Silver linings
Nevada’s affordable housing forecast isn’t all doom and gloom.
Nearly 1,150 affordable homes were built or preserved last year by leveraging federal tax credits, several hundred more than in 2016. Another 2,800 tax-credit homes are in the pipeline for Clark and Washoe counties.
“That’s a really good sign,” Nevada Housing Division CFO Michael Holliday said. “If that (pipeline) number was bigger every year for the next 10 years I’d be a very happy camper.”
“When there’s a boom time developers try to capture the market in the most profitable segment. And the most profitable segment is not on the lower end,” he said. In Las Vegas “most builders are building ($300,000 homes) and above, and people can’t afford them because they can’t afford the down payment.”
Market strain
The increase in renters has put a strain on market rate and affordable rental homes alike.
The typical Las Vegas rent rose to $989 a month last year, surpassing its pre-recession peak of $925, according to the CBRE commercial real estate firm.
Aichroth said there’s “effectively zero vacancy” at rent-restricted apartments built through the federal tax-credit program. Meanwhile, the Taking Stock report shows waiting lists for these rentals topped 10,000 names last year, compared with about 5,700 in 2014.
Officials say creating affordable housing doesn’t always mean building new apartments. Most low-income families have a decent place to live; they just need to find a higher-paying job or rental assistance to make it affordable.
But there remains a great demand to construct rentals serving families making less than $63,000 a year, the state’s median household income for a family of four.
“We need to build about 8,000 units a year for the next 10 years to close the gap. We’re only able to produce about 2,500 to 3,000 units in a great year,” housing division CFO Michael Holliday said. “We do the best job we can with the tools we have, but in the overall picture we’re not making a huge impact.”
Beyond their means
As a growing number of Nevadans compete for housing, the state’s poorest are occupying homes not meant for them.
Only 4 percent of Clark County’s tax-credit homes are designated to be affordable to households making below $25,000 a year. In reality, these families rent one-third of such homes.
As a result, the Taking Stock report notes, “there are likely to be households living in tax credit properties that are experiencing some degree of rent burden albeit less than if they had been in market rate housing.”
Nevada HAND CEO Mike Mullin, whose nonprofit builds and manages tax-credit properties, called it a “built-in dilemma.”
“The rent is set at a point where it is low enough to serve the people who qualify but high enough to cover debt service and operating expenses so we don’t close down,” he said. “There’s not a monthly operating subsidy, so people have to be able to pay their rent.”
Looking up
Though the outlook is bleak for Nevada’s residents, things are looking up for Harris and her family.
With rental assistance they can afford not only their bills but also the occasional trip to bowl or eat at Golden Corral. Last week Harris’ 17-year-old daughter, Seantaja, picked out a purple dress for prom.
Harris said she realizes Hopelink can’t help her family forever. She’s filling out job applications every day in hopes of landing a better paying full-time job.
“My kids make me want to go forward,” she said. “They didn’t ask to move here.”
Contact Michael Scott Davidson at sdavidson@reviewjournal.com or 702-477-3861. Follow @davidsonlvrj on Twitter.