Nevada needs more homes.

Which supply-side solutions stakeholders are advocating for, that's this week on Nevada Week.

♪♪♪ Support for Nevada Week is provided by Senator William H. Hernstadt.

-Welcome to Nevada Week.

I'm Amber Renee Dixon.

Nevada is facing a severe housing affordability crisis.

That's according to a new report from the Guinn Center, which says the crisis is largely due to an imbalance between supply and demand.

Using insights from interviews and a survey of stakeholders, the nonprofit, nonpartisan Policy Research Center concluded its report with several supply-side strategies, some of which are included in the housing bill that Nevada Governor Joe Lombardo recently announced.

(Joe Lombardo) My bill creates and establishes the Nevada Attainable Housing Fund and Council.

The fund will dedicate $250 million in state resources to support the development of over $1 billion of affordable workforce and attainable housing, $1 billion plus.

[applause] -In addition to creating that fund, Assembly Bill 540 also expands eligibility for affordable housing to include what the governor calls the "missing middle."

-My bill expands affordable housing eligibility to households earning up to 150% AMI, Area Median Income, which will support essential workers like teachers, nurses, and first responders--the middle mile, correct?

The missing middle.

These essential workers are education, public safety, and health care leaders in our community, and they deserve access to affordable and attainable homes in the very neighborhoods they serve.

-Here now to discuss the bill and other policy solutions to Nevada's housing crisis are Maurice Page, Executive Director of the Nevada Housing Coalition; Jill Tolles, Executive Director of the Guinn Center; and Peter Guzman, President of the Latin Chamber of Commerce Nevada.

Thank you all for joining us for this important discussion.

We've been talking about how it's complex as well, but I want to start with the "missing middle."

And these are, according to the governor, people who are nurses, first responders, and teachers, and they have households that make up to 150% of the area median income, also known as AMI.

We were doing the math ahead of this.

The AMI in Clark County is about how much, Maurice?

(Maurice Page) About 68,000.

-Okay.

So if you do the 150% of that, that means it's a household making about $103,000 to $105,000 a year.

That's a six-figure income household.

To some that may sound like a lot money to be qualifying for this kind of assistance, but, Peter, you're in support of this bill.

What would you say to that?

(Peter Guzman) What I would say is, let's take a look at who those folks are.

Who are they in our community?

They're essential to our community.

They're nurses and many more, right?

So I hope people don't get hung up on that, because that is just as important.

These are essential workers, essential folks in our community.

We need a thriving community in order to have a successful community and a community where, you know, look, I look at everything from the lens of economic development.

I need big businesses looking at us as a place to move their companies here and keep us moving forward, keep construction going.

That's how you do it.

That's why I like this.

-And, Maurice, let's talk about the affordability of homes for someone, a household making $100,000 a year.

I mean, the likelihood of affording a single family home is what?

-It's astronomical.

But let's even take this from a grassroots perspective.

Right now, Clark County, we're experiencing as far as affordability or as far as affordable homes, we're in need of about 80,000 units.

Overall, from a market rate perspective, we need about another 60,000.

So you're talking close to 150,000 homes that are just, in general, needed throughout Clark County.

And so the fact that this bill is prioritizing housing overall, that is what we need.

And so, again, talking-- taken to Peter's point, when you talk about the incomes and the levels of that, let's take that out.

Let's throw that out.

Number one, we need housing.

Our homeless numbers are increasing.

Our low-- our extreme low income individuals and families, they're struggling, and it's because we don't have the housing supply to be able to keep them in their house, in their homes.

And so this bill allows us to be able to move forward with that.

It's a start.

It's not-- is it the most perfect bill?

Probably not, but this is a step in the right direction, and I applaud Governor Lombardo for bringing this to the table.

-And I love that because, you know, listen, it's not a one size fits all, okay?

But we have to start somewhere.

We have to start getting aggressive, and I think that this approach is an aggressive approach, and that's why I'm supporting it.

-And, Jill, the Guinn Center report talks about people in Nevada, what they are currently able to afford.

Can you talk about some of those numbers?

(Jill Tolles) Sure.

