MINUTES OF THE ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session April 27, 1995 The Committee on Government Affairs was called to order at 8:00 a.m., on Thursday, April 27, 1995, Chairman Douglas A. Bache presiding in Room 330 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Douglas A. Bache, Chairman Mrs. Joan A. Lambert, Chairman Mrs. Deanna Braunlin, Vice Chairman Mr. P.M. Roy Neighbors, Vice Chairman Mr. Max Bennett Mrs. Marcia de Braga Mr. Pete Ernaut Mr. William Z. (Bill) Harrington Ms. Saundra (Sandi) Krenzer Mr. Dennis Nolan Mrs. Gene Wines Segerblom Ms. Patricia A. Tripple COMMITTEE MEMBERS EXCUSED: Mrs. Vivian L. Freeman Mr. Wendell P. Williams GUEST LEGISLATORS PRESENT: Assemblyman Barbara E. Buckley, District 8 STAFF MEMBERS PRESENT: Denice Miller, Senior Research Analyst OTHERS PRESENT: Assemblyman Barbara E. Buckley, District 8; Mr. Eric Horn; Ms. Charlene Wood, Executive Director, Affordable Housing Resource Center of Southern Nevada; Mr. Marc Hechter; Mr. Ernest Nielson, Washoe Legal Services; Ms. Eileen R. Piekarz, Assistant Director, Affordable Housing Resource Council; Ms. Jeannie Deeg, President, The Nevada Manufactured Home Owners Association; Mr. Dan Tom; Mr. Al Rutledge, Division of Manufactured Housing, Department of Business and Industry, State of Nevada; Ms. Irene Porter, Executive Director, Southern Nevada Home Builders Association; Ms. Laura Tuttle, Supervising Planner, City of Reno; Mr. Tom Grady, Executive Director, Nevada League of Cities; Mr. Kurt Fritsch, City of Henderson; Mr. Douglas R. Bell, Manager, Community Resources Management, Clark County; Mr. Tom Tatro, Administrator, Division of Purchasing, Department of Administration, State of Nevada; Ms. Debra Meizel, Program Chief, Food Distribution Program, Division of Purchasing, Department of Administration, State of Nevada; Ms. Cherie Louvat, Executive Director, Food Bank of Northern Nevada; Mr. Paul Gowins, Chairman, State Independent Living Study Committee, Nevada Opinion Leaders Forum; Ms. Linn Thome, Manager, The Assistive Technology Center, Nevada Community Enrichment Program; Ms. Beverly Perry; Ms. Gertrude Eberly; Mr. Charles Eldridge, Deputy Administrator, Housing Division, Department of Business and Industry, State of Nevada (See also Exhibit B attached hereto). ASSEMBLY BILL NO. 444 - Prohibits local government from adopting ordinance relating to zoning that prohibits or restricts residential developments based on certain characteristics of occupants. Assemblyman Barbara E. Buckley, District 8, testified. She explained A.B. 444 concerned affordable housing. She indicated her interest in affordable housing arose when she was employed by Nevada Legal Services, where she encountered many senior citizens and many families who had been given eviction notices because of their inability to pay their rent. She said she became involved in the issue of affordable housing as a community volunteer. She advised she visited various cities and discovered how those cities provided affordable housing. Ms. Buckley said she founded The Affordable Housing Institute, which approached the problem of affordable housing by forming teams, comprised of governmental agencies, members of "...the private sector," nonprofit organizations, and builders, to study community development and affordable housing. She advised she was appointed to the Regional Housing Board in Clark County and the Clark County Affordable Housing Committee. She indicated A.B. 444 was the result of her participation in efforts to develop affordable housing. Ms. Buckley contended it was necessary to have a pro-active approach to providing affordable housing. She discussed problems which resulted from lack of planning for affordable housing. She said A.B. 444 prohibited county commissions and city councils from denying permission to establish a residential development based upon the kinds of people who would reside in that development, such as senior citizens. She pointed out, additionally, Section 4 of A.B. 444 prohibited a governing body from disapproving a residential development which would be affordable to low and moderate income families unless: the development would have a specific adverse impact upon the neighborhood it would occupy; state or federal law required denial; the development would cause an undue concentration of low-income households; or the development was inconsistent with the community's master plan. She suggested this provision of A.B. 444 would force governing bodies to consider where affordable housing might be included in their communities when developing master plans for those communities. Ms. Buckley said Section 5 of A.B. 444 pertained to manufactured homes and required a governing body to adopt the same standards for manufactured homes as those it adopted for single family residences. She suggested manufactured homes were more attractive than they once were and could be purchased more cheaply than custom-built homes. She said an attempt was being made, through A.B. 444, to ensure that people of different income levels could live within the same neighborhood. She contended, if this was not done, community problems resulted. Ms. Buckley said she believed A.B. 444 would assist those who worked hard but had difficulty paying their rent by helping to ensure affordable housing developments were built throughout communities. Ms. Buckley indicated she had received letters expressing concern about A.B. 444 and submitted a letter from Nevada Community Reinvestment Corporation (Exhibit C). She said, in response to some of the concerns expressed, she had drafted proposed amendments to A.B. 444 (Exhibit D). She advised the first proposed amendment would allow a governing body to require a developer to provide evidence that his proposed affordable housing development would remain affordable for at least 15 years. She said the second proposed amendment reduced the income level discussed in A.B. 444 from 150 percent of the median income to 100 percent of the median income. She explained the third proposed amendment addressed the Division of Manufactured Housing's concern that the provisions of A.B. 444 not be construed to conflict with federal law. Ms. Buckley urged the committee to support A.B. 444. Assemblyman Ernaut asked whether Ms. Buckley believed the primary problem encountered in creating affordable housing was the failure of county governments to approve zoning changes and to approve affordable housing developments or, rather, was "...more a problem of not enough affordable housing projects on the whole." Ms. Buckley replied both problems Mr. Ernaut had cited were detrimental to creation of affordable housing and indicated there were a number of problems involved. She said one problem was governing bodies had not been sufficiently pro-active in planning for affordable housing. She suggested, if adequate planning was done and appropriate policies implemented, it would be easier to create affordable housing. She discussed the methods some cities had employed to ensure affordable housing. Mr. Ernaut suggested it was necessary to address the problem of lack of affordable housing reactively as well as pro-actively and asked whether Ms. Buckley had considered providing more incentives to those who had the necessary capital to construct affordable housing in order to compensate necessary zoning disapprovals. Ms. Buckley responded she believed Mr. Eric Horn would address Mr. Ernaut's question. She indicated monetary incentives were difficult to find and suggested builders viewed A.B. 444 as being in the nature of a government incentive to build affordable housing, in that it would ensure builders would not be denied permission to build a project, which conformed to a communities master plan, simply because it was an affordable housing project. Assemblyman Segerblom commented Ms. Buckley had testified all affordable housing should not be concentrated in one area but also had testified she wished a developer to build "...a whole section of affordable housing." Ms. Buckley explained