Why you should care
Because no one wants to live from pillar to post.
Nevada’s housing market has been on a roller coaster for the past decade. As one of the largest casualties of the foreclosure crisis during the Great Recession, the state saw median home prices tumble by more than 50 percent from their peak in 2006 to 2009, and they continued to drop until 2012, according to data from Trulia, a residential real estate site.
In the following years, however, the state’s housing market has rebounded rapidly, and now it faces another challenge:
Nevada has the fewest affordable housing units in the U.S. for extremely low-income families.
With just 15 rentals available for every 100 extremely low-income renter households, the state has a shortage of more than 85,000 units.
The finding was part of a report published in March by the National Low Income Housing Coalition (NLIHC). The organization used the Census Bureau’s 2014 American Community Survey to assess rental availability for extremely low-income households, defined as those with incomes that are less than 30 percent of their area’s median income. In the case of Nevada, that means $16,500 or less per year, though that amount also depends on household size and specific location.
Local efforts are very important, but the private housing market still isn’t going to well serve the lowest-income renters without public subsidies.
Andrew Aurand, vice president for research, NLIHC
And how does the Silver State stack up nationally? Not so well. The report found that the average availability across the U.S. was 35 affordable homes for every 100 extremely low-income renter households. (Affordable means rent that consumes no more than 30 percent of household income, according to the NLIHC.)
Earlie King, grant program coordinator in Las Vegas’ Office of Community Services, says this shortage pushes people to live in “very substandard,” overcrowded conditions — two or three families living in a one-bedroom house, for example. “That’s what we’re really trying to avoid,” she explains, “but the reality is that’s what happens.”
A combination of factors is at play. Economic development in Reno and Las Vegas has increased the value of real estate in those cities. A growing demand for low-income rental housing has intensified the shortage. The successful housing market plus a lack of state and federal subsidies give developers little incentive to build units for that market sector. “Right now, if [developers] choose not to participate in [building low-income housing], to be frank with you, they could probably make more money,” says Steve Aichroth, administrator of the Nevada Housing Division. “These [developers] have to have the desire to help low-income folks.”
And yet the personal and social value of safe and reliable housing is potentially huge. As King points out, it can be a first step in establishing more stable lives. If you have an address, you can put your kids in school, fill out job applications and become a tax-paying citizen — “I can give back, and I’m moving up,” she explains.
To increase affordable housing availability, King says the city is currently looking to renovate extremely substandard housing, but she notes that somewhere down the line developers need to have more incentives to build units for low-income people. One option, Aichroth says, could be expanding federal tax credits for building and renovating low-income housing.
Another option the NLIHC recommends is to change the taxation of high-income households. Andrew Aurand, the organization’s vice president for research, says this could free up billions of dollars to invest in extremely low-income rental units. “Local efforts are very important,” he explains, “but the private housing market still isn’t going to well serve the lowest-income renters without public subsidies.”
Part of the House Republicans’ tax reform would cut the cap on interest rate deductions on mortgages to $500,000, a step the NLIHC supports. However, the bill would use that increased federal revenue to help pay for corporate tax cuts and the elimination of the estate tax. The bill also dumps a tax program for bonds to build affordable housing. The NLIHC says these changes will hurt the availability of low-income housing.
The market may naturally ebb and flow, but Aichroth hopes the future holds slightly smoother peaks and shallower valleys for Nevada’s housing. Now the state just has to figure how to make sure everyone can come along for the ride.