NEVADA LEGISLATURE LEGISLATIVE COMMISSION S SUBCOMMITTEE TO STUDY THE AVAILABILITY AND INVENTORY OF AFFORDABLE HOUSING (Assembly Concurrent Resolution No. 11, File No. 97, Statutes of Nevada 2005) SUMMARY MINUTES AND ACTION REPORT The fourth meeting of the Legislative Commission s Subcommittee to Study the Availability and Inventory of Affordable Housing was held on April 10, 2006, at 1 p.m. in the Grant Sawyer State Office Building, 555 East Washington Avenue, Las Vegas, Nevada, in Room 4412. The meeting was videoconferenced to Room 3137 of the Legislative Building, 401 South Carson Street, Carson City, Nevada. A copy of this set of Summary Minutes and Action Report, including the Meeting Notice and Agenda (Exhibit A) and other substantive exhibits, is available on the Nevada Legislature s Web site at www.leg.state.nv.us/73rd/interim. In addition, copies of the audio record may be purchased through the Legislative Counsel Bureau s Publications Office (e-mail: publications@lcb.state.nv.us; telephone: 775/684-6835). SUBCOMMITTEE MEMBERS PRESENT IN LAS VEGAS: Assemblyman Marcus L. Conklin, Chairman Senator Steven A. Horsford Senator Maurice E. Washington Assemblywoman Francis O. Allen Assemblywoman Marilyn Kirkpatrick SUBCOMMITTEE MEMBER ABSENT: Senator Dennis Nolan LEGISLATIVE COUNSEL BUREAU STAFF PRESENT: Kelly S. Gregory, Research Analyst, Research Division, LCB William L. Keane, Principal Deputy Legislative Counsel, Legal Division, LCB Ann M. Iverson, Senior Deputy Legislative Counsel, Legal Division, LCB Ricka Benum, Senior Research Secretary, LCB Jeannie Claussen, Senior Research Secretary, LCB 1
OPENING REMARKS Chairman Conklin called the meeting to order and advised the Subcommittee would act without a quorum until additional members arrived. He announced the next meeting of the Subcommittee would be held on May 8, 2006, at 1 p.m., at the Grant Sawyer State Office Building. The final meeting, which will include the Subcommittee s work session, will be held on June 5 at 1 p.m., at the Grant Sawyer State Office Building. The deadline for accepting proposals of potential recommendations is May 8. DISCUSSION OF THE ROLE OF GOVERNMENT SPONSORED ENTERPRISES IN AFFORDABLE HOUSING Timothy J. McBride, Senior Vice President, Government Relations and Industry Relations, Freddie Mac, discussed issues of mutual concern regarding the housing needs of Nevada and working in an innovative way with the Subcommittee and other stakeholders in the State to address some of those concerns (Exhibit B). There was discussion regarding the ability of Freddie Mac to underwrite loans and their process of purchasing mortgages from other lenders in order to enable the lenders to service other clients. Mr. McBride further explained that Freddie Mac is not a nonprofit firm, but utilizes market demands to buy and sell debt. Samuel Luna, Expanding Markets Director, Western Region for Freddie Mac, explained that Freddie Mac does participate on the front end of multi-family projects by purchasing low income tax credits and investing those to create cash for developers to create multi-family projects. He added that mortgage revenue bonds are purchased specifically to generate revenue for multi-family housing. Mr. Luna responded to questions posed by Chairman Conklin about Freddie Mac s familiarity with the operations in Nevada and indicated he has been working on a statewide effort to educate realtors. Additionally, he has been involved in a number of projects with various community partners who are familiar with all the programs that work well with affordable housing products. In conclusion, he discussed four barriers to home ownership, which are credit, cash to close, affordability, and access. In response to Assemblywoman Kirkpatrick s request for a statewide breakdown of Nevada s 17 counties specific to the level of assistance each county has received, Mr. McBride stated he would provide the information to the Subcommittee members. Responding to another question regarding the ability of Freddie Mac to fund or provide home loans, Mr. McBride stated that there are fewer loans that individuals can qualify for in high-cost areas. Additionally, Freddie Mac s charter places limits on conforming loans. Mr. McBride indicated he would provide the Subcommittee with a breakdown by percentages pertaining to loans made to low- and moderate-income families.
