The Washoe County Commission is moving forward on a plan to create a fund that will help bolster affordable housing in a region where rent and home prices are increasing because of market pressures from growth. If successful, the fund could provide developers with a tool to offset the costs of developing affordable housing units for low-income households.
At a meeting in late February, the commissioners unanimously approved a draft ordinance that would create an Affordable Housing Trust Fund for unincorporated Washoe County, Reno and Sparks. The five-member board is expected to vote and approve a final ordinance later this month. The potential funding tool, which has also cropped up in municipalities from Sacramento to San Diego, is the result of a long push from a coalition of affordable housing advocacy groups.
“It would go toward [a portion of] the project to help offset the cost of building an entire project," said Kate Thomas, the assistant county manager who presented the plan to the commission in February.
Rapid growth in the region, fueled in part by the presence of Tesla and other big companies at the Tahoe Reno Industrial Center, has created a squeeze on prices and supply.
“Incomes in our region haven’t kept up pace with home prices,” she said in an interview.
Developers continue to build high-end projects because residents relocating here, often from the Bay Area, can afford them. And Thomas said the market hasn’t reached a saturation point yet.
The idea behind the fund is to provide developers with an offset to defray the costs of building affordable units. Construction and land costs are often the biggest barriers to building newer, affordable projects, Thomas said.
The draft ordinance does not specifically address how the money would be disbursed, but it can be used to “increase or improve the supply of housing projects affordable to households of low income,” according to the language. It defines low-income households as households earning “ percent or below the median income in Washoe County.”
Thomas said the county would not use the funds to cover the cost of an entire project. Instead, the funds would be used to help developers keep an existing affordable project in the black. Each contractor would be required to create a plan for using the funds. The commission then would be required to approve the plan. Thomas said the goal is that all of the developer plans will conform to regional planning efforts and local master plans for Reno and Sparks.
The hope, Thomas said, is for the funds to be “enough of an incentive to make a project pencil."
“This is about large projects,” she said. “This is really scaled to be another tool for us to incentivize the development of affordable housing projects. That is why we are tackling affordable housing at the regional level. We know housing is not confined to a boundary.”
The ordinance says the county can appropriate public funds for the effort. It also allows the fund to accept revenue from bequests, donations and private sources. For now though, the trust fund lacks a dedicated funding source.
Some advocates have identified a few possibilities.
J.D. Klippenstein, the executive director of the faith-based nonprofit ACTIONN, a group that helped push the county to adopting the ordinance, said it might require a change in mindset about how people think about infrastructure.
When the public talks about city infrastructure, they often focus on roads, sewer lines, and utility poles. But people rarely include affordable housing.
Klippenstein, whose group ACTIONN stands for Acting in Community Together in Organizing Northern Nevada, thinks that needs to change. He said the county should consider implementing a supplemental government services tax and using some of the revenue for the affordable housing fund.
“We think our community needs to start thinking of affordable housing as infrastructure for the growth we’re experiencing, rather than a luxury or something that the market can provide,” he said.
Klippenstein said that his group, along with other organizations, have started to “shake loose” the conversation of using a services tax. But he conceded that funding, regardless of where it comes from, remains an uphill battle.
“The revenue source is definitely a challenge, and it’s where the real fight is going to be,” he said.
Washoe County’s fund mirrors a related effort that the city of Reno has supported over the past year. In April, the Community Foundation of Western Nevada established the “Community Housing Land Trust,” which holds permanently leased land for affordable housing projects. The city of Reno leased property in July for the trust’s Village on Sage Street project.
Before voting on the draft ordinance, Commissioner Bob Lucey praised the proposal.
“This is truly a testament to what we as a government should be doing,” he said at the commission meeting. “This is not something that is going to benefit just one individual. It’s going to benefit the community as a whole.”