Q-and-A: Real estate development changes, challenges abound for Reno-Sparks

RENO, Nev. — This year, the city of Reno celebrates its 150th anniversary. With that in mind, the Northern Nevada Business Weekly spoke with a few long-standing companies that have been doing business for decades in and around the Reno area.

One such company is Lewis Apartment Communities — overseen by the Lewis Group of Companies — which has been developing communities in Northern Nevada for more than 45 years.

One of the original developers of the Damonte Ranch master-planned community, Lewis Group of Companies has developed more than 11,000 apartment homes in Nevada and California combined.

The NNBW recently spoke by phone with Robert Lewis, president of the Lewis Group of Companies’ Nevada Division, to talk about the past, present and future of business in and around the Biggest Little City.

NNBW: How long have you been doing business in the region?

Robert Lewis: We’re going on close to a little over 45 years. Our company started in 1955 in Southern California and we opened up our office in Northern Nevada in 1972 and we’ve operated continuously since then.

NNBW: How have you seen the city of Reno evolve over that span?

Lewis: When we first came to Northern Nevada, it sort of matched its slogan — the Biggest Little City in the World. And back then it seemed like primarily it was a gambling town. There was a little agriculture and a fair amount of warehousing. It was mainly local homebuilders, not the public companies that you see now. We’ve turned into a pretty desirable place for people to live. We’ve seen this whole shift where gaming and gambling is not that important in Northern Nevada. I think warehousing in still strong, but what’s really been different lately is we’re seeing some high quality technology jobs — like Tesla, Switch and Apple. You’re seeing a whole different labor force come to town. It’s been interesting to watch it grow.

NNBW: What’s the biggest change you’ve seen in real estate development?

Lewis: Probably one of the biggest is its become a lot more sophisticated. I think when we first came to town were just doing single-family detached houses. Everything was pretty much the same, none of the innovative or creative stuff you’d see in Southern California or Phoenix or somewhere like that. I think now you’re seeing the same product being built in Northern Nevada that you’d see in any other area. It’s like we’re not behind the times anymore design-wise and in terms of community planning. Now you’re seeing a lot more diversity and more intensive development and in a lot of cases better style and more amenities. If you look around, we offer planned communities that offer as good of a living environment that you’d see in California. That’s what we’re trying to do with ours.

There’s a need for people who want to rent as opposed to own; they are looking for amenities and a higher level of service and that’s something we want to provide. In the old days, if you can’t afford a house you’re going to live in an apartment. That’s no longer what the world is like now. You have a lot of people and it’s a lifestyle choice that they want to rent as opposed to own. There are a lot of people who are renters by choice so what they are looking for is more than just a space to put their bed and a TV, they are looking for a community. Just as an example, the projects we’re doing, we now have a little dog park in each one, dog washing stations. Pets are an important part of their lives, just because they’re in a rental community they don’t want to sacrifice having a pet.

NNBW: What’s the biggest challenge facing the city of Reno and Northern Nevada as a whole when it comes to the economy?

Lewis: In my real estate development world that I’m in, I’m finding there really is a tight labor supply. Through the depths of the recession, things slowed up as far as real estate development went. A lot of your workers left town looking for work elsewhere. Almost overnight, with Tesla and Switch, you have a huge influx and expected influx of people coming to town and you don’t have a enough labor supply to accommodate all the new companies coming in. That’s one of the things we’ve been struggling with.

Also, the costs have been coming up fairly significantly. Lumber prices spiked up, steel prices spiked up … these are all things that affect the affordability of housing. Housing has gone up considerably and probably gone up more than incomes have gone up proportionally. That’s been a challenge.

I think as far as the Reno area goes and the economy, it’s a real positive thing that you’ve seen us diversifying. You hate to have an economy that is dependent on one or two industries. You want to keep attracting companies to town. But you have to make sure the university and colleges and elementary and high schools are able to provide the educational needs for these people. We have concerns about adequate water and adequate capacity in our sewer systems — these are things that kind of go with growth anywhere.

NNBW: How should city officials and community players tackle the housing issue to set the region up for success for decades to come?

Lewis: One particular unknown is what’s going to happen with interest rates because that’s going to have an effect on housing. Interest rates have been extraordinary low; it allows some to buy more house for their money. We anticipate that the interest rates are going to go up, and housing sizes or lot sizes are going to have to shift. Something is going to have to change to keep things more affordable.

I think the biggest thing is recognizing that they don’t want to be an impediment to the developments; allow private developers to provide the housing that’s needed. If they do their job and say we’re going to provide what’s necessary. And a lot of times its investing in the infrastructure to make sure our road systems are adequate, to make sure the sewer system or power needs are met; that we have developed things that are able to accommodate any growth that comes. You hate to always be in a catch-up mode. I think one of the things local government can do is advanced planning and make sure we do our part to be ready.

Editor’s Note: This interview has been edited and condensed for clarity.