Growing Pains: Many groups at work to ease housing shortage |

Growing Pains: Many groups at work to ease housing shortage

Sally Roberts
Q&D Construction begins excavation work at the Park Lane development on the corner of Plumb Lane and S. Virginia Street. The 46-acre in-fill development by Reno Land Inc. will ultimately include 1,600 apartment units, as well as retail and several parks, with move-ins expected to begin by the end of 2018.
Sally Roberts/NNBW |

Eighty-four projects will add more than 10,000 new homes and apartments to Reno-Sparks in the next couple years, according to data from the Center for Regional Studies at the University of Nevada, Reno.

Dozens of additional projects have approvals but have not yet broken ground. And more are moving through the approval process.

Nevertheless, it’s not enough to keep up with the demand of a vibrant economy that is attracting new residents.

More than 40,000 jobs have been added to the region since the end of 2014, according to the Economic Planning Indicators Committee (EPIC) report. That’s an 11.8 percent gain. The population has increased by 4.7 percent in the same period in the study area, which consists of the counties of Washoe, Carson City, Douglas and Storey.

The economic boom in the region can be exciting to watch, but it also has put a strain on housing.

“What we have is a lot of issues, a lot of strategies, a lot of suggestions,” Reno Assistant City Manager Bill Thomas stated in the July 26 city council meeting.

“We need more redevelopment of our land base and it needs to be higher density than it has been before,” he said.

The Economic Development Authority of Western Nevada (EDAWN) has been at the forefront of attracting new companies to the area. With the decrease in the unemployment rate — a low 4.2 percent in July — EDAWN is adjusting its tactics.

“We no longer have adequate workforce for really big employers … and have adjusted our attraction efforts to focus on higher paying jobs, which include technology companies, advanced manufacturing and company headquarters,” Mike Kazmierski, president and CEO of EDAWN, said in an email to the NNBW. “These all are generally smaller, especially technology companies. As for start-ups, the attraction and growth of start-ups has always been a part of our strategic plan.”

That bodes well for a more comfortable growth in the future. But for now, housing is tight.

The price of housing has skyrocketed — climbing at one of the steepest rates in the country.

The average rent for an apartment is now $1,194, according to Jackson Perkins Griffin’s second quarter 2017 report. With a vacancy rate of 1.17 percent and dropping, owners are raising prices. Some of those price increases are going into remodels and improvements delayed during the Great Recession, but it strains workers’ ability to afford them.

The market for single-family houses is similarly squeezed.

The Reno-Sparks Association of Realtors report states the median price of an existing home was $357,500 in July, up more than $57,000 since the end of 2016, when the median housing price was $300,000.

The months supply of inventory is at 1.6 in July compared to 2.7 a year earlier. A month’s supply of inventory is the time it would take to exhaust the active inventory at the current rate of sales. Five to eight months is considered a balanced market.

Governmental bodies are making housing a priority, but there is only so much they can do, Aric Jensen, the community development director for the City of Reno, told the NNBW.

“The roll of the municipality is not to provide housing but to ensure that what is being built will be beneficial to the city,” he said.

Jensen added multiple surveys of developers indicated that land prices, labor costs, and materials drive their costs up.

“Typically in that order,” he said. “The city side (of the costs) is not one of those factors. If we could magically reduce fees, it still wouldn’t address the top three costs.”

What they can do is ensure developers don’t get bogged down in delays in the permitting process. Jensen said the policy for the city’s planning department is to turnaround project plans within 10 days for the first submission and three days each time a project submits revisions.

“That’s very very fast,” he said.

Ensuring zoning is realistic also shortens the process. He gave the example of the Park Lane project, which began construction last week. Even though the project will construct 1,600 apartment units on property where a mall formerly stood, zoning was adequate for the project and no special use review was needed.

Those accommodations for developers provide “predictability,” said Jensen, who previously was a developer in Salt Lake City before coming to Reno. “Risk is some of your biggest costs.”

Providing cost cuts for permit, sewer or impact fees for developers has been proposed to encourage construction of low-income housing. That’s not practical, Jensen said. The fees are based on real impacts.

“We would have to charge someone else an increased fee to recover the costs to the city,” he said.

Several months ago, the city changed it policy on when impact fees are collected, deferring them until the developer has a certificate of occupancy instead of when the building permit is pulled.

“That has huge cash flow benefits,” Jensen said, without costing the city needed funds.

One of the more creative options the city is looking into, he said, is partnering with large companies to provide workforce housing — companies like Panasonic that have expressed concern about their workers finding a place to live.

Some residents have suggested putting the brakes on the growth.

“While there are challenges associated with growth, it is the growth itself that gives us the resources and the motivation to address these challenges and develop viable solutions,” Kazmierski said. “A no-growth attitude that some NIMBYs (not-in-my-back-yard) promote is just an effort to cling to the past (a past that had 14 percent unemployment and rampant foreclosures just a few years ago) rather than embracing this opportunity to evolve into the Reno-Sparks of the future; one that will be attractive to our grandkids and give them the opportunity to have a great job and enjoy the region in the years ahead.”

With so many working to ease the housing shortage, Kazmierski considers current conditions a temporary glitch.

“We have been working on encouraging more affordable/workforce housing now for over two years and there are many projects in the works,” he said. “Also, there are many investors interested in our growing housing demands and several innovative solutions are being considered to help us address this growing demand.”