Gov. Steve Sisolak tours Decatur Commons, a Nevada HAND affordable housing development under construction. (Photo: Michael Lyle).
Even though the 480-unit complex Decatur Commons won’t be completed until at least January, there is already a list of more than 3,000 people interested in applying for one of the income-restricted apartments.
Gov. Steve Sisolak toured the structure Tuesday to get a better understanding of the project and the crucial role it and developments like it could play in addressing Nevada’s housing crisis.
The Nevada Housing Coalition estimates the state has a deficit of more than 105,000 affordable units, and is short roughly 84,000 units for extremely low-income renters, or those earning 30% or less of the area median income.
“Last week, the list was 2,500 and this week it is 3,000 people wanting to get into this (complex). It’s an overwhelming demand for housing,” said Tim Veenstra, the Chief Operating Officer for Nevada HAND, the nonprofit developer constructing Decatur Commons at South Decatur Blvd. and Alta Dr. “We have the biggest gap in Nevada between the supply and demand for affordable housing of any state. Building is really the only way out.”
But creating affordable and low-income housing isn’t politically easy, and runs up against logistical obstacles from land availability and zoning restrictions to, most daunting of all, financing.
In order to develop the complex, which cost $110 million, Veenstra said it took years of planning and required “multiple layers of financing” ranging from bank loans to government funding.
“This has been under design and in planning stages for years,” he said. “A big chunk is putting up the financing for this. There are about seven pieces of financing from loans, government loans, bank loans and tax credits that come together to make this happen. It’s a multi-year project with about 12 to 18 months of construction. We will be ready in January.”
Between the State Infrastructure Bank, which was revised in the 2021 legislative session and could provide loans and state assistance for a variety of projects like affordable housing developments, and $6.7 billion provided to Nevada from the American Rescue Plan Act, $338 million specifically set aside for housing, some of the funding gaps could be alleviated, meaning the state might finally put a dent in its housing needs.
“The ARPA money will be able to condense and shrink those financing timelines quite a bit and make it easier,” Veenstra said. “If we keep building 10 of these (housing projects) a year, that will be 5,000 units a year.”
Neither funding component includes the proposed $332 billion outlined in the Senate Democrats’ $3.5 trillion budget resolution package that could also go toward the creation of affordable housing.
Christine Hess, the executive director of the Nevada Housing Coalition, said the two already available funding sources provide a historic opportunity and that the state is finally “poised for progress.”
“Our opportunity is now. You hear our leadership really centered on housing in their conversation and engaged in housing,” she said. “We are set to make some progress, but what I will say is it’s not quick enough. The investments aren’t for today, and we have Nevadans struggling today.”
‘Once-in-a lifetime opportunity’
When completed, Decatur Commons will include 240 units for seniors and 240 units for families and would provide rentals for different income levels.
“They are all income-restricted units, from 30% of the area median income from that household up to 80%,” Veenstra said. “It’s a little bit wider than your normal affordable housing.”
There is already a need to develop additional housing complexes and the projects Nevada HAND is able to develop fill up quickly.
“All of our units, our 4,200 units across our portfolio, are full,” Veenstra said. “Every unit is occupied. We are getting about 2,000 calls a day for people seeking housing across our portfolio. It’s just incredible the demand for affordable housing. We have a lot of difficult conversations for people who are really in a difficult situation and need housing and we are full.”
He added that sometimes people are lucky and are able to get into a Nevada HAND unit within a few weeks. But under worst case scenarios, for units “that are income-based, truly sliding-scale rent, the wait list for that kind of housing is two, three years or more.”
“We run the gambit,” he said. “Right now, we aren’t projecting very many vacancies to occur for the rest of the year.”
When the Clark County Commission met in July seeking community input on how it could use its separate $440 million in ARP funds, Nevada HAND said there were various projects it could not only develop, but do so much faster.
On Tuesday, Veenstra said the nonprofit is submitting “pre-proposals and preliminary concepts” but wasn’t able to provide specifics.
