The median price of a single-family home in Southern Nevada was $310,000 in September.
It’s the classic case of he said, she said.
On one side: legal counsel for the State of Nevada, whose position is that existing law allows cities and counties to pass affordable housing policies such as inclusionary zoning and rent control without approval from the state. On the other side: legal counsel for various cities and counties, who aren’t so sure about that interpretation and want clarification before embracing policies sure to be unpopular among deep-pocketed and litigious developers and builders.
One of nearly a dozen affordable housing bills currently making its way through the Nevada Legislature seeks to clarify the former’s legal position for the latter. Originally proposed as an amendment to a separate affordable housing bill, SB398 clarifies that county and city governments indeed have the authority to take action on ensuring the availability or affordability of housing.
The bill would open the door for county commissions and city councils to embrace inclusionary zoning or rent control policies, if they so choose.
The bill does not mandate any municipality take up such policies. However, the bill’s primary sponsor, state Sen. Julia Ratti, says she hopes cities and counties understand that an “all-hands-on-deck” approach is needed to address the severe lack of affordable housing across the state.
Ratti told the Senate Government Affairs Committee, which held a hearing for the bill Monday, that affordable housing advocates routinely report being thwarted by local governments whenever they attempt to promote policies like inclusionary zoning. Local governments insist they lack the authority to implement such policies. Their reasoning is Dillon’s Rule, which restricts the powers of local government to that which the state expressly gives them.
That interpretation contrasts with the legal interpretation of the Legislative Counsel Bureau, which takes the position that affordable housing policy falls under the umbrella of “matters of local concern,” which municipal governments are allowed to regulate.
Ratti said this “pissing match” between state and local legal opinions isn’t fair to the people in desperate need of affordable housing.
“Untie the hands of local government so they can leap in with vigor and enthusiasm,” she said. “Bring forward innovation.”
Ratti believes local government needs to play a role in affordable housing and that it isn’t the state’s place to “come in with a hammer” and demand everyone take the same approach.
“What happens in Elko is very different than North Las Vegas, than in Pahrump or Sparks,” she added. “You want these policies to be market driven.”
Affordable housing policies can work in a variety of ways. A city or county can pass an ordinance saying that if a developer wants to build 500 homes, then 10 percent of those homes need to be affordable for a family at median income. Some municipalities offer a “fee in lieu of” option, which allows builders who don’t want to incorporate affordable housing into their communities the option of paying a fee instead. That fee typically funds other affordable housing projects.
SB398 clarifies that all of these options, including “fee in lieu of,” are on the table.
The Nevada League of Cities, Clark County and the cities of Las Vegas and North Las Vegas are supporting the bill. Also in support are several nonprofits and agencies that work with low-income populations.
ACTIONN Executive Director J.D. Klippenstein told the committee that his faith-based nonpartisan organization helped establish the Washoe County Affordable Housing Trust: “We had to string together three statutes and mobilize 1,000 people to convince them it was the right thing and that they had the power. It should not have been this hard to create a tool that our county and city needs.”
Klippenstein said SB398 will mean “better conversation moving forward” because the authority won’t be in question.
Opposed to the bill are notable trade associations, including the Southern Nevada Home Builders Association, Builders Association of Northern Nevada, Nevada State Apartment Association, and Nevada Association of Realtors. Representatives for these organizations stressed their concern about how broad the bill is.
“We’d much rather see guardrails or parameters, so we know what we might see,” said Josh Hicks, a lobbyist on behalf of the Southern Nevada Home Builders. “It’s up to local government. It’s that uncertainty that brings us to the table in opposition.”
Hicks noted that trade associations typically support incentive programs such as tax credits and waiving of fees for affordable housing projects — both of which can be found in other proposed affordable housing bills this legislative session. It’s mandates like inclusionary zoning and rent control which they oppose because they believe they do not work as intended and negatively affect business.
Ratti addressed the bill’s opposition in her closing remarks, saying while it’s natural to prefer an incentive to a mandate, those haven’t been enough: “The market has not produced sufficient levels of housing for every income level.”
According to presentations made by Ratti in earlier committees, four out of 10 households in Southern Nevada are considered “housing burdened,” meaning they spend more than 30 percent of their income on housing. Among households earning less than $50k, seven out of 10 are housing burdened.
People classified as “extremely low income” are severely cost burdened, sometimes spending up to 80 percent of their income on housing.
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