Affordable senior housing program takes another step toward viability

J. Craig Anderson

Friday, Feb. 17, 2006 | 12:32 p.m.

A Clark County pilot program that could be crucial to easing the area's affordable housing crisis is advancing, but county officials say there are still serious obstacles ahead.

The county's community resources staff breathed a collective sigh of relief in January when nine developers responded to their request for proposals to build a low-rent apartment complex for seniors.

Community Resources Manager Douglas Bell said his division is recommending the project be awarded to Nevada H.A.N.D. Inc., a nonprofit developer with experience building affordable apartments. The County Commission is scheduled to select the winning bidder on Tuesday.

County officials had been concerned that builders would not be interested because the affordable housing project, to be built on Bureau of Land Management land using federal and state subsidies, is the first of its kind and will require a lengthy and multifaceted approval process with no guarantee of success.

"We need agencies, either nonprofit or for-profit, who are willing to work with us as the guinea pig," Bell said.

The project would create an apartment complex with up to 105 units for seniors whose annual income is no more than 80 percent of the area's median income. Median annual income in Clark County is just under $30,000, meaning if the project is completed, the maximum allowable income would be about $24,000 a year.

The county has chosen a 5-acre section of BLM land on the north side of Harmon Avenue just east of Jones Boulevard.

If the project succeeds, it could lead to much larger projects to build affordable apartments and homes for low-income residents of all ages, Bell said.

However, that lofty goal is still a long way off.

Once a developer is chosen for the test project, Bell said, the next step will be drafting a development agreement that must be approved by the County Commission, BLM and the Housing and Urban Development Department.

At the same time, the winning bidder will have to apply for millions of dollars in state tax credits which would offset the cost of the project. The builder will face stiff competition for those state subsidies, he said, and there are limited funds available.

"You won't have a deal without the tax credits," Bell said, adding that he is recommending Nevada H.A.N.D. in part because it has applied successfully for affordable housing tax credits in the past.

Under the Southern Nevada Public Lands Management Act of 1998, the federal government can't sell BLM land at a discount for affordable housing projects directly to a developer.

A local government entity must buy the land and then transfer it to the builder, which Bell said puts the county in the awkward position of being a partner in the real estate deal.

"It takes government out of its comfort zone as a regulator," he said.

Clark County would prefer to have the BLM sell the land directly to an interested developer. The federal agency also has its own due diligence process that can delay the developer from getting control of the site for up to six months.

The rules also require the county to monitor the project as it progresses - including after it has been built and is occupied - which will take a lot of work without any additional staff.

"But before you can justify additional resources, you have to prove it can work," Bell said. "It's the old chicken and egg."

Similarly, the county can't argue that the federal system is broken until it has made a real effort to work within it, he said.

Despite the many obstacles ahead, Bell said, it is crucial that the county forge ahead with attempts to build more affordable homes because few others will.

"This is a serious, very serious issue," he said.

J. Craig Anderson can be reached at 259-2320 or at craig@lasvegassun.com.