First of all, thank you so much for having us on.

And as you mentioned, we're a nonpartisan policy research center.

We don't weigh in support or opposition of any specific bills, so good to start with that.

But our research team spent an extensive amount of time diving into this issue, and I'd like to share a little bit of backdrop for the audience.

What our research team found is that almost half of Nevada renters are excessively cost burdened, and a quarter of homeowners.

So that means that more than 35% of their gross income is going to pay for housing.

And so that's how we define this crisis, that they do need help.

The top five occupations in the state, out of the top five, only one, management, can afford a one- to two-bedroom apartment.

And so when Maurice talks about why this is a crisis and when Peter talks about why this is so important that aggressive actions are taken, I think they're speaking to the reality of those numbers for Nevadans.

And it's also helpful to know the backdrop of how we got here.

And Nevada was the fastest growing state in the nation for 70 consecutive years.

So you have an increased demand for housing, but then you also have pauses on the market to be able to construct that supply.

And so we faced two significant pauses.

One was during the great recession.

The second was during COVID.

And so that combined, that increased demand due to migration patterns into our state, as well as those two pauses that kept us from being able to keep up with that demand with the supply, is why we're here today.

-We're going to expand on that, but I want to talk about what kind of assistance these families, the missing middle, will be receiving.

What does it look like?

Because it's not as if they are going to be receiving housing vouchers, for example.

-Absolutely.

So it will be a combination of interest rate buy-downs, down payment assistance, other grants and loans that will be administrated through the housing division once this bill is passed, and so they will be able to apply and be able to get approved.

Also, there's a portion in the bill where it goes towards credit monitoring so that your current renters, they will be able to show their, their payment history, and that will be reported to the credit bureaus, and this will hopefully improve their credit scores enough so that this way they will be able to approve, get approved for home ownership.

So these are some of the parts of the bill that will definitely help that missing middle be able to achieve.

-That part is so important to talk about, and doesn't get talked about much, is that FICO score, that score to have the ability to even buy a house that we have a lot of people in Las Vegas who make pretty good money on tips and everything included, but maybe they don't have a payment history because they've been renting and, and that is important.

And that's why we, I'm definitely going to start pushing for lending institutions to be more involved in this housing crisis, because we got to think outside the box.

Interest rate buy-down, love that for first-time home buyers.

Why not?

But we need the lending institutions to be at the table as well.

-So the governor has his definition of the missing middle, but then, Jill, the Guinn Center report has its own definition.

The "missing middle housing," what is that a reference to?

-So you have three different categories.

Typically, you've got the single housing, single family homes, and you've got large multi-family home developments.

And then where we defined it as those duplexes, triplexes, and fourplexes.

And Nevada has-- that's that missing middle inventory, and Nevada has only approximately 7% in that category.

And so really, one of the findings of the research team was, how do we invest in more of those triplexes, duplexes, fourplexes, because it provides more options for families looking for their needs and also increases-- or it can help improve housing affordability overall.

-And this bill incentivizes that, correct?

-It absolutely incentivizes it, and it's something that's very needed.

I'm a big fan of multi-family, you know, fourplexes, triplexes.

You see those a lot on the East Coast, and they're great products.

-Yeah.

And according to the report, there are some developers who face some trouble when they want to build multi-family housing.

They've reported that.

What would be the reason behind that, Maurice?

-Well, that's the cause of your lumber costs, right, has gone, has skyrocketed.

The lack of experience from around our labor force, right?

And so you don't have-- that's not being built out here, and so-- within our state.

And so we have to continue to build on that.

And so when you have those two combinations, it makes it very difficult for us to be able to expand.

Lastly, land, right?

Land, we're running out of land.

Everybody will tell you that we have roughly about seven years to be able to build; however, with the way the land is approved and has to go through all the hurdles, that takes anywhere from two to five years just to get that pushed out.

So realistically, after 2026 when we do have roughly about 2,600 new units being built-- I'm sorry, 3,400 new units being built under the Affordable Housing brand, we will not have enough land to be able to move forward.

So with that being said, if we are able to create more land, create more infrastructure, that will be able to provide our developers more opportunities to definitely build.

