RENO, Nev. — For years, the Reno City Council has heard from concerned citizens about arguably the Biggest Little City's biggest problem: affordable housing.
After all, Reno's housing demand is growing, supply is shrinking and rates are rising. Case in point: the median sales price for an existing single-family residence in Reno-Sparks this August was $399,000 — an 8 percent increase from August 2018, according to the Reno/Sparks Association of Realtors.
“There have been frequent people showing up to the council to say that rents are getting exorbitant,” Bill Thomas, assistant city manager, told the NNBV. “It's very difficult for people to find places to live. The price of housing has gone way up beyond the wage increases, so it causes a major social stressor in our community.”
Reno Mayor Hillary Schieve's “1,000 Homes in 120 Days” initiative is designed to help change that. Approved by the Reno City Council on Oct. 2, the pilot program aims to accelerate the construction of a thousand townhouses, apartment or condominium units, according to the city.
HOW DOES THE PROGRAM WORK?
The city, Thomas said, would defer sewer connection fees and road infrastructure impact fees until the back end of a developer's project. In other words, “it's really pushing back the date a developer would have to pay us back,” he added.
Don Tatro, CEO of the Builders Association of Northern Nevada (BANN), told the NNBV the cost of fees to build in Washoe County are “extremely expensive.”
According to the city, the program's deferrals could save a developer up to $8,400 for every single unit.
“We're at $50,000 a unit in fees,” Tatro said. “So, if you're allowed to defer that to a point of time with the city, it could have a real impact. I've talked to quite a few builders and, as they learn more, I think there's an appetite to do it.”
Tatro emphasized that the program is not a giveaway. Builders who take advantage of the deferrals, he said, will have to pay the fees they owe the city, adding: “It's not some bait-and-switch where somebody can walk away and leave people hanging.”
If a project were to go belly up or the builder doesn't pay its due fees, Thomas said the city would be able to put a lien on the project, and still have the ability to collect the money.
COUNTDOWN TO JAN. 30
To be clear: the program's goal is not for a thousand units to begin construction in 120 days. Rather, proposals to use the program must be submitted to the city within 120 days of the initiative's launch — Oct. 2, 2018. The developer has to already own the land and a project must have 30 or more units to be eligible.
“By January 30, 2020, the 120 days will be up, and the idea is to have hopefully a thousand (units),” said Thomas, noting that approved projects must break ground within 18 months. “If there's more than that, we would certainly go back to the council and see if they're willing to do more.”
“We really wanted to target people who already had control of land,” he continued. “If you've already got some concepts and hopefully pretty far down the road, we want you to start now. It's all about, what can we do to get people to start construction of housing units sooner rather than waiting.”
WHERE WILL THEY BUILD?
In terms of where the housing will be built, the city has mapped out specific areas of Reno where projects would qualify for the program.
“One of the objectives the city's had for a long time is trying to bring housing to downtown because there were a lot of underutilized land and blighted areas,” Thomas said. “So what we did is we looked for some geographic boundaries that seemed to make sense.”
“They're looking to spur infill development because infill is really expensive,” Tatro said. “So, to help with those capital costs, this could impact that infill scenario.”
AFFORDABLE HOUSING IN PLAY?
While affordable housing in Reno is a serious need, Thomas said projects do not have to have an affordable housing component in order to qualify for the program.
He said the feedback they received from the housing industry is that it's “very hard” to make any housing work right now, and affordable housing “makes it even harder.”
“It's tough for us to make people provide the most difficult thing they can do, which is affordable units,” said Thomas, pointing out that the city does have affordable housing development programs. “It's not like we're giving up on affordable housing. We just can't do it at this kind of scale.
“Right now,” he added, “this is really about just getting more houses built, under the assumption that — in a market economy — supply is ultimately the answer to help stabilize rent increases.”