In addition, he agreed to provide demographic information to include race, gender, and statistical data. Chairman Conklin noted that Senator Washington and Senator Horsford were in attendance. DISCUSSION OF AFFORDABLE HOUSING ISSUES AND INITIATIVES IN THE PRIVATE SECTOR Leo Poggione, President, Craftsman Homes, discussed affordable housing issues and initiatives in the private sector (Exhibit C). He provided information on two projects in the Reno-Sparks area, which consist of the Tenaya Creek Project and the Rainbow Bend Project. Continuing his testimony, Mr. Poggione discussed the attributes and affordability of the Craftsman products. He was of the opinion that affordable housing can be achieved by utilizing: 1. Density bonus programs and public-private partnerships; 2. The 30-year deed restriction; and 3. Assistance from local entities and the Bureau of Land Management (BLM) in finding a way to decrease land and permit costs. Discussion ensued regarding fees for first-time home buyers, affordable housing subsidies, and benefits of having a 30-year deed restriction. Responding to questions posed by Subcommittee members, Mr. Poggione discussed manufactured home subdivisions in Pahrump; verification of deed restrictions utilizing the title search process; vinyl fencing versus wood fencing in the Rainbow Bend Project in Sparks; zoning discrimination for manufactured homes in Pahrump; regional affordable housing guidelines; and manufactured home warranties. Senator Washington inquired about how much fees add to the cost of a home. Mr. Poggione responded that fees vary depending on their costs and the time it takes to complete the process. OVERVIEW OF TRANSITIONAL HOUSING PROGRAMS FOR RELEASED OFFENDERS Dana Serrata, Re-Entry Coordinator, Nevada s Department of Corrections (NDOC), gave testimony about reentry strategies and pilot projects for released offenders (Exhibit D). She discussed the following barriers released offenders experience when obtaining adequate and affordable housing:
1. Insufficient number of beds in halfway houses and treatment programs, including apartments and public housing that will admit released offenders. 2. Lack of funds or expensive deposits for rental fees. Housing vouchers from the cities or counties are being accepted at fewer apartment complexes. 3. Apartment complexes are conducting background checks on potential residents and disqualifying those with a criminal history. This poses a problem as a released offender cannot apply for a job or social services assistance without an address and telephone number. 4. Released offenders do not have the coping skills necessary to navigate the complicated social service systems and, when their frustration level rises, the offender may commit a new crime. Dan Drinan, Executive Director, Ridge House, discussed housing issues and the obstacles released offenders encounter. The Ridge House provides a solution for released offenders to receive funding for housing by not emphasizing an individual is a released offender, but by providing funding to persons who have achieved three months of recovery from substance abuse. This pilot program has successfully served over 320 families for two years. Mr. Drinan noted in order to improve or streamline the transition of services for this special population, it is important to reeducate people and get past the stigma of a released offender. Senator Horsford asked about improving transition services for released offenders. Ms. Serrata responded that it is important to reeducate people and work with homeowners and apartment owners to get past the released offender stigma. She recommended the proposal of incentives for a public-private partnership. UPDATE OF THE ACTIVITIES OF THE NEVADA HOUSING COALITION Ann Harrington, Member, Nevada Housing Coalition, discussed affordable housing opportunities for low- and moderate-income Nevadans. Additionally, she addressed possible legislation relating to affordable housing (Exhibit E). Michael Mullin, President, Nevada Housing and Neighborhood Development (HAND) and a member of the Nevada Housing Coalition, discussed Nevada Housing Coalition legislative proposals (Exhibit F). Mr. Mullin responded to Senator Horsford s question regarding the Nevada Housing Coalition s rationale for supporting the recommendations of the Work Force Housing Subcommittee. He stated more flexibility would be provided if Clark County issued additional grants and loans. Currently, Clark County must grant funding to nonprofits,
