Housing officials blame auctions, permitting for affordability woes

Kevin Rademacher

Tuesday, Sept. 28, 2004 | 10:37 a.m.

More than an hour of debate produced countless questions but no definitive answers on how to address Southern Nevada's growing problem of soaring home prices and the families being left behind.

Dwight Alexander, vice president for legislative and regulatory affairs for the Federal Home Loan Bank of San Francisco, said the gap between income growth and home prices is posing a serious threat to the economy.

Alexander's remarks came during a Monday roundtable discussion between local nonprofit executives and government officials, as well as federal lending leaders.

Homes, Alexander said, are the investment that is often leaned on for major financial events for U.S. families, such as funding college educations and retirements.

"It's becoming an increasingly important and increasingly difficult issue in Las Vegas and Nevada," he said.

In August, the median price of recorded new homes was $259,700, up from $238,957 in July and a year-to-year change of 26 percent, Home Builders Research Inc. reported this month.

The median price of recorded resales in August was $250,000, up from $247,490 in July and a year-to-year change of 45 percent, the firm reported.

Meanwhile, the average household income in 2003 was $44,307. A year earlier, that income level was reported at $45,607. Keith Schwer, a UNLV economist who compiled the figures for the Nevada Development Authority, said the decrease was attributable to sampling error, adding that the income level was essentially flat.

Gail Burks, chief executive of the Nevada Fair Housing Center, said that the widening gap between income and home prices have rendered most of the available subsidies obsolete. She said most eligible buyers -- who make less than 80 percent of the regional median income -- can get about $10,000 in assistance.

"Now you have a subsidy. Now you have a loan. Where do you go?" she said. "There's no affordable homes."

"I get that same thing," said Douglas Kuntz, affordable housing coordinator for the city of Henderson.

After the meeting, Candace Ruisi, executive director of the Women's Development Center, said that this is not a problem that is isolated to low-income residents.

"That's not who we're talking about," she said. "We're talking about entry-level teachers and nurses. People who work at casinos ... It really is affecting the quality of workers that come here."

One of the culprits in the rising home prices, participants at the meeting speculated, could be the auction system used to sell off developable land controlled by the Bureau of Land Management.

"Did we suffer inadvertently from the whole BLM auction thing?" Charlene Peterson, director of the Nevada Partnership Office of Fannie Mae, asked U.S. Rep. Shelley Berkley, D-Nev.

"In my opinion, yes," she responded. Berkley said the old method of disposing of federal land through land swaps created less frenzy and likely resulted in more stable prices for homebuyers.

Ruisi also lamented the failed effort by the city of Henderson to mandate an inclusionary zoning provision in 1,940 acres the BLM autioned off for $557 million in June after it was opposed by residents and developers.

Burks also joined in to encourage Berkley to push for a mandate would require the BLM to include zoning for attainable housing.

Peterson also encouraged local government leaders to streamline the permitting process for developers, allowing them to begin building at a quicker pace.

"There is a regulatory barrier in need of reform," she said. "When it takes a developer a year for processing and permitting ... that costs the developer a lot of money and they pass that on to the homebuyer."

Those costs associated with holding vacant ground for extended periods of time, as well as the cost of experts needed to complete the process, are combined with other rising costs for building materials, such as concrete and lumber.

"It seems we could try to reduce some of those costs," Peterson said.

The debate also is raging in Carson City.

Charles Horsey, administrator of the state housing division, agreed that the income of the low and moderate income families have not kept pace with the escalating housing costs.

Gov. Kenny Guinn said the price of housing "becoming a serious problem."

Guinn and Horsey said Friday that a major part of the problem in Southern Nevada is the price of land. Developers of upscale housing are buying the land, and those that build affordable housing can't compete in price.

"The key to the problem is getting land so the developer can afford to build houses for low-income and moderate-income families," Guinn said. He says he is starting to work on a plan to present to the 2005 Legislature. He did not give any details on what the plan may include.