We also have to also look at and examine our zoning and density, because we have to look at what we want to do with infield, where we're going to be able to build out our town homes, our condos, our duplexes, things of that nature.

We have to take opportunities or look at those opportunities as well.

This will also give opportunities, or another opportunity, for our smaller to moderate sized developers and general contractors to be able to build their portfolio.

-I do not believe zoning is a part of this bill, correct?

-It is not.

-It is not.

But the federal land aspect-- -It is.

-And your local municipalities are getting very aggressive, trying to change their zoning because they realize, I mean, Marilyn, Commissioner Kirkpatrick was on these calls on this housing thing, and we talked about zoning all the time.

And I love talking about the land issue, because it is an issue.

Some people try to minimize it, but look around, right?

The federal government owns over 80% of our state.

We need that sped up, and we need projects happening on this land.

There's a reason that in a time where there's more partisanship than ever before, you saw Congresswoman Susie Lee join Governor Lombardo and said, Hey, I want to help.

I want to get this land released as quickly as we possibly can.

There's a reason.

This is a real crisis.

-Yeah.

And I believe that was actually the top policy proposal from Guinn Center, at least the first one you listed.

-Sure.

-But how much can the State really do?

-So they do need to work in a collaborative way with our federal delegation to attain more of that federal land.

-And I think they have.

-84% of Nevada is federal land.

And there's not only getting that, but also being creative with land, long-term land leases as an option.

-Getting very creative.

-And it is a part of this bill, though?

-Yes.

There's nothing wrong with private-public partnerships.

And we got to unleash that where we have these zones on this land, where developers can come in and develop it and really develop it.

Developers are our friends.

We need construction.

That has ramifications beyond housing, right?

When guys are working, they're spending in our community.

So it's all economic development, whether you call it affordable housing, attainable housing, it's all economic development.

-But the thing we have to definitely look at, once this land is opened up, is infrastructure.

You talk about building out roads, utilities, bringing hospitals, things of that nature.

And again, to your point, it is economic development, but we also have to figure out, how do we do that?

Where is the funding coming from to be able to build that out?

And so because we have new communities, as it stands right now, where we have transportation that can't even reach it.

So when you talk about, you know, when we build and when we have these opportunities, are we going to be able to also allow folks to be able to get back and forth to work?

Or because with that, the cost is still going to be magnified, because they have to look at other ways to be able to afford.

-So on that, again, I go back to that, this bill, being creative.

We got to get creative with our tax policy.

We got to incentivize, incentivize, and incentivize.

-Jill, what about the tax aspect is your report suggesting be further studied?

-Right.

So definitely looking at tax credits and the ways to utilize those.

I mean, you have two approaches.

You can incentivize or you can mandate.

And I think incentivizing is a little bit more popular.

[laughter] -Who wants to talk about mandating?

[laughter] -But taking advantage of all the levers that you have available to you is certainly something that's worth pursuing.

I'd like to come back to, though, we talked about land, but we also talked about zoning and the importance of, you know, making some changes, reforming some zoning, which obviously happens at the local level.

So our report does talk about incentivizing or mandating that, moving towards the side of incentivizing.

But we did see that Reno, and in particular in the north, has found a 15% increase in those, the developments of multi-family and the duplexes, fourplexes, and so forth.

And so they've been more aggressive about upzoning so that they can allow for more of that missing middle.

And so making sure that all the jurisdictions across the state are also looking at what they can do right now.

-But there's an ugly truth here when it comes to multi-family housing development, that when it is proposed in someone's neighborhood, there are people who say, not in my backyard, right?

It's called nimbyism.

How big of an issue is that, and why?

Why don't people want multi-family housing in their own neighborhoods?

-And I think those are connotations that have come from long history, right?

There's affordable housing, which tends to be more government subsidized, and that's why I've gone away from using the word.

I'm using it here, but I'm clearly on record as saying I like "attainable, dignified" housing.

We got to change people's mentality.

It's not-- government housing doesn't have to be what you-- what has been in the past, right?

Let's get more creative with it.

