of the total, 10 cents goes to a state fund for affordable housing and the rest goes to local governments.

Adding 10 cents to the state fund would mean $3 million a year.

Harrington's proposal, however, drew opposition from Pat Coward, representing the Nevada Real Estate Association.

Coward said the increased tax would have to be added to the purchase price of a home. And he said people in the lower income brackets typically spend a greater percentage of their resources on housing than do individuals in the upper income range.

In addition, Coward said, the revenue isn't stable as the housing market rises and falls during shifts in economic times. He said only a few people pay the tax every year.

It was estimated at the meeting that a 10-cent increase would mean $20 more in the sale of a $100,000 home. But Coward said there's a "global picture," where other increases are being considered to pay for streets, sewers and other services, particularly in Southern Nevada.

Committee member Robert Nielsen told Coward, "It's time that we as a state step up to the plate and realize that we have to provide housing for people in service industries that we are supporting to come into our communities.

"And the (real estate agents) are part of that group of people that need to step up to the plate and attempt to get the job done."

No vote was taken, but Assemblywoman Barbara Buckley, D-Las Vegas, proposed an alternative.

"Many times incentives work better than increases in taxes," said Buckley, who chairs the study committee. She suggested the state might give a tax credit to businesses if they invest in affordable housing.

"The idea of passing an additional tax increase, even when it's for a worthwhile project, may not get the support of the Legislature," Buckley said.

The tax credit might work, she said, in light of some proposals in Congress to eliminate the federal low-income tax credit program.

"That would eliminate one of the only subsidy sources for affordable housing projects so we may not be able to build senior citizen projects in Las Vegas and that's a scary thought," she said.

She asked the staff and others to help develop a state tax credit plan and present it to the next and last meeting of the committee in June. The committee will adopt its final recommendations for the 1997 Legislature.

The committee had been considering a suggestion to allow the state to sell its land at a discount to nonprofit developers of affordable housing.

But it learned Tuesday that provision is already in the law. The only problem is the state doesn't have any land to sell. But committee members said the discount plan can come into play if the federal government turns over land to the state.

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