what she meant by not concentrating all affordable housing in one area was not building it all in one neighborhood of a given community but, rather, ensuring such housing was available throughout the community. Mrs. Segerblom asked what the median gross income currently was. Ms. Buckley replied the median gross income for a family of four was $40,000. Mrs. Segerblom asked, "Is this HUD money that people are talking about?" Ms. Buckley replied, "No. It can vary. It can be someone who's...a private sector builder, who just wants government off their backs so they can build. It could be someone who's using tax credit money, which is available from the federal government, but it's basically an IRS section and it's not a HUD program." Ms. Buckley suggested HUD funds were not a major factor in building affordable housing. Assemblyman Nolan referred to subsection (a) of Section 4 of A.B. 444 and suggested building low income housing next to a home, which a homeowner had built a home for the purpose of making an investment and in the hope the value of the home would increase, would prevent the property value of the home from increasing. Ms. Buckley suggested the designation "affordable housing" did not necessarily mean housing which was cheaper to build than other housing but, rather, meant housing in which senior citizens or others on fixed incomes could live. She discussed an affordable housing project, proposed to be built in Las Vegas, which was denied. She indicated, although its design was the nicest that could be imagined, the stigma attached to the home being affordable housing was sufficient to create fear it would lower property values. She advised research showed, when high quality affordable housing projects were constructed, property values in the neighborhoods in which they were constructed did not decrease. Mr. Nolan indicated, currently, property valuations and assessments were based, more or less, on the zoning within a community as established by its master plan. He questioned how having one block of affordable housing and another block of very expensive homes (within the same building zone) would affect the Department of Taxation's ability to evaluate properties for the purpose of establishing property taxes. Ms. Buckley replied she believed the Department of Taxation would assess the properties and could ascertain their value when it did so. She suggested a property on which a building existed generated more property tax than one on which there was no building. Mr. Nolan referred to the language in Section 4, subsection (d), of A.B. 444 and asked whether, normally, a developer would request a zoning change or variance prior to submitting his application to build an affordable housing project or, rather, would first submit his application and then request a zoning change. Ms. Buckley replied she did not know. Assemblyman Bennett referred to Ms. Buckley's proposed second amendment to A.B. 444 (set forth in Exhibit D) and asked whether the words "low level", in line 31 of page 2 of A.B. 444, should be changed to "low to moderate." Ms. Buckley replied affirmatively. Assemblyman Krenzer commented all housing built after World War II was affordable housing and said building such housing was not considered creating ghettos. She commented on the effects of lack of affordable housing. She suggested there was a great deal of prejudice regarding affordable housing and pointed out Section 3 of A.B. 444 addressed prejudice based upon income. She asked, "Now, to the county commissioners or to the local bodies that we're affecting by this, could you comment as to taking decision out of their hands by this tightly structured method." Ms. Buckley replied she believed A.B. 444 did remove some discretion from governing bodies and said that was its purpose. She suggested governing bodies should have discretion in making decisions, however, bureaucrats were denying good projects because of pressure placed on them by their own poor planning. She indicated her objective was to force governing bodies to plan ahead. Assemblyman Harrington referred to Ms. Buckley's testimony it was desirable for people to live close to where they worked. He suggested, in Las Vegas, businesses which employed low-income workers tended to be concentrated in certain areas and asked whether dispersing low-income workers throughout Las Vegas, with its inadequate transportation system, would create a problem. Ms. Buckley replied there was a high concentration of "service sector" jobs on the strip and in downtown Las Vegas but, nonetheless, employees worked in every part of Las Vegas. She contended it was necessary to consider all parts of a community (when planning for locations for affordable housing) but suggested, as a practical matter, affordable housing developments would not be built in all parts of a community. Mr. Harrington commented "You mentioned you didn't like the people coming forward and petitioning their government and not allowing changes in the zoning within their neighborhoods." He asked if Ms. Buckley perceived A.B. 444 as removing the power of neighborhood residents to petition their local governments. Ms. Buckley replied she believed there was no greater right than the right of a citizen to petition his government. She said she was attempting to address poor planning by government. She contended, rather than allowing neighborhood residents to have input as to what was right for their neighborhoods at the time local governments developed master plans for their communities, local governments waited until private property owners' rights were affected to seek neighborhood involvement. She contended the process should be reversed. Assemblyman Tripple referred both to the language "additional architectural requirement on a manufactured home," commencing on line 28 of page 3 of A.B. 444 and to the language in Section 5, subsection 3(a) of A.B. 444 and asked whether there was a reason for that language. Ms. Buckley responded there were people who did not want manufactured homes "...in single family neighborhoods.." and said the language to which Ms. Tripple referred was included in A.B. 444 to ensure manufactured homes (placed in such neighborhoods to provide affordable housing) would be newer homes and that local governments could require the outward appearance of such manufactured homes to be the same as the outward appearance of surrounding single family residences. Assemblyman Lambert referred to Section 5 of A.B. 444. She said the requirements of that section were already requirements under existing case law and asked why, then, it was necessary to include those requirements in A.B. 444. She also asked for clarification of Section 4(b) of Section 5. Ms. Buckley replied the basis for including Section 5 in A.B. 444 was "...there still is some consternation in the south that manufactured homes are still being denied." She advised, presently, homes which met Uniform Building Code specifications were permitted to be placed on lots intended for single family residences while homes which met HUD's specifications but did not meet those of the Uniform Building Code were not permitted on such lots. She said A.B. 444 would allow manufactured homes which met HUD's specifications to be placed on lots intended for single family residences. She said the purpose of subsection 4(b) of Section 5 was to allow local governments to exercise some discretion (with regard to allowing manufactured homes to be placed in neighborhoods intended for single family residences). Mrs. Lambert indicated she believed the existing case law to which she referred applied to manufactured homes constructed to Uniform Building Code standards rather than those constructed to HUD's standards and asked Ms. Buckley whether her belief was correct. Ms. Buckley replied her understanding was the same as Mrs. Lambert's. Mr. Eric Horn testified. He advised he was a homebuilder in Las Vegas. He stated 62 percent of the citizens of southern Nevada could not afford a medium priced home. He indicated that 62 