Primary Residence is an in-depth look at housing policy and its critical importance for voters in Democratic primary states, in the lead up to the 2020 Presidential election. In this edition, we speak with Susy Vasquez, Executive Director, Nevada State Apartment Association (NSAA), about the state’s shifting political and housing landscape, the needs of its housing providers and where Nevada might land on a candidate.
During the 2018 midterm elections, much of the United States was overtaken by the “blue wave,” a political phenomenon that handed state legislatures and executive offices to Democratic seat holders. This trend took hold in Nevada, where Democrats enjoy trifecta control over both houses of the legislature and the gubernatorial seat, a first for the Silver State since 1992. A historically purple state, Nevada must now contend with the consequences of a changing electorate, an entrenched conservative base combined with the flood of California transplants.
“We got very progressive all of a sudden, but we had enough people in Carson City that still wear their belt buckles and their cowboy hats,” says Susy Vasquez, Executive Director of the Nevada State Apartment Association (NSAA), explaining that a number of Democratic lawmakers must still reach across the aisle on behalf of their conservative constituents.
This spirt of bi-partisanship has fostered positive outcomes for the housing industry in Nevada. Nevadan cities maintain limited regulating authority as delegated by the state. This has resulted in many opting to wait for state direction on certain high-profile issues, including contentious housing policy proposals. Yet, the state legislature has been hesitant to press forward themselves, waiting to see how policies like rent control play out in states like California, Oregon and New York. “There was some legislation that came in at the state level that had the words ‘rent control’ and that was shot down within 24 hours of introduction,” says Vasquez.
In June, Nevada lawmakers established a tax credit pilot program similar to the federal Low-Income Housing Tax Credit (LIHTC) that allocates $10 million annually over four years to developers of affordable housing. “It has actually funded quite a few projects here on the south end of the state to try and meet demand in the Las Vegas metro area,” says Vasquez. Nearly 80 percent of Nevada’s 430,000 apartment residents are concentrated in the Las Vegas metropolitan area, which includes the municipalities of North Las Vegas, Henderson and Paradise.
Meanwhile, northern Nevada has witnessed a major construction boom during the last three months that has met and, unexpectedly, surpassed demand. “I have owners who are a little worried because vacancy has historically been 1 to 2 percent, but now we are looking at 6 and 7 percent in Reno,” says Vasquez, pointing out the surge in apartment and single-family home construction as contributing factors to rising vacancy rates. Statewide, Nevada still requires the construction of 8,000 new apartment homes annually to meet current demand.
As candidates prepare for Nevada’s caucus, Vasquez has noticed trends in what her members from both sides of the political spectrum would like to see in a candidate. “Infrastructure is absolutely an issue and what breaks some of our development,” she says. “Nevada has a lot of available infill land that can be and must be developed, but the infrastructure hasn’t been maintained. When any candidate speaks about infrastructure, it makes our members truly happy.”
Vasquez recalls the story of one 80-unit, $800 per-month planned affordable development that hit a snag after discovering aging municipal infrastructure on its site. The city assessed an impact fee against the development, holding it responsible for the refit of its substandard sewer system. Rents were forced to jump to $1,400 per month to satisfy the pro forma.
Housing providers in the state would also like to see fresh thinking when it comes to developing new supply-side solutions. “Bulking the LIHTC program is helpful in Nevada, but we may only build 180 affordable units, whereas we can build 800 to 1,000 market rate units. How can we increase the density of affordable housing development?” asks Vasquez.
A number of Democratic candidates caucusing in Nevada have sought to answer that question. Senator Elizabeth Warren (D-Mass.), who is hoping to bounce back from disheartening performances in Iowa and New Hampshire, was one of the first candidates to address the severe lack of affordable housing by proposing a $500 million investment into the development of 3 million affordable housing units. Unfortunately, Senator Warren’s plan also offers numerous provisions that threaten the abilities of the nation’s housing providers to effectively and safely manage their communities and residents.
Mayor Pete Buttigieg, who has been neck-in-neck with front runner Senator Bernie Sanders (I-Vt.), released his updated housing plan earlier this week. In his plan, Mayor Buttigieg calls for the development of 2 million affordable housing units through various federal funding sources like LIHTC and the Housing Trust Fund (HTF). His plan quickly shifts focus to the effect a lack of housing can have on historically oppressed communities, a move that Mayor Buttigieg likely hopes will encourage voter turnout from demographic segments that he has struggled to engage.
Senator Amy Klobuchar (D-Minn.), whose third place finish in New Hampshire surprised the country, has made bold investments in infrastructure a keystone of her campaign. While the details of this plan are broad, she has made commitments to address our cities’ aging wastewater and sewer systems.
But what of the race’s suspected leader, Senator Sanders? Vasquez says that while his progressive policies might be beyond the tolerance level of Nevada’s politically blended electorate, stranger candidates have emerged at the state level that have actually proven to be valuable allies to the NSAA.
“Still, I think Buttigieg may find a place with Nevada’s brand of progressives that Sanders has made nervous,” says Vasquez.
Most of the candidates see Nevada as a place to prove themselves and an opportunity to see how their messaging resonates with a more racially diverse, and possibly more politically diverse, electorate than the previous two contests.
Depending on the outcome of the Nevada caucus, some campaigns may terminate and so begins the consolidation of support for other candidates. Policies, however, do not die and the interest they generate may find a home with another candidate seeking to adjust their approach to increase their viability. Housing providers, as should all voters, must remain aware of this potential as they head to the polls.