City of Las Vegas raises limits for affordable housing help

Jennifer Shubinski

Thursday, Dec. 11, 2003 | 11:14 a.m.

The city of Las Vegas is making it easier for low-income people to buy homes.

Officials Wednesday said they're providing more money for down-payment assistance and easing some home-buying rules regarding applicants' assets.

The city's Neighborhood Services Department also will issue a request for proposals for nonprofits to administer its downpayment assistance program by the end of the year or early next year.

The issue was discussed Wednesday at the second city of Las Vegas panel discussion on affordable housing. The discussion was organized by Mayor Oscar Goodman to bring together businesses and nonprofits to find a way to ease the affordable housing crunch in the Las Vegas Valley.

A common compliant of many advocates is that if low-income home buyers have managed to save money for a down payment, that can often disqualify them for any assistance in buying a home.

The city is changing the asset cap for applicants from $5,000 to $10,000, said Sue Prescott, Neighborhood Development supervisor. That cap, effective early next year, is on top of items such as furnishings and automobiles.

"The goal is to put people in houses and keep them in those homes," said Faye Johnson, manager of the city's Neighborhood Development department.

Panelist Carmen Rodriguez, a sales manager and loan officer for Wells Fargo Home Mortgage Inc., said the reality is that most low-income home buyers have little or no money saved for a down payment.

The changes to the asset limits follow a change earlier this year increasing the amount of down payment assistance available from $5,000 to as much as $10,000 for some home buyers.

Before the change in down payment assistance, the highest amount potential home buyers making 80 percent of the median income could obtain through the Neighborhood Services Department was $5,000.

Someone making 50 percent or below of the average median income, under the old rules, could be eligible for up to $10,000 in down payment assistance.

Now people making up to 80 percent of the average are also eligible for up to $10,000 in assistance.

The median income calculations are based on U.S. Department of Housing and Urban Development rules.

The annual median income for a family of four in the Clark County area in 2003 is about $54,700.

While potential home buyers at the upper end of the income scale are eligible for assistance, the program is really aimed at the lowest income earners.

"We try to get those that are the most needy," said HUD official Ken LoBene. "It all depends on their assets and other things. As they have more assets, the down payment (assistance) gets reduced."

The assistance from the city is given as a deferred loan. If the home buyer satisfies a series of requirements, including not selling the home, for a period up to five years, the loan is forgiven, Prescott said.

Johnson said the changes are necessary because even with the assistance, people were unable to buy homes.

"Because housing prices keep going up so high, we couldn't get anyone into them," she said. "The $10,000 brings the price down so the loan is less. But sooner or later I don't know how we're going to serve those people if prices keep going up."

The changes come at a time when many advocates for home buyers have said the assistance given by different organizations does not cover the rising costs of homes in the Las Vegas Valley.

The median price of a new home in the Las Vegas area in October, the most recent statistics available, was $206,852. The median price for a resale home in October was $172,000, Home Builders Research Inc. reported.

Panelists said those prices are out of reach for most first-time home buyers.

Rodriguez said as prices go up so does the amount needed for a down payment, and the assistance given by nonprofits and through government programs is often not enough.

"A lot of our clients don't have $1,500 to $2,000 (for a down payment) and that prices them out of the market," she said.

Also discussed Wednesday was the difficulty of building of affordable, or reasonably priced, homes near or in established communities.

In Las Vegas, more than 95 percent of all new single-family detached homes are priced above $150,000, research firm SalesTraq has reported. Only two new homes were listed this week in the Las Vegas area below $100,000 -- and both were around 500 square feet. The average size of a new home in the Las Vegas area is more than 2,100 square feet.

"Deep seated prejudices are hard to overcome," Goodman said. "NIMBYism (Not In My Backyard) is alive and well in Las Vegas.

"Everything we do in the city has that element. Sure it's a great idea, but not here."

"Inclusionary zoning" was discussed as a way to bring more affordable housing to the valley.

Inclusionary zoning is land restrictions that force a home builder to build and sell a certain percentage of affordable homes in each development it builds. Concessions such as reduced or waived fees or higher density are often given to the builders in exchange for building and selling some of the development's affordable houses.

The idea is to provide affordable -- and equal -- housing even for those who cannot afford it.

The practice has been in use in cities across the United States for about 30 years, and has most recently been discussed in Henderson.

Goodman said he had not heard of inclusionary zoning before Wednesday's panel discussion, but said it was "very interesting" and that he would look into it.

Candace Ruisi, executive director of the Women's Development Center, said inclusionary zoning would receive a lot of resistance in the valley's communities.

"It's prejudice about who is going to buy those homes, as if they are not good enough to live there. It is a real fear," she said after listening to the panel discussion.

Panelist Corey Craig, with the local office of mortgage lender Fannie Mae, said in other communities it is not people without jobs or the homeless moving into houses built through inclusionary zoning ordinances.

"It's entry-level teachers, your children, not people they need to fear moving into their neighborhood," she said. "Inclusionary zoning will work if people open up their eyes to it."