percent included individuals such as teachers, who earned $26,000 per year, which was 60 percent of the median income. He said, over the past 20 years, the increase in the cost of housing which resulted from increases in labor and material costs was only one and one-half percent per year. He declared, over the past three years, the cost of housing in southern Nevada had increased by between five percent and 11 percent per year, with the cost in the immediately preceding year having increased by between fifteen and eighteen percent. He asserted the difference between the increase in labor and material costs and the increase in the cost of housing was due entirely to decisions made by government, the most important of which were decisions pertaining to zoning and planning. Mr. Horn contended two groups of people were engaged in the battle about affordable housing, homeowners and home buyers. He said, "There are four players involved in the process. They are government, homeowner, home buyer and builder." He declared the battle for affordable housing was lost in city councils and city planning commissions. He suggested homeowners who appeared before city councils and city planning commissions represented a powerful special interest group whose purpose was to increase the price of housing. He said homeowners had a seat on every planning commission and on every city council and made decisions based upon their own interests. He stated every general plan in southern Nevada was devoid of any mention of affordable housing. Mr. Horn advised 74 percent of the citizens of the city of Henderson could not afford a medium priced home. He contended, in December, 1993, the city of Henderson created a 32 page ordinance which added provisions to its zoning code which were specifically designed to increase the cost of affordable housing. He indicated one of those provisions restricted the supply of affordable housing to no more than 35 percent of the housing in a given area. He said one of Henderson's planning commissioners stated, in an open meeting of the planning commission, that Henderson did not need additional affordable housing. Mr. Horn suggested homeowners believed in affordable housing but did not wish it located in their neighborhoods. He said, in Green Valley, owners of $200,000 homes objected to $125,000 homes being located next to their homes because, they claimed, a lower class of people would occupy those $125,000 homes. He advised, in the Freedom Park area of Las Vegas, which contained older, $60,000 homes, homeowners objected to a project to construct new $60,000 houses for affordable housing because such houses would not sufficiently increase the value of their homes. He stated the project was never built. He said, when an affordable housing project was proposed to be constructed on the west side of Las Vegas, north of the downtown area, residents of the neighborhood banned together and "...required 50 percent more land to be put with each lot - reduce the density." He indicated that requirement immediately raised the cost of the houses which were to be built by $10,000 per house. He advised the residents of the neighborhood also required that the smallest proposed house plan not be offered. He stated, in another area of Las Vegas, owners of $1 million houses banned together and objected to a project to build houses which would cost $400,000, claiming their properties would lose value. He contended government would not "...speak for affordable housing in that scenario." Mr. Horn declared local governments were well known for saying they did not wish to increase property taxes. He asserted local governments really meant they did not wish to increase the tax rate. He said, in the past five years, the city of Las Vegas had grown by 22 percent while its government's income had increased by 74 percent. He advised property taxes had increased by 104 percent and suggested local governments had an interest in increasing property values. Mr. Horn said, "The only people who will speak for affordable housing are those elected officials that stand there with the backbone and stare out over the crowd, past me, the special interest, onto the public out there that's yelling `We want higher cost housing.' They're the only people who'll stand up with backbone and speak for people who need affordable housing." He declared A.B. 444 would provide backup for such elected officials and would force those elected officials who had no concern about affordable housing to consider affordable housing. Mr. Bennett asked what additional costs to proposed affordable housing developments were caused by government. Mr. Horn cited a project proposed to be built in "...a general plan area that allowed eight to the acre." He said the residents of the area objected and the project "...ended up with four to the acre." He indicated other costs resulted from governing bodies requiring such things as "...lots facing in...", extra retaining walls and greenbelts, and by their imposing various fees. Mr. Bennett suggested, with respect to the issue of property values, realtors should be involved in the process of providing affordable housing. He said, "You're right. It's not that the tax rate has gone up. It's the assessed value. I've probably received many complaints on that and I just want that in the record." Mr. Horn discussed difficulties he encountered when attempting to locate areas in which to build affordable housing. Mr. Harrington said real estate values were based on two considerations: the size and quality of a home and the location of that home. He asked whether attempting to build affordable housing in areas where land was expensive would make it more difficult for low-income families to afford that housing. Mr. Horn replied the key to affordable housing was not the cost of the house which was built but rather the cost of the land upon which it was built. Mr. Harrington asked, "So, if you're putting those - what you consider to be the low cost or affordable homes - on very expensive property, isn't that going to defeat the purpose? Won't that, then, not be affordable for these low-income people?" Mr. Horn replied affirmatively. Mr. Harrington asked whether, in the long run, neighborhoods would not be damaged if the integrity of established zoning plans was not maintained. Mr. Horn replied, "You have a very powerful force acting at the local level - that it doesn't matter if it's eight to the acre. They'll come out and insist it's four to the acre in the master plan, and the only backbone that they have is either internal fortitude or something from the state, coming down, saying `Doggone it guys, somebody has to watch out for the home buyer.'...So, if you have eight to the acre land, like the piece in the northwest, yes, it should be a requirement that, yes, there ought to be allowed eight to the acre if that's possible up in that area - not four." Mr. Nolan asked what percentage of the population was looking for affordable housing of the kind Mr. Horn described. Mr. Horn replied the majority of the population. He indicated half of the homes sold in southern Nevada cost less than $120,000. Mr. Nolan asked whether it was more profitable for Mr. Horn, as a home builder, to build eight affordable housing units on an acre of land or to divide that acre of land in half and build two $400,000 or $500,000 homes. Mr. Horn answered, "Per house, it's more profitable to build the bigger house." Discussions were held between Mr. Nolan and Mr. Horn. Mrs. Segerblom commented rezoning was the issue which seemed to bother most home owners. Mr. Horn suggested local governments should discover what need there might be for affordable housing in their communities and consider that need in creating their master plans. Mrs. Segerblom advised Boulder City had approved a location for the construction of affordable housing and asked whether Mr. Horn did any building in Boulder City. Mr. Horn replied he did not. Ms. Charlene Wood, Executive Director, Affordable Housing Resource Center of Southern