Let's create-- where we did this press conference was, it's an unbelievable complex, somewhere I would live.

-For seniors.

-Yeah.

-Which makes so much sense.

-Exactly.

-Let's also-- I've been in, I've been around this and been around housing issue for multiple years, and I would honestly say, let's give more credit to our constituents, listen to our stakeholders, to our just residents in these homes.

They are starting to understand these new developments, these new affordable housing developments, they're bringing value to their neighborhoods.

-Really?

-Yes.

It's because these are not just your standard, you know, okeydoke builds.

These are communities that are being built, and they are raising the housing value for some of these homes, for some of these neighborhoods.

Now, is there an issue, or is there a concern with, you know, are you going to bring in the homeless or individuals that's, you know, that's going to destroy neighbors?

Of course.

We have that throughout every neighborhood, right?

That is a fear you need to have.

But I also believe that people that understand are starting to now learn and understand that affordable housing is needed.

You have, you know, your baby boomers are starting to retire there, so they're downsizing.

And so, you know, they're moving into senior communities, and they're looking at it and they're saying, Hey, I love this.

This is great.

This is where I could live the rest of my life at.

And then their neighborhoods, their homes are also increasing in value.

That is a win.

-I could see that.

I could see wanting to have a home close to where mom or grandma lives in an affordable senior complex.

Okay.

So watching the hearing for Assembly Bill 540, it is clear that there is a lot of support for the bill.

The only opposition I heard was from some of Nevada's labor groups.

The Northern Nevada Central Labor Council was among them.

So let's listen to what its president had to say.

-We agree that housing is a crisis in our state, but AB 540 is not the solution.

In fact, it does real harm to the very workers who keep this state running.

This bill exempts publicly funded housing projects from prevailing wage laws.

That means developers can pay construction workers far below the wages they'd earn on any other public job, even though these projects are being funded with $200 million in taxpayer dollars.

You cannot say you're building housing for essential workers while undermining the wages the essential workers who build it.

-Okay.

So prevailing wage rates have to be paid on Nevada Public Works construction projects.

Prevailing wage, please correct me if I'm wrong, it's a minimum hourly rate and then benefits on top of that determined by the job, the specific task, and by the region.

So how do you justify not paying a prevailing wage for what is a public project?

Peter, this one's for you.

-Well, listen, I think that this is a work in progress.

Listen, at that press conference, you saw Governor Lombardo.

Who was standing behind him?

Labor union.

So more to come.

I know there's discussions going on, and maybe there's going to be compromises and a way to figure this out.

That's what we're in the process of doing.

But what I will say is, you know, I've never heard of housing developments being built with prevailing wage.

Now, obviously, this is more using taxpayer money, so I think that needs to be studied, discussed, and come to a compromise, and hopefully that will happen.

But you know, we have to, we have to be realistic.

I mean, this will add costs to a house, and we got to figure out how to pay for that.

-Desert Pines, though, is an example of a community where prevailing wage is being utilized.

It's not yet finished.

Do you want to add to this, Maurice?

-Ground hasn't broke ground yet, so, but let's be-- in his bill-- and I want to make sure I'm reading this.

I want to read this correctly.

"It is important to note that the exemption is limited and not automatic.

Developers can still choose to pay prevailing wage, and, in doing so, it earns them preference in funding decisions."

So, again, prevailing wage, we're not saying it's a bad thing, or, you know, it's great.

The outlook for it, though, is, if you're going to include prevailing wage let's say on market rate, that is just going to limit.

We are stuck between a rock and a hard place when it comes to supply and demand.

The need for housing is unprecedented.

We can't pay everybody.

And trust me, I want everybody to get paid.

I want everybody to be able to earn the maximum amount of money that they can earn.

We want to do that, but we also understand that in 15 to 20 years, we're going to need almost close to 500,000 units in the state because of our growth.

That means we have to continue to build.

There's going to have to be some parts where we're not going to be able to pay and be able to do, but, again, if we're able to continue with this bill and move forward, we're able to build out, create more jobs, and we're still able to keep the economy moving.

-And listen.

