Financing, zoning, not federal land access, are what will expand affordable housing, experts say

Housing policy experts warn that urban sprawl creates other problems, such as the lack of transportation infrastructure needed to connect people to jobs, food and other resources.  (Photo: Elizabeth Beard, Getty Images)

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Nevada’s housing crisis isn’t new, nor is the push by local and state elected officials to open up federal land beyond city limits to build more affordable units.

Yet land availability is just one part of the equation, and experts say the state would be better served focusing on permanent funding for affordable housing projects on available land within the metro area’s current boundaries.

As President Joe Biden made his way to Southern Nevada in March to speak on federal solutions to address the nationwide housing crisis, Republican Gov. Joe Lombardo sent a letter criticizing the White House for not making more federal land available to build more housing.

“To address the housing crisis, the State of Nevada and our local communities need to access the land that is within their respective borders,” Lombardo wrote. “Unfortunately, we must rely on acts of Congress and severely backlogged federal agencies to secure the land necessary to grow. The federal process for privatizing land for development is too slow, too complex, and contributes to higher costs for Nevada families seeking homeownership.”

The National Low Income Housing Coalition (NLIHC) estimates Nevada lacks more than 78,000 affordable homes for extremely low-income households, defined as those with incomes at or below the federal poverty level, which is about $31,000 for a family of four.

“At the end of the day, what makes affordable housing affordable is the financing,” said Wally Swenson, the vice president of corporate affairs at the nonprofit developer Nevada HAND, which builds affordable housing units. “For Nevada HAND and our developers’ perspective, it’s about having robust financial resources to build, it’s having affordable and available land to build on and it’s having favorable zoning.”

The American Rescue Plan Act, signed into law by Biden in 2021, allocated billions of dollars of federal funds to Nevada.

Former Gov. Steve Sisolak, a Democrat, pledged $500 million of ARPA dollars for housing, which gave the state needed dollars to address financing gaps and either build or preserve affordable housing projects.

Swenson said it created an unprecedented amount of funding for the development of affordable housing. But those dollars are finite and will only go so far.

Around 3,000 units are being built statewide using federal relief money.

“It’s not going to get us out of our crisis alone,” he said. “What we can do as a community is come together to identify the different ways to address this crisis, from land availability to making additional financing available to developers.”

Lombardo didn’t respond to the Current ’s emailed questions about what specific proposals, if any, his office has looked at to address financing gaps in building and developing affordable housing projects.

Yonah Freemark, the research director for the Land Use Lab at the D.C. based economic think tank Urban Institute, said some communities throughout the country have looked at identifying new revenue sources, such as various tax increases, to fund affordable housing projects.

Maurice Page, executive director of the Nevada Housing Coalition, said the coalition is “looking at best practices around the country” but isn’t ready to back a particular idea.

He said the state could include looking at real estate taxes or property taxes.

“We have to be very creative in where we can raise taxes without affecting our current workforce,” Page said. “We have to be able to offset some of these costs. These are issues where we have to be able to look at and analyze to see if that would be a win for us and a win for the state.”

Another area the policymakers should consider is seeking more support for housing from corporations when they locate to Nevada, and “seeing if they would be willing to put in their budgets money for housing for their workforce,” Page said.

With the high volume of people in need of housing – Swenson said Nevada HAND gets thousands of inquiries every week – the state has reached “a point in time where every conversation should be on the table.”

“The conversation of tax increases have been thrown out by legislators in session,” Swenson said. “That hasn’t moved forward.”

‘You push up transportation costs’

Though land is needed to build more housing, not all types of land are the same.

The majority of federally owned lands are on the perimeter of the Las Vegas Valley, meaning its development will result in more urban sprawl.

Housing policy experts warn that urban sprawl creates other problems, such as the lack of transportation infrastructure needed to connect people to jobs, food and other resources.

“Land plays a huge part,” Page said. “Let’s not also forget the fact that when we’re opening up more land and trying to get homes built, we also look at the infrastructure. We have to look at child care, transportation, utilities. We have to look at all of that as well. All of that costs money.”

Alex Horowitz, the project director of the Pew Charitable Trust Housing Policy Initiative, said the further people get from work, grocery stores and school, “even if you’re adding more housing you push up transportation costs.”

“Transportation is often the second biggest item in a families budget after housing,” he said. “If you add housing further and further out from the places people go every day, that’s usually a recipe for extending commute and pushing up transportation costs.”

Freemark added that just because federal land might be an option, “doesn’t mean we should necessarily build housing on it.”

“I do approach the use of federally owned lands with a bit more skepticism because it’s often going to result in negative outcomes for sensitive ecologies,” Freemark said. “And frankly, it’s going to encourage more driving.”

M.J. Maynard, the CEO with the Regional Transportation Commission of Southern Nevada, warned Clark County commissioners in April that future revenue projections indicate the agency could start seeing a $156.3 million deficit starting in 2028.

Those projections are just for maintaining existing roadways.

Building housing on new federal land further away from city limits would also require building, and then maintaining, new roadways and transportation infrastructure.

While there has been a push to use federal land, there are no parameters on the type of housing could be built there if freed up.

The Current reached out to the Howard Hughes Corporation, a real estate developer that has built master planned communities like Summerlin, to see how making more federal land available would affect their ability to develop more housing.

They declined to comment.

Swenson said Nevada HAND’s model is to identify infill development, which utilizes existing urban spaces. The nonprofit developer, he said, has worked with local governments to address zoning barriers to build more units.

Horowitz said there are still more solutions cities and states can research to address its housing shortage.

“We see states making sure certain types of housing are not prohibitive by localities that have adopted exclusionary zoning,” he said, referring to laws that restrict the types of homes that can be built. “Nine states have legalized accessory dwelling units when a single family house or duplex usually has a basement or backyard apartment or they can convert a garage into an apartment.”

Horowitz points out the City of Las Vegas is triple the size of Paris, which he added “has more than triple the population of Las Vegas.”

It’s possible to build more housing within the city limits.

“Even though sometimes cities, you hear people say if the city is built out because if there isn’t a lot of open space or green fields to build on, we see jurisdictions can succeed at adding housing within city limits,” he said. “Often that means people can live closer to the places they go every day.”

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