Nevada (AHRC), testified by reading from prepared text (Exhibit E). She explained AHRC was created to assist non-profit organizations to develop affordable housing. She said, if passed by the legislature, both A.B. 444 and Assembly Bill 506 would aid in development of affordable housing for those whose incomes were less than the median income. Ms. Wood advised it was estimated, between 1995 and the year 2,000, approximately 2,000 additional low-income rental units would be needed each year in order to meet the needs of Clark County's growing population of low-income individuals. She indicated some existing rental units would be made available to partially meet that need by the fact some present low-income renters would become home buyers. She said, however, low-income households would be competing for rental housing in a housing market which had insufficient rental units to meet the demand for such units. She advised lack of affordable housing was recognized as the number one cause of homelessness. Ms. Wood explained lack of affordable housing in Clark County imposed a financial burden on renters who had low or moderate incomes. She said approximately 85 percent of low-income households used 50 percent of their gross income to pay for housing and utilities. Ms. Wood stated neighborhood opposition to affordable housing developments resulted from the poor past performance of subsidized housing projects, which were not well maintained and were allowed to evolve into slums, and contended that opposition was the basis for government interference with private enterprise's attempts to develop affordable housing projects. She suggested "...quality development, property management and long-term affordability periods..." were the keys to attracting private investment in affordable housing. She displayed several photographs of affordable housing projects which, she said, demonstrated that the constraints imposed on such developments by local governments were undeserved. Ms. Wood pointed out housing costs increased more rapidly than household incomes. She advised, since 1980, rents had increased by 85 percent and low vacancy rates indicated those rents would not decrease or stabilize in the near future. She stated, although the supply of housing in Clark County had increased, the supply of affordable housing had not increased. Ms. Krenzer asked Ms. Wood to display, again, the last photograph she had shown the committee. Ms. Krenzer pointed out the quality of the housing development shown in the photograph and said many projects which would have generated the same quality of housing were denied on the sole basis that their occupants would be people of low or median incomes. Ms. Wood concurred with Ms. Krenzer's comment. Mr. Marc Hechter, Vice President of Corporate Finance, Saxton, Inc., testified. He advised Saxton, Inc., was a large real estate development investment corporation, in Las Vegas, which was involved in commercial, industrial and residential building. He stated all of Saxton, Inc.'s residential products were targeted for affordable housing. He expressed concurrence with Mr. Horn's testimony regarding home ownership. He said, with respect to multiple family dwellings, his company had nearly 2,000 units which were either completed, under construction or in various stages of financing. Mr. Hechter referred to a comment Mr. Ernaut made, regarding capital incentives, and said his company utilized federal tax code capital market incentives for its projects. He explained all capital which was at risk was capital which belonged to the company. He advised, because of various tax code subsidies, the company was able to finance its projects at "...slightly below market conventional rates..." He indicated the ability to finance projects in that manner was the sole reason his company could produce residential products for lower rents. He advised, in order to produce a 360 unit project, in Las Vegas, his company had to "...cash out, up front...just to put the permanent financing in place, just under $900,000," and, in addition, had deferred most of its developer's overhead and profits for a period of at least ten years. He contended it was obvious his company had a tremendous capital incentive to manage that project well. Mr. Hechter asserted it was tremendously difficult to get the concept of affordable housing past planning commissions, (city) councils and county commissions. He suggested that difficulty had little to do with the appearance of affordable housing developments but, rather, was based upon people's perceptions. He discussed a situation in which, during a meeting held with those neighbors who would be immediately impacted by a proposed residential project, the issues raised had little to do with the project itself but, rather, had to do with perceptions of the kind of people who would occupy the project. He contended A.B. 444 would do much toward "...forcing some conscious thinking about why we're denying or approving things." He described the quality of projects which his company built to house senior citizens. Mr. Hechter said he advocated identifying and using appropriate capital incentives but contended those incentives only worked (for builders) if local governments allowed builders to proceed with their projects. He expressed strong support for A.B. 444. Mr. Ernest Nielson, Washoe Legal Services, testified. He explained Washoe Legal Services provided legal services to low-income individuals in Washoe County and had been involved in a number of issues concerned with affordable housing. He stated Washoe Legal Services supported A.B. 444. Mr. Nielson advised there were disturbing trends, in Reno, to call for additional public hearings regarding use permits and zoning changes. He suggested those additional hearings created additional delays and uncertainty with respect to affordable housing projects. He contended competition for available tax credits and other subsidies for affordable housing nearly guaranteed that affordable housing projects which were approved by the state and by other funding sources were projects of high quality. He advised Habitat for Humanities had proposed to build a project, in Reno, consisting of nine single-family homes. He said the project was compatible with the neighborhood in which it was proposed to be built but, because of concerns expressed by residents of that neighborhood, the city of Reno scheduled additional public hearings regarding the project. He indicated those hearings would create delays and uncertainty for the project. He asserted, under the provisions of A.B. 506, which he described as the companion bill to A.B. 444, both the planning for the project and the concerns of the prospective neighbors of the project would have been resolved, initially, and no questions would have remained to be addressed through additional hearings. He indicated the project consisted of single-family dwellings and suggested the problems surrounding it would have been greater if it had consisted of multi-family dwellings. He explained projects involving multi-family dwellings had "...a number of layers of financing...", each of which had its own time frame, and said when such projects were unnecessarily delayed, they were jeopardized. Mr. Nielsen asked the committee to approve A.B. 444. Ms. Eileen R. Piekarz, Assistant Director, Affordable Housing Resource Council, testified. She stated the Affordable Housing Resource Council provided technical assistance and "capacity development" to developers and providers of affordable housing. She advised the Affordable Housing Resource Council supported A.B. 444 but proposed Section 5 be amended to provide that manufactured housing must meet the standards of the Uniform Building Code. Ms. Piekarz indicated, during the course of the meeting, she had heard concerns expressed about the restrictions A.B. 444 would place upon local governments and upon neighborhoods. She said, although those concerns were valid, she believed there were local governments which would "...appreciate the