as they cannot provide loans. Allowing them this flexibility would generate perpetual funding for affordable housing. Senator Horsford added that the definition issues need to be addressed before the Subcommittee enacts or changes the current statute. He recommended the Subcommittee review and determine the intent of each of the statutes in existence for affordable housing. Chairman Conklin expressed his concern if the median income exceeded 80 percent but did not exceed 120 percent, and the affect it would have on funding for the 80 percent median income and below. He requested additional information be provided on the median income levels. Assemblywoman Kirkpatrick voiced concern that she has been unsuccessful in receiving information from the Housing Division regarding the Account for Low Income Housing. She was also concerned with the possible existence of an affordable housing database. She mentioned that if a database is currently being maintained by another entity, there would be no need to allocate funding for another database. Additionally, she indicated that Washoe County has different issues regarding affordable housing than Clark County and suggested the Subcommittee look at affordable housing as a statewide issue. DISCUSSION OF AFFORDABLE HOUSING NEEDS IN RURAL AREAS Chairman Conklin advised Subcommittee members that Angilla Denton, Carson City Area Director, United States Department of Agriculture Rural Development, and Keyth Durham, Rural Community Coordinator, University of Nevada School of Medicine, Office of Rural Health, were not present to comment on affordable housing needs in rural Nevada. DISCUSSION OF RECOMMENDATIONS CONCERNING THE USE OF REDEVELOPMENT FUNDS Rob Joiner, Government Affairs Manager, City of Sparks, discussed the status of the Washoe County HOME Consortium. He introduced Jodi Royal-Goodwin, Community Resources Program Manager, Washoe County HOME Consortium. Ms. Royal-Goodwin spoke on meeting the housing needs of the community and the families served by the Consortium. See Exhibit G for a verbatim copy of Ms. Royal-Goodwin s written remarks. Mr. Joiner, at the request of Assemblywoman Kirkpatrick, was asked to provide information regarding redevelopment areas. He introduced Randy Mellinger, Assistant City Manager, City of Sparks, and Kermitt McMillin, Financial Advisor,
Redevelopment Authority, City of Sparks, to discuss how the northern Nevada redevelopment areas differ from southern redevelopment areas (Exhibit H). Mr. McMillin voiced his concerns regarding the achievement of tax increments in Town Center Project Area One and Project Area Two. He explained the declining revenues of the Redevelopment Agency over the past five years and what the actual results may be in the current year. He discussed the assessed valuation in Town Center Project Area One and the accumulated shortfall of $750,000 in tax increments. Uniformity is important in how taxes are collected, accounted for, and distributed to the local governments. He stated that revenues are currently available to refund bond anticipation notes; however, the $7 million of long-term bonds will use up most of the increment the Redevelopment Agency is now receiving. Mr. McMillin commented that neither of the project areas are in a position to set aside any of their tax increments for low- to moderate-income housing at this time. In response to a question from Assemblywoman Kirkpatrick, Mr. McMillin stated that funds are not available to set aside for redevelopment, and it would be helpful if the City was assessed on an annual basis to determine projected finances. He agreed that if bonds were paid first, then any additional money that was generated could be set aside for redevelopment. Randy Mellinger, Assistant City Manager, City of Sparks, addressed Assemblywoman Kirkpatrick s question about the number of projects under the Sales Tax Activity Revenue (STAR) Bond projects. He indicated the STAR Bond funds will be applied to the Sparks-Reno Lake Park, Project Area Two. Assemblywoman Kirkpatrick stated that being assessed on an annual basis would ensure projected income. Mr. Mellinger agreed that set asides are beneficial. However, if it is a mandatory set aside, smaller redevelopment areas sit too long since it is difficult for the smaller entities to accumulate enough increments to carry out their projects. The City of Sparks has done a significant amount of infrastructure investments in its downtown project, but there continues to be infrastructure challenges. He stated that if the City is able to use tax increments to reinvest into increment generators, there would be additional funding for new housing projects. Senator Washington voiced concern about the collection and distribution of taxes at the State and county levels. He suggested streamlining the process to ensure local municipalities receive funds expeditiously. Senator Washington requested that LCB staff explore the delays to determine if they are procedural or data collection delays.