Again, I'm glad you read that.

Come to the table.

Don't blow up the whole thing because of one thing.

Come to the table.

You saw the union standing behind them, because they're going to sit down with the governor, and they're going to figure this thing out.

That's how we do it.

We don't blow the whole thing up on a great bill because one section doesn't meet something that you like.

No, let's get around the table and let's figure this out.

-To be fair, some of the union leaders I spoke with said, You know what, we're neutral right now.

We don't want to talk about this, because we want to talk with the governor first.

We think that is the best-- -That's the key.

- --way to address this.

But let's talk about the construction workforce.

Is there a construction workforce here in Nevada that can support all these jobs, and what about the argument that they may not be being paid well enough to want to stay in Nevada?

-I've talked to-- -I was looking at Jill.

-I'm sorry, Jill.

I get too excited, Jill.

You know me.

-Wait your turn.

[laughter] -Thank you for bringing that up, because workforce is a huge finding of our report, and so it's an important one to talk about.

And essentially, one of the ways to help keep construction costs down is to make sure that we've got a robust workforce that is available and we don't have to import people in from out of state.

But we did look at three different possible policy options, one of which did include reciprocity for licensing with other states to fill in where we don't have the workforce available.

But I would note that every policy option that we put out in the report also included some pros and cons.

And one of the questions was, Would that have a disparaging effect on our workforce and on wages here?

And so the recommendation was around, it could be limited in time, limited by project, and limited by certain licenses where it's desperately needed.

But the other two pieces that I think are really important that haven't been a part of this discussion so far, and that is recognizing that Nevada is the second worst in the nation with apprenticeships, for apprentices for every 1,000 construction workers.

And so what we can do to help bolster apprenticeships in our state would really help to, maybe not tomorrow, but help to build that pipeline of the future.

And then the second thing is, what can we do to help support our community colleges and career and technical education programs?

So we do need to be thinking about this crisis right now, but we also have to have a long-term vision for how we are building out our workforce in order to build these projects.

-Reciprocity is a part of this bill.

What does that mean, Peter?

-Well, I think-- I think it has several definitions.

What I'm hoping is that it means, you know, fairness.

I'm hoping that it means we can get under construction.

I know I keep pointing out to that, but I don't want key words or key things to stop us and prevent us from the overall good that this thing can do.

Where there's areas where we can fix, let's get together and let's fix it.

But let's keep it moving.

-What does it mean, though, in a basic definition?

It's going to allow contractors from out of state to be able to work here?

-I'm told by union-- I reached out to union leaders who I talk to often.

They're members of my chamber.

They're telling me we have the workforce for construction to do this, these projects.

We know that the last time we were booming in construction, we had 9 to 11 cranes up.

Right now we have 2 or 3 at best.

So that means there's men and women that are not working right now.

They're ready to go to work.

-Okay.

Last question.

This is for you, Maurice.

We talked about tariffs.

What kind of threat do they pose to all of this work we're talking about?

-Well, it's going to be detrimental to our economy, number one.

You know, I spoke to developers, to our, to our construction workers, and what they're telling us is that they get majority of their lumber and materials from out of the country, from Canada, of sorts, and so if they have to take on those costs, you know, it's going to hurt us.

It's going to hurt our market.

It is going to slow down development.

This is something that we're definitely going to have to continue to watch and observe and figure out if there's going to be other ways.

And again, another, another comment that was made was that although that we can purchase this inside the United States, they don't manufacture it at a high rate, which means they're still developing their formations to be able to get this, get the materials out.

And so we don't have the capacity to be able to, to be able to buy enough to be able to continue to build out.

So with the tariffs, it's going to be definitely a issue that we're going to have to continue to monitor and continue to see what we can do to overcome these obstacles.

-Anyone want to respond?

-For me, it means that we better start manufacturing in this country.

We need to unleash manufacturing.

If you're not manufacturing, you're not existing, in my mind.

We need to manufacture in this great country.

-Thank you all for joining us.

And thank you for watching.

For any of the resources discussed, go to vegaspbs.org/nevadaweek.

And I'll see you next week on Nevada Week.