backup that this bill would provide." She suggested, often, local officials wanted to approve a good, appropriate, affordable housing development but were faced with enormous pressure from those who would be neighbors of the development. Ms. Piekarz submitted a letter which she had written to Assemblyman Barbara Buckley (Exhibit F). Mr. Harrington commented he was concerned by the fact several witnesses had indicated they wished to disenfranchise people from their right to petition their local governments and indicated he was becoming troubled by A.B. 444. Ms. Piekarz indicated she believed A.B. 444 would require affordable housing projects to conform to communities' master plans and would not permit inappropriate projects to be constructed but that it would not allow the mere fact that a project was affordable to be used to disapprove that project. Discussions ensued between Mr. Harrington and Ms. Piekarz about the effect of A.B. 444. Ms. Jeannie Deeg, President, The Nevada Manufactured Home Owners Association, testified by reading from prepared text (Exhibit G). She said she represented between 72,000 and 90,000 people. Ms. Deeg stated the only difference between a manufactured home and a home constructed on-site was that the manufactured home was constructed first and then transported to the site. She suggested manufactured homes must be considered as a viable solution to the problem of housing for people having low or median-incomes. She advised, although manufactured homes cost less, their amenities were the same as or superior to those of site-built homes and, when placed among site-built homes of comparable proportions, could not be distinguished from those homes. She asked the committee to support A.B. 444. Mr. Dan Tom testified. He stated he lived in Henderson, Nevada, and was the chief credit officer of a financial institution based in Nevada. He said he was a former developer and had built more than 2,000 affordable housing units outside of Nevada. Mr. Tom said a large percentage of the people who worked in his bank had below- median incomes. He stated it was likely as many people earned incomes which were less than the median income as earned incomes greater than the median income. Mr. Tom said there were controls which could be applied to housing being built at the present time which were not available when housing was constructed in the 1940's and 1950's. He indicated there was a perception that, if an individual who earned a low income moved into an exclusive neighborhood, his doing so would be disastrous for that neighborhood. He suggested that perception might be based on the fact many of the people who lived in exclusive neighborhoods had fled from urban areas, which they viewed as areas of high crime. He contended, in most communities, the opportunity existed to create covenants to control the exterior appearances of the houses in those communities. He said, "I don't think it should ever be a condition that you can't move into my neighborhood unless you improve the value of my house. It ought to be good enough that you can move in my neighborhood and not cause the value of my property to deteriorate." He contended economic stratification within a community did not impact property values within that community. Mr. Tom stated one problem interurban communities had was the large concentration of "...so called affordable housing..." in those communities. He contended, if individuals such as teachers and the people who worked in his bank were unable to live in the newer subdivisions of their community, the only places they could live were in those places from which the people who now lived in the newer subdivisions had moved because they felt unsafe in those places. He suggested A.B. 444 and A.B. 506 would help eliminate concentration of affordable housing. He contended concentrating people of one economic class in one area created "...some of the problems that we're experiencing today." Mr. Tom advised banks had become willing to finance affordable housing developments only recently but such financing was now available. He suggested the only thing lacking in the development of affordable housing was a mechanism to cause local governments to act in a manner which was other than capricious. He declared the number of subtle ways in which affordable housing projects could be undermined or made to be too expensive was unbelievable. Mr. Al Rutledge, Division of Manufactured Housing, Department of Business and Industry, State of Nevada, testified. He said, among its other responsibilities, the Division of Manufactured Housing had the responsibility of regulating manufactured homes, which were constructed in compliance with federal codes, and modular homes, which were constructed in compliance with the Uniform Building Code. He indicated the division was concerned about the provision of A.B. 444, contained in subsection 3 of Section 5, which provided a local governing body could impose additional architectural requirements on a manufactured home, with respect to roof overhang, roofing materials and siding materials, which would not be imposed on a conventional, single-family dwelling constructed on the same lot. He said, if those architectural requirements were more stringent than and would conflict with the federal standard for construction of a manufactured home, they would be preempted by federal regulation. He advised the Division of Manufactured Housing was required, pursuant to NRS 489.241 and NAC 489.180, to enforce the federal Construction and Safety Standards Act. He indicated the division believed the provision of A.B. 444 being discussed should be reworded to eliminate any conflict with the federal Construction and Safety Standards Act. Mr. Rutledge advised many states had enacted legislation which allowed, to some extent, that manufactured housing could be placed on single-family residential properties, which were neither mobile home parks or properties with a mobile home overlay. He suggested, however, local governments could limit the use of low- income housing, such as manufactured homes, by means of "...C, C and R's...", deed restrictions or local ordinances. He said, in Nevada, manufactured homes could be converted to real property and taxed as real property. Mr. Rutledge said, in most jurisdictions of Nevada, homes which were constructed off-site and constructed in compliance with the Uniform Building Code, could be placed on property zoned as R-1. Mr. Al Rutledge, Division of Manufactured Housing, Department of Business and Industry, State of Nevada, testified. She stated she supported affordable housing but contended A.B. 444 and A.B. 506 needed some revision and offered the assistance of Southern Nevada Home Builders Association in resolving any differences of opinion with respect to those bills. She suggested there were many complex legal issues involved with respect to both A.B. 444 and A.B. 506. Ms. Porter asserted, when either she or the Southern Nevada Home Builders Association discussed affordable housing, they were not discussing solely low- income housing but were also discussing the ability of young families and first- time home buyers to qualify to buy a home, which was becoming increasingly difficult to do. She suggested attempts should be made to cause A.B. 444 and A.B. 506 to fully address all of the barriers to affordable housing. Mr. Harrington referred to the proposed amendments to A.B. 444 presented by Assemblyman Buckley (Exhibit D) and asked what kind of deed restriction Ms. Porter believed could force a property to remain affordable over a period of 15 years. Ms. Porter replied she believed, if an affordable housing project was controlled by a single entity, that housing could be made to remain affordable over a period of 15 years, but if the homes in an affordable housing project were sold to individuals, she did not believe there was any way to deprive those individuals of the right to sell their homes. Ms. Laura Tuttle, Supervising Planner, City of Reno, testified. She stated her responsibilities