Lasagna might not be the first comparison that comes to mind when discussing development, but for Sen. Julia Ratti (D-Sparks), the savory Italian dish's layers of noodles provide an apt metaphor for financing the creation of affordable housing.
Developers looking to build affordable housing have to layer federal funding with other financing solutions, Ratti said, explaining that SB284 — heard Tuesday in the Senate Revenue and Economic Development committee — would provide another layer of support to the proverbial lasagna that is Nevada's affordable housing market.
The bill would remove sunsets on the state's Low Income Housing Tax Credit Program, established during the 2019 session as a pilot program allocating $10 million in tax credits for affordable housing development each year for a period of four years.
The program was one of the state's most high-profile efforts to address the affordable housing crisis in 2019, but the pandemic slowed down its rollout, and Ratti said the additional time would help give it more time in the oven.
"We are not asking for an additional allocation of tax credits," Ratti said. "But we are asking to remove the sunset, so that the tax credit law stays in (state law), so that if a future Legislature thought that this program was successful and wanted to allocate more tax credits, the statutory mechanism would be there to do so."
Along with eliminating the expiration date on the tax credit program, SB284 would also:
- Allow tax credits to be issued before a project is finished so developers have ample time to put those tax credits to use.
- Require projects to include a certification of costs that would go toward determining the final cost of the project.
- Prohibit the Housing Division from exceeding $40 million in tax credits over the lifetime of the program.
Once the Housing Division has issued a tax credit, the likelihood of that project going through is very high, Ratti said. But, developers who do not complete a project would have to repay any credits received through the program.
Christine Hess, the executive director for the Nevada Housing Coalition, praised the bill as a necessary step to addressing housing insecurity in the state.
"Affordable housing is economic development in Nevada," Hess said during public comment on the bill. "The adjustments proposed in SB284 are critical, and these tax credits will make a tangible difference for Nevada workers and residents."
Editor’s Note: This story first appeared in Behind the Bar, The Nevada Independent’s newsletter dedicated to comprehensive coverage of the 2021 Legislature. Sign up for the newsletter here.