Las Vegas Sun

August 29, 2014

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Columnist Tom Gorman: The lack of affordable housing in an affluent city

Las Vegas, which has got to be one of the most architecturally innovative cities in the world, should be able to come up with a solution for affordable housing.

We can build billion-dollar resorts to drive our economy, and now we're on a tear to build high-rise condos so rich people can buy second and third homes. And good for them.

But amid this profitable gluttony, the very people who make this city work are being increasingly priced out of the housing market. This will only hurt us in the long run.

It's not necessarily the developers' fault. In most cities, growth is accommodated by buying land in the boondocks and extending utilities outward. As people with money move farther out to the nice new homes, the poor folks can find affordable homes and apartments in the neglected inner neighborhoods. It's a great market-driven system until it implodes.

But Las Vegas is different. It is surrounded by government real estate that is sold in dribs and drabs at highly competitive auctions. (There's one today, in North Las Vegas.) The government is getting top dollar from land-starved developers who pass on the cost to their customers.

We the taxpayers benefit, but we the homebuyers suffer. (I think the developers are doing just fine, thank you.)

If you haven't seen how small the lots are in our newest suburbs, take U.S. 95 north, get off at Durango Drive and drive around the still-wet subdivisions. Big, luxurious houses are crammed on tiny lots in what used to be the wide-open desert. Some of the yards are so small kids can't jump rope without scuffing their knuckles on stucco; driveways are too small for tricycles.

That's how upside-down the Las Vegas housing market is: If you want a big yard for the kids, and maybe a pool, look to our older neighborhoods nearest our urban core, such as it is.

I'm not sure how to provide affordable housing for our worker bees, so I dropped by the offices of the Southern Nevada Home Builders Association. If anyone should know how to build more-affordable houses, it should be homebuilders, right?

(The organization was founded 51 years ago by 12 competing homebuilders who decided that for their common good, they had to collectively lobby against increasing government intervention.)

I sat down with Monica Caruso, a transplanted New Yorker who is director of public affairs for the builders' group. That means she, among other things, deals with reporters.

She's been on the phone a lot with reporters from the Wall Street Journal and the Los Angeles Times and USA Today. "Why has the price of real estate skyrocketed?" they ask. "What's going on in Vegas?" they wonder. So for the upteenth time, Monica explains the dynamics of Las Vegas real estate.

I asked Monica: How would you create affordable housing?

Builders, she said, should be allowed to build 800-square-foot homes with two bedrooms, a bathroom and a carport.

But there's no political will to pursue super-small, single-family homes. Homeowner groups and advisory planning boards won't embrace smaller homes, she speculates, in part because they might diminish the value of houses in abutting neighborhoods.

Moreover, government officials worry that tracts of mini-houses "will end up being the slums of tomorrow," she said.

Monica and I both worry about another unsettling prospect if nothing is done: that struggling workers may start overcrowding homes the way I've seen it occur in Orange County, Calif.

In Santa Ana, it is common for 10, 15 even 20 people to share a home. There's one family per bedroom, and maybe another one or two living illegally in a garage. They fall over each other using the kitchen and bathrooms, and the living conditions are horrid.

We can't allow that to happen in Las Vegas.

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