included oversight of all discretionary land use applications presented to Reno's Board of Adjustment Planning Commission and its city council and the administration of Reno's zoning ordinance as it related to business licenses and building permits. Ms. Tuttle declared the city of Reno opposed A.B. 444 as it was presently drafted but suggested the city of Reno could support A.B. 444 if it was appropriately amended. She advised Reno's current master plan contained many policies which encouraged development of affordable housing and Reno attempted to make an adequate supply of land available for such projects from which builders could choose. She indicated Reno also had a program to provide financing and technical assistance for the creation of affordable housing projects. Ms. Tuttle advised what Reno's master plan did not do was cite specific properties for affordable housing projects or senior citizen housing projects. She said Reno addressed the density of developments rather than who should occupy those developments. She suggested, if Reno were to specifically cite, in a land use plan, the place where an affordable housing project should be located and the developer who proposed to construct such a project was unable to do so because of market conditions or the availability of financing, then the city of Reno "...could be challenged that we had effectively taken his property." She contended market conditions changed far more rapidly than a master plan's land use map ought to change. Ms. Tuttle stated the city of Reno was concerned that A.B. 444 would remove local governments' discretion to respond to community concerns and neighborhood input. She cited examples of the types of building requirements which Reno applied to housing developments when it deemed it appropriate to do so but which it did not set forth in its building code and contended, if Reno's building code was required to "...address everybody the same...," it would have to set forth such requirements in its code whether or not they were appropriate for all housing developments. Ms. Tuttle asserted A.B. 444 contained a number of ambiguities which the city of Reno would like to help resolve. She referred to the words "in the same area," contained in subsection 1 of Section 3, and pointed out those words were used a number of times in A.B. 444. She explained the city of Reno was uncertain as to what was meant by "the same area", whether it would refer to the entire jurisdiction of Reno or only to one street or to one neighborhood. She referred to the language "substantial adverse effect on the viability or affordability of such a residential development," contained in subsection 1 of Section 4, and said it appeared that language would place the city of Reno in the unfortunate position of having to determine whether or not a developer could make a profit or having to determine what an appropriate profit would be. She referred to the language "disproportionately high number of households," in subsection 1(c) of Section 4. She advised there was a high percentage of multi-family housing units in Reno and asked whether the language to which she had just referred would require Reno and other jurisdictions to maintain their existing "...housing mix..." forever. She contended the intent of the words "no feasible method to mitigate or avoid satisfactorily," contained in subsection 3(b) of Section 4, was vague and needed to be clarified. Ms. Tuttle provided some additional testimony in writing (Exhibit H) , upon which she did not expound orally. Mr. Tom Grady, Executive Director, Nevada League of Cities, testified. He suggested affordable housing was a problem not only in Clark County but also in rural communities. He indicated, in a number of rural communities, perhaps 90 percent of the citizens had low to moderate incomes. He advised those rural communities relied on the Uniform Building Code as a guideline for planning and zoning. Mr. Kurt Fritsch, city of Henderson, testified. He indicated his comments regarding Section 5 of A.B. 444, as it related to manufactured housing, would be the same as those made by Ms. Irene Porter and some of the other witnesses. He stated the city of Henderson was not adamantly opposed to A.B. 444 but would like to assist in resolving the problems with the bill. Mr. Fritsch referred to Mr. Harrington's question as to what kind of deed restriction could be applied to cause affordable housing to remain affordable for a period of 15 years and said, "My experience with the deed restrictions is you're really talking about subsidized housing when you get into that - that you've had some either type of state, federal or city loan. ... Without that, I think it would be very difficult to restrict a type of housing to be affordable and to be turned over to affordable housing participants..." Mr. Fritsch discussed Mr. Horn's testimony regarding difficulties he encountered in attempting to build affordable housing projects in the city of Henderson. Mr. Fritsch indicated affordable housing was continuing to be built in the city of Henderson. Chairman Bache closed the hearing on A.B. 444. Chairman Bache advised, before taking testimony regarding the remaining bills on the agenda, the committee would consider a bill draft request. B.D.R. 31-2013 - provides procedures for financial administration of a local government in severe financial emergency. ASSEMBLYMAN ERNAUT MOVED FOR COMMITTEE INTRODUCTION OF B.D.R. 31-2013. ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLY BILL NO. 483 - Broadens purposes and alternatives for expending public money. Assemblyman Barbara E. Buckley, District 8, testified. She said Clark County requested she sponsor A.B. 483 because of a problem Clark County had encountered and advised Mr. Douglas Bell would provide testimony regarding that problem. Mr. Douglas R. Bell, Manager, Community Resources Management, Clark County, testified. He submitted a copy of a memorandum regarding Section 108 loans together with copies of legal opinions he had received from the Office of the District Attorney of Clark County with respect to his request to be allowed to use federal funds to make loans to both businesses for profit and non-profit businesses (Exhibit I). He said he consistently received legal opinions from the Clark County District Attorney's office which indicated, because NRS contained no language specifically permitting counties to loan federal funds to other agencies, under Dillon's Rule, Clark County could not make such loans even though federal programs and guidelines allowed them. Mr. Bell indicated, through A.B. 483, Clark County was seeking enabling legislation which would allow its county commissioners to loan federal funds for purposes of economic development and creation of affordable housing. He explained Clark County was unable to loan federal funds to developers who desired to build affordable housing although "...all over the country they have this capacity, under the federal program guidelines..." He advised ten census tracts in the Clark County area had been designated as an enterprise community and Clark County wished to create employment opportunities in that community. He referred to the second page of Exhibit I and pointed out, in its application to the federal government for funds, Clark County spoke of micro enterprise development loan funds and revolving loan funds for businesses for the purpose of generating jobs. He stated, currently, cities were able to make such loans for economic development and for affordable housing but urban counties did not have the power to do so. Ms. Tripple said she was not comfortable with the words "but not limited to," in subsection 1(c) of Section 1 of A.B. 483 and asked Mr. Bell to give a further explanation. Mr. Bell advised, pursuant to NRS 244.1505, the county could presently make grants to agencies for the substantial benefit of the community. He said subsection 1(c) of Section 1 would allow the county to loan federal funds to private organizations for purposes of economic development