Chairman Conklin directed LCB staff to research the distribution and times involved in processing tax increments and provide the information to the Subcommittee. OVERVIEW OF THE WORKFORCE HOUSING IN SOUTHERN NEVADA: A SPRINGBOARD TO ACTION CONFERENCE Ken Lange, Executive Director, Nevada State Education Association, gave an overview of the conference (Exhibit I-1) and reported on selected priorities and commitments (Exhibit I-2 and Exhibit I-3). Mr. Lange addressed the following priorities and commitments for work force housing: 1. Use of BLM land transfer, payment and timing, set aside percentages for BLM releases for affordable and attainable housing, and creation of a housing fund. 2. Building and defining public-private partnerships. 3. Development of community will by establishing an identifiable planning group to bring people together. 4. Maintaining a dialogue and working towards a shared vision. 5. Continued work on products, services, and policies that lend themselves to strategies to help solve problems. Chairman Conklin advised Mr. Lange to submit recommendations that may be relevant for the Subcommittee to consider from a State policy standpoint by May 8, 2006. PUBLIC COMMENT There were no comments from the public.
ADJOURNMENT There being no further business to come before the Subcommittee, the meeting was adjourned at 4 p.m. Respectfully submitted, Jeannie Claussen Senior Research Secretary Kelly S. Gregory, Research Analyst Research Division, LCB APPROVED BY: Assemblyman Marcus L. Conklin, Chair Date:
LIST OF EXHIBITS Exhibit A is the Meeting Notice and Agenda provided by Kelly S. Gregory, Research Analyst, Research Division, Legislative Counsel Bureau. Exhibit B is a presentation titled Freddie Mac s Role in Nevada Housing, submitted by Timothy J. McBride, Senior Vice-President, Government Relations and Industry Relations, Freddie Mac. Exhibit C is a document titled Legislative Commission s Subcommittee to Study the Availability and Inventory of Affordable Housing ACR 11, submitted by Leo Poggione, President, Craftsman Homes. Exhibit D is a memorandum submitted by Dana Serrata Re-Entry Coordinator, Nevada s Department of Corrections, to Legislative Commission s Subcommittee to Study the Availability and Inventory of Affordable Housing, titled Affordable and Available Housing for Released offenders Transitioning Back Into the Community, dated April 10, 2006. Exhibit E is a document titled Presentation to ACR 11, submitted by Ann Harrington, Member, Nevada Housing Coalition. Exhibit F is a copy of the Nevada Housing Coalition Legislative Agenda, submitted by Michael Mullin, President, Nevada Housing and Neighborhood Development. Exhibit G is the written testimony of Jodi Royal-Goodwin, Community Resources Program Manager, Washoe County HOME Consortium. Exhibit H is a compilation of charts titled Town Center Charts, submitted by Kermitt McMillin, Financial Advisor, Redevelopment Authority, City of Sparks. Exhibit I-1 is a workbook titled Workforce Housing in Southern Nevada: A Springboard to Action, Green Valley Ranch Conference, dated April 6, 2006, submitted by Ken Lange, Executive Director, Nevada State Education, Association. Exhibit I-2 is a chart addressing the U.S. Housing of Urban Development (HUD) Solution Set and definitions that was submitted by Ken Lange, Executive Director, Nevada State Education, Association. Exhibit I-3 is a summary sheet listing priorities that was submitted by Ken Lange, Executive Director, Nevada State Education, Association. This set of Summary Minutes and Action Report is supplied as an informational service. Exhibits in electronic format may not be complete. Copies of the complete exhibits, other materials distributed at the meeting, and the audio record are on file in the Research Library of the Legislative Counsel Bureau, Carson City, Nevada. You may contact the Library online at www.leg.state.nv.us/lcb/research/library/feedbackmail.cfm or telephone: 775/684-6827.