Monday, November 28, 2005

Home Builders Laud Guinn Land Plan

Home builders laud Guinn land plan

CARSON CITY -- With land in Las Vegas selling for $600,000 to $800,000 an acre, a representative for developers expects home buyers will welcome an innovative proposal by the governor to cut housing costs.
Gov. Kenny Guinn unveiled a plan Monday for the state to acquire parcels of federal land throughout Nevada. Private developers would build homes and condominiums on the acreage, which would be kept in a state trust.
Individuals purchasing the homes would pay only the cost of the housing unit, and not of the land.
"What the governor is doing is extremely laudable," said Irene Porter, executive director of the Southern Nevada Home Builders Association. "It is really worth taking a shot on."
With homes constructed at a density of two units per acre, the price of land can tack $50,000 onto the home's purchase price, Porter said. Eliminating that cost could turn lookers into buyers, she said.
The Guinn plan would bring entry-level housing to people whose household incomes are slightly less than $40,000 a year, according to Chas Horsey, state Housing Division administrator.
The median price of a new home in Southern Nevada climbed to $285,000 in November, a 37 percent increase in one year.
Guinn sees the plan as a way to attract more young teachers and nurses to Nevada, Horsey said.
"Our state has difficulty recruiting them," Horsey said. "They can't buy a house on their salaries. But if the Housing Division can help produce suitable housing for them? No one else is doing this."
Horsey said the federal Public Land Act allows states and local governments to acquire federal land for affordable housing. The law, however, stipulates that the housing can be sold only to people with a household income of no more than 80 percent of the mean, which is $45,000 in Clark County, according to Horsey.
Officials hope the projects on state land are not stigmatized as low-income housing. To prevent that, Horsey plans to ask Congress to allow some of the homes to be sold to people earning more than the median income.
Porter envision builders constructing homes costing about $180,000 and condos valued at $120,000. She expects there will be no shortage of developers willing to construct the homes.
Horsey wants to start the program in Southern Nevada and later expand to other parts of the state. He hopes 3,000 housing units a year can be constructed.
Guinn received a lukewarm reception from legislators when he announced the affordable housing proposal during his during his Jan. 24 State of the State address.
"We must open this door of opportunity because home ownership should never be an impossible dream for the working families of Nevada," Guinn said to polite applause.
Senate Minority Leader Dina Titus, D-Las Vegas, and Assembly Minority Leader Lynn Hettrick, R-Gardnerville, want more details about the proposal before committing their support.
Hettrick and Sen. Bob Beers, R-Las Vegas, see a need for restrictions to prevent home buyers from quickly selling the homes at market value and reaping a big profit.
"I would like to figure out how you stop someone lucky enough to get this housing from selling it and gaining an instant massive windfall profit," Beers said.
Horsey agrees that the state must place restrictions on selling the homes.
"We don't want windfall profits to be the goal of the homeowners," he said. "If their price is $50,000 less because the land costs zero, we don't want them immediately selling that land and pocketing the $50,000."
One solution might be to require people selling the homes to return to the state the share of the sales price that represents the land's value, he said. This money could be used to acquire additional land or cover administrative costs.
Hettrick also wondered whether the homeowners would pay property taxes on the land's value if the property is owned by a state trust.
"I am all for affordable housing," he said. "But if they don't pay property taxes, then how are they going to support the police, the fire department? I need details."
Hettrick doubts the program could become very big, noting that in his own county, Douglas, there is little federal land available.
"This is a noble cause and it may do some good, but it is not going to solve the problem of affordable housing," Hettrick said. "The government can't be all things for all people."
As Horsey sees it, the program could be launched without approval from the Legislature. Guinn only requested a resolution of support from the Legislature.
"We have a long way to go," said Horsey, who gave no date for the program's launch. "Right now we are concentrating on acquiring the land. Nothing to this date has put a dagger in the heart of the proposal."