Wednesday, Jan. 26, 2005 | 10:53 a.m.
Gov. Kenny Guinn's proposal in his State of the State address to make "homes more affordable for hard working Nevadans" is rooted in a never-used provision within the Southern Nevada Public Lands Management Act of 1998.
That section provides that land can be released -- at reduced prices -- to the state or local government jurisdictions for affordable housing.
The program has not found favor with local jurisdictions that have called it confusing, despite guidelines that were set in place last April to help facilitate the release of land.
But the governor, concerned about the cost of housing in the state, is working with the Bureau of Land Management and the Nevada Housing Division to obtain land under that same provision to build housing at a reasonable cost.
"We are a prosperous state, and we are building more condominiums, apartments and homes than at any other time in our history," Guinn said during his speech Tuesday evening. "Yet many working families are being squeezed out of the housing market."
The need for more reasonably priced or affordable housing has become more acute in the past year as the prices of Southern Nevada Homes have skyrocketed. At the end of 2004, the median price of a new home in the Las Vegas Valley rose to $290,287, while the median cost of a resale home was $250,000 -- both almost 40 percent more than the previous year.
Government officials are planning to focus on Clark County first because of the tremendous appreciation rates in housing, said Chas Horsey, Nevada Housing Division administrator.
Sen. John Ensign, R-Nev., through a spokeswoman, said he applauds Guinn's focus on affordable housing.
"I agree that we need to ensure that federal land is made available for affordable housing under the Southern Nevada Public Land Management Act," he said. "Although there are many details to work out, I'm confident that our congressional delegation, the governor, local governments, affordable housing advocates and the primary sector can come up with a legislative solution in Congress this year that will benefit Nevada families."
Guinn said Tuesday that his plan is that the price of homes would not include the value of the underlying land -- which in some cases can add anywhere from 20 percent to 25 percent.
He said the state has the opportunity to acquire the land at a minimal cost and that the land would be held in a "permanent state trust."
Homebuilding companies would be brought on board to build as many as 3,000 single-family homes and rental units statewide.
While Guinn's goals appeared to be clear cut during is Tuesday night speech, the details as to how the program would actually work are far from being completed.
How the trust would work, exactly who would be eligible to purchase the homes and whether a land lease would be involved are just some of the details that are being looked into, Horsey said.
Some of the ideas being discussed regarding the trust is whether the land would be owned by the state, the home buyer, or some combination of both, he said.
"What we're doing right now is working on an agreement that sets for the deal points, and it will probably have to be run up the flag pole all the way back to Washington D.C.," Horsey said.
One thing that is certain is that Guinn is hoping to get the land at no cost -- something local municipalities wanted but never got.
Under the current BLM guidelines, the type and scope of the housing project depends on how much the land would be discounted. In some cases the land can be reduced by as much as 95 percent of the assessed fair market value.
"The governor is willing to do whatever it takes," to get the land for free, Horsey said.
Jo Simpson, BLM, Nevada, spokeswoman, said while the policy does state there is a cost involved in obtaining the land, the actual law is much more vague and stipulates that the land can be made available for "less than fair market value."
BLM officials concede that the policy can be changed so the land can be made available at no cost to the state.
Who would be eligible to buy the homes also is being worked out.
Currently the BLM policy, under the Southern Nevada Lands Management Act of 1998, states that affordable housing would be made available to families whose incomes do not exceed 80 percent of the median income for the area (in Clark County the annual median household income is $54,700), with adjustments for smaller and larger families.
However, there is a provision that the Secretary of Housing and Urban Development can establish income ceilings higher or lower than 80 percent of the median income for the area because of prevailing levels of construction costs, area rents or unusually high or low family incomes.
Horsey said a critical component of the discussions with Guinn is that the state's teachers and nurses should be able to afford the houses, so adjustments may have to be made so they fall within the eligible range.
"With the escalation in prices it has made it impossible for these groups to buy in the state," he said.
Even what a possible neighborhood would look like is being ironed out.
One idea being floated is that to avoid large pockets of lower priced homes in a community, a mixed neighborhood of affordable and market-rate homes be developed.
State officials did not call those types of neighborhoods inclusionary zoning, or workforce housing, but the idea appears to have similarities to projects attempted elsewhere.
Workforce housing is a method that local governments can use to mandate that new neighborhoods provide a mix of housing products, allowing units to be built and sold to people in a specified income bracket who couldn't otherwise afford the average home price.
Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, said the industry would love to see everybody in a home -- but inclusionary zoning is not the way to go.
"Inclusionary zoning ruins the housing market," she said. "Does it get some people into some housing? Yes. Are the unintended consequences horrific? Yes. We would not support inclusionary zoning, we would support a plan that would put people into housing."
Caruso said the association and its member builders would be more than happy to meet with state and local officials about how to make an affordable housing program work.
"We look forward to working with the governor's people to hear what their plan is," she said. "There is a tremendous amount of work that needs to be done."
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