or construction of affordable housing. He indicated, if the words "but not limited to" posed a problem, those words could be deleted from A.B. 483 and the county's ability to loan federal funds to private organizations could be limited to making loans for the two purposes he had named. Ms. Tripple suggested that deleting the words "but not limited to" would clarify and reinforce the intent of A.B. 483. Mr. Bennett referred to line 19 on page 1 of A.B. 483 and asked Ms. Buckley, "Is the 80 percent in conflict with what we've just proposed with the other legislation?" Ms. Buckley said she did not believe it was. Chairman Bache closed the hearing on A.B. 483. ASSEMBLY BILL NO. 487 - Requires chief of purchasing division of department of administration to establish supplemental food program. Mr. Tom Tatro, Administrator, Division of Purchasing, Department of Administration, State of Nevada, testified. Mr. Tatro advised the Division of Purchasing had three key programs: the purchasing program; the federal surplus property program; and the commodity food distribution program. He explained the commodity food distribution program consisted of seven separate programs: school lunches; summer camps; summer food service; school breakfasts; emergency food assistance; food distribution on Indian reservations; and nutrition for the elderly. He provided a list of agencies to which the Division of Purchasing distributed food under its emergency food assistance program (Exhibit J) and advised A.B. 487 would address replacing a portion of lost federal funding for the emergency food assistance program. Mr. Bennett referred to the fiscal note on A.B. 487 and asked whether there would be an additional administrative cost for the program. Mr. Tatro replied there would not. Ms. Debra Meizel, Program Chief, Food Distribution Program, Division of Purchasing, Department of Administration, State of Nevada, testified. She advised, if A.B. 487 became law, the Division of Purchasing was ready to put the new program created by A.B. 487 into effect quickly and to administer it efficiently and effectively at little cost. She advised the Division of Purchasing already had the infrastructure with which to accomplish the program. She said the division currently distributed approximately $4.5 million worth of federal products. She stated the division was audited by both the federal government and Nevada's Legislative Counsel Bureau and had an existing advisory council, which would provide a forum for input into decisions relating to expenditures and allocations. She explained the division presently had a large system of warehouses and also had the staff and computer capability "...to plan, organize and incorporate purchased food into the already recognized and accountable food distribution program." Ms. Meizel said the division encouraged its recipient agencies to provide input into its food distribution program and advised one way in which it accomplished this was through an advisory council. She explained the advisory council was comprised of people who operated existing food programs throughout Nevada and who could provide guidance for the proposed program and assist the division in identifying those foods which would provide the greatest value with respect to both price and nutrition. Ms. Meizel asserted, in light of pending cuts in federal programs, including the emergency food assistance program, the appropriations provided by A.B. 487 would provide some assistance to needy individuals who had to rely on emergency food programs. Ms. Meizel referred to Exhibit J and said it explained the amount of federal assistance received by every county in Nevada for the purpose of distributing food to low income households for household use. She pointed out Exhibit J set forth the total amount of funds received for fiscal years 1992, 1993, 1994 and 1995. She stated the President's budget for 1996 did not provide any funding for the program. Ms. Cherie Louvat, Executive Director, Food Bank of Northern Nevada, testified by reading from prepared text (Exhibit K). She explained the Food Bank of Northern Nevada distributed donated and purchased food and United States Department of Agriculture (USDA) commodities to 88 agencies which served the 14 northern counties of Nevada. She advised 36 of those 88 agencies dealt with emergency food programs. Ms. Louvat said, in 1993, USDA commodities comprised approximately one-half of the nutritious food the food bank had available for distribution. She indicated that percentage had diminished annually and there was no funding in the President's budget to provide any such food in the future. She stated A.B. 487 would provide a small amount of money to assist in replacing those nutritious foods. Ms. Louvat said, while local donations of food products might remain stable, national donations were diminishing. She indicated, in 1993, throughout Nevada, 1.2 million pounds of food products were received from national donations but less than 300,000 pounds were received this year. She stated money with which to purchase food to replace those losses would have to be obtained from the private sector as funds from grants were becoming less available. Ms. Louvat advised cuts of between $20 billion and $30 billion dollars in the food stamp budget were being proposed and indicated proposed changes in the welfare program would cause 50 to 55 percent of those individuals presently receiving food stamps to be no longer eligible to receive them. She said state welfare representatives, in Washoe County, advised her that, of their existing caseload of 14,000 individuals, 7,000 individuals, of which 3,500 were children, would no longer be eligible to receive welfare. She explained those individuals would lose their access not only to food stamps but to all other federal benefits and would need both emergency and chronic food assistance. She stated A.B. 487 would help Nevada's food distribution program and emergency food programs to meet those needs. Mr. Harrington asked whether the majority of food to be distributed would be given to individuals for home preparation or would be given to shelters where people went to eat. Ms. Louvat said she believed the majority of the food would be given to individuals for home preparation. She advised shelter programs had access to other food sources and were generally operated by organizations, such as the Salvation Army, which had other monies available to purchase food. Mr. Harrington asked whether Ms. Louvat was confident that shelters screened individuals who received food from them well to ensure they did not sell the food they received in order to buy alcohol. Ms. Louvat said, "I think that spending a half an hour in the lobby of Community Emergency Food and Services in Reno would kind of disabuse any of us of that notion." She suggested seeking food assistance was a very humiliating experience, which most people who did not need food would avoid. Chairman Bache closed the hearing on A.B. 487. ASSEMBLY BILL NO. 506 - Requires master plan to include plan for development of affordable housing. Assemblyman Barbara E. Buckley, District 8, testified. She advised A.B. 506 would require a master plan to include a plan for development of affordable housing. She said her intent, in proposing A.B. 506, was to cause governing bodies to make more specific plans for affordable housing and to include those plans in their master plans. She said she wished to promote orderly planning and to cause neighborhood input to be considered in such planning. She suggested, if neighborhood input was considered when making a plan for neighborhood development, an affordable housing project, which was included in that plan, would not be discriminated against because of prejudice. Ms. Buckley advised many states had legislation like A.B. 506. She stated, "...what it basically would require is a housing element." She explained that "housing element" would address with greater specificity ways in which to create affordable housing. She suggested areas where