By Katie Coleman, Communications Director, Nevada Rural Housing Authority
Housing: it’s not a long game or a short game. It’s a perpetual game. And if you talk to one of the many Nevadans who struggle with finding affordable housing, it’s no game at all. At Nevada Rural Housing Authority, we believe that life success starts with home, and because of the deeply impacting housing challenges Nevada faces right now, the subject is top of mind – especially at the 80th Session of the Nevada Legislature. The rising temperature on the topic is evidenced by the varied bills relating to housing. From the Interagency Council on Homelessness, to eviction policy reform, to the stimulation of housing production, housing is taking center stage in many legislative discussions. One bill that will rise to the forefront, and of particular interest to housing agencies also seeking the holy grail to solving affordable housing issues (spoiler alert: there is no holy grail but instead a diligent dedication to working through today’s housing challenges and then evolving solutions for the future), is the proposed state-based affordable housing tax credit program.
According to the National Low Income Housing Coalition’s Out of Reach 2018 Report, the average (statewide Nevada) cost for a two-bedroom apartment is $966. In order to afford* the cost of rent and utilities for the apartment, a person would need to earn $18.59 per hour. To put that into the perspective of a person earning minimum wage, they would need to work 90 hours per week to afford their housing costs.
*Without paying more than 30% of income on housing. Households that pay more than 30% of income on housing are considered “overburdened.”
Those involved in housing (which spans housing authorities to health and human services to legal aid and virtually every human-touching organization in between) tend to agree that Nevada’s housing challenges and potential solutions relate to supply. On statewide average, for every 100 low-income households needing affordable housing, there are just 37 units available. Production of affordable units is crucial – easy enough, right?
Enter: the Low-Income Housing Tax Credit (LIHTC) program. Introduced in 1986 by the federal government, the LIHTC program provides federal income tax credits to private investors who make equity investments in developing affordable rental units. Let’s state that another way: building apartments is expensive, and in order for public entities to keep development costs low (which in turn helps to keep rents low), they need investors to help.
From 1986 to 2016 (30 years), the federal LIHTC program helped with the development (or preservation, as LIHTC credits can be used for rehabilitation, as well) of 29,811 units in Nevada, which translates to 69,460 low-income households that were provided access to affordable units over that period of time. While the numbers are large, additional context and comparison are important: today, more than 116,000 Nevada households pay more than half of their monthly income on rent, and Nevada has a more than 100,000 affordable rental unit shortage. According to the ACTION Campaign (as of 2016), a 50 percent increase in LIHTC allocation authority would allow for an additional 2,353 affordable units to be built in Nevada over the next ten years. The opportunity presents good potential, and also demonstrates yet again why housing isn’t a “now” issue – it’s an “always” issue.
The Committee to Study Issues Regarding Affordable Housing, led by State Senator Julia Ratti, has issued its recommendations for legislation, which includes a bill draft for financing for affordable housing. The legislation will propose to create a Nevada affordable housing tax credit program to encourage the development and preservation of low-income residential housing projects statewide. Similar to the existing federal LIHTC program, a state-based program would incentivize private investors to contribute to the development of affordable housing inventory and allow development agencies the opportunity to build more rental units.
The Nevada housing discussion is seeing a shift, from one of panic to one of productivity. Entities such as the Committee to Study Issues Regarding Affordable Housing and the newly formed Nevada Housing Coalition are quickly evaluating the data, building an understanding of the full landscape and putting potential solutions forward together – these are actions that must happen now and forever, through times of economic growth, stability and contraction. Because while the housing landscape will perpetually change, our drive to care for all Nevadans and get them home is steadfast.
About the Nevada Rural Housing Authority (NRHA)
Nevada Rural Housing Authority’s mission is to promote, provide and finance affordable housing opportunities for all rural Nevadans. NRHA does this through homeownership programs, rental services, community development initiatives and an exclusive weatherization program. The Authority serves Nevada’s 15 rural counties and the rural portions of Clark and Washoe Counties – a coverage area of 110,000 square miles and home to more than 1.3 million Nevadans. For more information, visit www.nvrural.org and facebook.com/NVRuralHousingAuthority.