The Las Vegas City Council’s decision this past week to use state bond funds to construct an affordable housing project is a needed step for the community.
The $22.68 million in bonds go toward a $95 million multifamily housing development that will include 420 units, of which 386 will be offered below market rate. The public-private project, whose remaining funding will largely come from a private developer and from low-income tax credits, will be located on Decatur Boulevard not far south of U.S. Highway 95.
Councilwoman Olivia Diaz said the complex would fill a “huge need,” and she’s absolutely right.
For our community to remain viable, it is critical for our working-class residents to be able to live affordably.
This is a growing concern. The New York research firm Reis Inc. reported that apartment rent rose faster in Las Vegas than anywhere else in the U.S. during the first quarter of 2019, when it was up 7.7% compared with the same period of 2018. Reis reported that in the second quarter of this year, rent was up 7% year-over-year, the second-largest increase behind Denver (7.1%).
In some ways, that’s good news for Las Vegas. It reflects high demand for rental property, which is being driven by our post-recession gains in population.
But it suggests that demand outstrips supply, which is worrisome considering that there’s been significant development of apartments in the valley since the downturn. The vacancy rate was only 4.2% in the first quarter, Reis said, meaning all those new apartments have mostly filled up.
In addition, a new report from Clark County shows that Southern Nevada is far below the national average in affordable housing units per capita. The report says the average nationally is 37 units per 100 people, whereas in Southern Nevada we have 14 units per 100.
The new housing complex on Decatur should help. Plans call for one-, two- and three-bedroom units with rents ranging from $326 to $1,169. According to information presented during the council meeting, 90% of the complex’s below-market units will accommodate families earning 30-60% of the area’s median income. In addition, 10% of those units will be designated for tenants earning 30% or less than the area’s median income.
The multistory project also will feature retail and market-rate units.
The city’s share of the public-private initiative comes from the $33 million in tax-exempt state private activity bonds it received this year. An additional $8.6 million will come from the project’s developers — a partnership between private developer George Gekakis and Nevada HAND, an affordable housing nonprofit.
The remainder of the funding will come largely from federal and Clark County low-income tax credits.
“It’s going to bring workforce housing that is very much needed, and it’s also going to bring some very low-income units to a state that ranks last in providing those units for our citizens,” Nevada HAND’s director of real estate development, David Paull, told Las Vegas Sun reporter Miranda Willson.
It’s a promising step forward. By itself, it exceeds the city’s goal of creating 279 affordable housing units a year.
But as Las Vegas grows, more such projects are needed. The next crucial step is for Clark County to take advantage of legislation this year allowing it to raise the sales tax by up to one-quarter of a cent per dollar for affordable housing, homelessness and education.
As we originally proposed in June, the county should approve a three-year, automatically phased-in approach in which the sales tax would be increased 0.1% this year, 0.1% in 2020 and 0.05% in 2021. For just one-tenth of a cent, we can boost our community’s quality of life for working-class families and help our children in the Clark County School District.
That investment would pay off for the entire region by keeping our economy strong and making us an even more attractive place to live.