affordable housing could be located might be identified but developers would not be deprived of the right to build something other than affordable housing in those locations. She indicated governing bodies might consider appropriate ways to provide affordable housing within single-family residential developments. Mrs. Lambert asked whether it was Ms. Buckley's intent, through A.B. 506, to impose a greater mandate on all counties to provide for affordable housing in their master plans. Ms. Buckley replied she believed it important to provide affordable housing and for rural communities to consider the need for affordable housing but it was not her intent to impose a government mandate on communities with small populations. Mrs. Lambert referred to the sentence commencing on line 14 of page 5 of A.B. 506. She commented Washoe County had something no other governmental entity in Nevada had, which was regional planning. She advised the zoning ordinances and master plans of all local communities in Washoe County were required to conform to the regional plan. She explained that meant "...if you put something in the regional plan, you automatically change the zoning ordinance." She suggested the sentence to which she had referred would impose the same requirement on other governing bodies to conform to the adopted plan of development and asked whether Ms. Buckley intended "...that by the planning process you will change the zoning ordinance." Ms. Buckley suggested the question Mrs. Lambert had raised should be discussed in subcommittee. Mrs. Lambert indicated Section 10 of A.B. 506 ignored the statute prohibiting unfunded mandates and asked whether that was Ms. Buckley's intent. Ms. Buckley indicated, to the extent a local governing body would be required to expend money in order to comply with the provisions of A.B. 506, that was her intent. Mr. Harrington expressed support for A.B. 506. Mr. Paul Gowins, Chairman, State Independent Living Study Committee, Nevada Opinion Leaders Forum, testified. He said he supported A.B. 506. He advised, for people with disabilities, affordable housing was an issue of extreme importance. He said the average income of disabled individuals was approximately $12,000 per year. He indicated he believed A.B. 506 would provide for affirmative action with respect to creating affordable housing. He stated the group of people he represented would like to see A.B. 506 amended to cause the word "accessible" to be included in conjunction with the word "affordable" each time "affordable" was used. Mr. Gowins provided further testimony in written form (Exhibit L). Ms. Linn Thome, Manager, The Assistive Technology Center, Nevada Community Enrichment Program, testified. She explained the Assistive Technology Center dealt with both adults and children who had disabilities. She asked, when the committee considered affordable housing, it also consider accessible housing. She contended there was an acute need for accessible housing in Nevada. She stated, at some point in his lifetime, one of every seven individuals would incur a disability. She declared both accessible and affordable housing must be made available for those individuals. Ms. Thome indicated several accessible housing projects were being developed but said the need for such housing was so great there were waiting lists covering periods as long as three to five years. Ms. Beverly Perry testified. She indicated she was appearing before the committee in three capacities. She advised she was manager of the satellite office of the Northern Nevada Center for Independent Living and ran its rural program, which covered all of northwestern rural Nevada. She explained the Northern Nevada Center for Independent Living dealt with disability issues such as community education, resources and "self-advocacy" training for individuals with disabilities. She stated she was also on the board of directors for a non-profit organization which converted existing buildings into affordable, accessible, owner-occupied housing. Ms. Perry said she had experienced the need for affordable housing. She stated, based on her various kinds of experience with affordable housing, she would say prejudice was generally the reason affordable housing was not wanted. (In a neighborhood). Ms. Perry advised Nevada's consolidated plan said more than 26 percent of Nevada households experienced housing problems. She explained that meant, usually, those households were expending more than 50 percent of their incomes for housing. She indicated that 26 percent did not include households comprised of more than one family unit. Ms. Perry stated, in a state survey of individuals with disabilities, conducted during the past year, 90 percent of the individuals interviewed said affordable, accessible housing was either inadequate or nonexistent. She asserted there was presently a wait of from one to three years to acquire subsidized, affordable housing. Ms. Perry said those whom she represented would like to see A.B. 506 include "...slash accessible..." wherever it used the word "affordable." She contended failure to plan for affordable, accessible housing created ghettoes. She declared an individual who had a disability and a low or moderate income should not be forced to live in a ghetto. Ms. Perry stated, "The state plan says that very few...so-called accessible units of housing are truly accessible." She said there was a need to ensure standards for accessible housing were both high and uniform. Ms. Perry declared prejudice could not be the determining factor in the development of affordable, accessible housing and contended existing government programs could not be relied upon to provide affordable, accessible housing. Ms. Linn Thome gave further testimony. She advised, according to the 1990 census, in the Las Vegas metropolitan area alone, more than 95,000 people were functionally disabled of which 55,000 people were physically disabled. She said current estimates placed the number of disabled people at 115,000 and the number who were physically disabled at 66,000. She reiterated the suggestion the term "accessible" be included with the word "affordable" in A.B. 506. Ms. Gertrude Eberly testified. She advised she was a retired civil servant who had been considered a member of the middle class. She said, after having been retired for 17 years, she found, because of inflation, she was no longer a member of the middle class and was searching for affordable housing. She explained she could not qualify for subsidized housing and found herself living in an old, dilapidated community where the residents did not take care of their homes. She stated, in investigating affordable housing, she found available, affordable housing consisted of multiple-unit buildings, usually of two stories, and there was a two year waiting period for such housing. She said she was partially blind and wanted a ground floor apartment and advised there was a three to four year waiting period for an affordable housing, ground floor apartment. She said it was her observation that disabled individuals were being forced to live in older, run-down homes in order to have ground floor, accessible living quarters. She urged the committee to consider the issue of accessibility of housing along with the issue of affordability. Mr. Charles Eldridge, Deputy Administrator, Housing Division, Department of Business and Industry, State of Nevada, testified. He said the Housing Division supported A.B. 506 and offered the Housing Division's services in providing and funding affordable and accessible housing in Nevada. Chairman Bache closed the hearing on A.B. 506 and said he would name a subcommittee on A.B. 444 and A.B. 506 at the committee's next meeting. There being no further business to come before the committee, Chairman Bache adjourned the meeting at 11:00 a.m. RESPECTFULLY SUBMITTED: Sara Kaufman, Committee Secretary APPROVED BY: Assemblyman Douglas A. Bache, Chairman Assemblyman Joan A. Lambert, Chairman Assembly Committee on Government Affairs April 27, 1995 Page