In order to make Decatur Commons a reality, Nevada HAND needed funding from:
- Construction financing from Wells Fargo and Citi Community Capital;
- A Nevada Housing Division Growing Affordable Housing Program loan;
- U.S. Housing and Urban Development HOME Funds,
- The federal Low Income Housing Trust Fund;
- AHP funds from Federal Home Loan Bank of San Francisco;
- Clark County and City of Las Vegas Home Loan acquisition financing from the Community Housing Capital.
But the project was developed prior to the infrastructure bank being revised or ARPA funds.
State lawmakers passed Senate Bill 430, which expanded the definition of what types of projects could be financed through the State Infrastructure Bank to include items like affordable housing, food insecurity, public education and health care.
“We need the soft financing and gap financing sometimes to cover operations costs,” Hess said. “Those are some possibilities for the State Infrastructure Bank. As the State Infrastructure Bank develops, those are things the affordable housing community is definitely going to be looking to, to essentially make sure we are getting a gap filled in our financing needs.”
In addition to touring the construction site for Decatur Commons, Sisolak hosted a roundtable discussion Tuesday with members of the Housing Coalition in order to get a sense of how either the infrastructure bank or ARPA funds could be used in future housing projects.
“Hopefully in the future, we’ll be able to expand the infrastructure bank,” Sisolak said. “Affordable housing is one of the big things we want to address with the money we have from the federal government. I don’t want to just spend it. I want to invest it in a way we are going to get ongoing returns. This is a once-in-a lifetime opportunity.”
While the state is looking to federal funds to help address numerous historic problems, Sisolak said state and local policymakers need to see details explaining the effectiveness of proposed projects.
“Affordable housing is an issue. Homelessness is an issue. Food deserts are an issue. Mental health is an issue,” he continued. “If you have a unique problem and you can quantify how much it would cost to subsidize a (housing project like the one being built) and multiply that times 10 or one hundred — how much are we talking about, and what impact will that have on the affordability of housing?”
In an interview following the roundtable discussion, Hess said the Nevada Housing Coalition will be rolling out its recommendation for affordable housing funding recommendations to the state later this month, specifically looking at areas ARPA funds could be used to address housing.
The coalition, she said, sought input from private market developers, service providers, health care providers, all who have a vested interest in affordable housing.
“What came out in the task force is to target the hardest-to-build affordable housing, and our greatest deficit, which is housing that serves those below 30% of area median income and permanent supportive housing, which is that solution to homelessness.”
She added both types of housing are hard to build.
During the roundtable, Brooke Page with the Corporation for Supportive Housing explained to Sisolak how the affordable housing crisis and homelessness are connected.
“Supportive housing is essentially folks coming off the street, who have no income, up to that 30% area median income but they may have significant barriers to housing,” she said.
After the meeting, Page clarified that affordable housing with supportive services is “an evidence based intervention that can be an essential tool for people who are unhoused and have no income or make up to 30% area median income and have complex barriers to housing.”
Sisolak said he didn’t realize there were units for people with no income.
“I had no idea we have units available for people with no income because that’s a homeless issue. That’s not really an affordable housing issue,” Sisolak said. “They kind of cross paths, I understand that.”
But there is an additional problem with placing them in housing, Page explained.
“We have about 6,000 units available right now for the private rental market in Southern Nevada,” she said. “The folks who need housing are competing with our general population. So landlords are able to charge three and four times the rent and keep folks out because of the demand.”
If there were housing units specifically geared toward those experiencing homelessness that included wrap-around services, she said “we wouldn’t have to worry about the tenant selection (process) that might keep people out.”
Other recommendations Hess said the coalition is advocating include allocating funds to enable homeownership and putting funding toward preservation efforts.
In the next five years, the state is at risk of losing 7,500 affordable units.
Lawmakers passed Senate Bill 12, which gives localities and tenants a 12-month notification before affordable housing units transition to market rate.
“Right now, there is no dedicated fund for preservation,” Hess said. “For us to potentially be able to have some funds dedicated for preservation would be new for the state.”
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