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Real Estate
Affordable housing experiment passed up
By Jennifer Shubinski / Staff Writer

This parcel near Liberty High School in Henderson, which is owned by Kimball Hill Homes, was originally slated for work force housing.
Photo by R. Marsh Starks

Affordable housing took a backseat to market pressures after the city of Henderson dropped restrictions from 115 acres owned by Kimball Hill Homes slated for some work force housing.

The stipulations were dropped after 1,940 acres sold to Focus Property Group for $557 million at the most recent Bureau of Land Management auction. That land didn't sell the first time around when the city would have required inclusionary zoning, also called work force housing, on the land.

Inclusionary zoning is a way that municipalities mandate that houses be sold to people in a specified income bracket who can't otherwise afford the going home price.

Henderson officials, concerned about the huge increases in new and resale home prices, began exploring the possibility of inclusionary zoning last year -- and placed a restriction that would have mandated that 10 percent of homes built be sold at below market rate prices on two parcels that went up for sale at a BLM auction in November 2003 -- the 1,940-acre parcel and the 115-acre parcel.

The work force housing plan was removed from the 1,940 acres, south of the Henderson airport, after it failed to elicit any bids at the November auction. The 115-acre parcel, near Liberty High School in Henderson (off Bermuda Road north of Starr Avenue) sold for $28.4 million at that auction.

City officials said they decided to remove (with the council's approval) the restrictions from the 115-acre Kimball Hill Homes piece because, in the city's view, there just wasn't a good plan in place to track and implement work force housing -- even though Kimball Hills is at least a year away from selling any homes.

In the case of both parcels, the work force housing restrictions would have called for 10 percent of homes to be sold at below market rate prices.

The city said it is still interested in providing future "attainable" housing in Henderson, yet it passed up the perfect opportunity to try it out.

Kimball Hill Homes executives bought the 115 acres last November with the understanding that they would have to provide work force housing. The company plans to build about 650 detached and attached homes on the land, meaning under the now-eliminated plan, 65 houses would have been sold at below market rate prices.

That is a reasonable number to track and manage, and use almost as an experiment for future work force housing in Henderson.

While Kimball Hill may object to having its product be used as an "experiment," it did buy the land and was agreeable -- at least in public -- to building work force housing.

Some have speculated that Focus Property Group, or Pulte Homes, or whoever was interested in purchasing the 1,940 acres should have just bought the land last year (with the idea that it would have been cheaper at the time) with the restrictions, and then gone back to the city to beg forgiveness in hopes that the work force housing would be removed or eliminated.

Local experts have said a move like that would have been questionable, and it would have left the city open to lawsuits from bidders who were under the impression that the land was being sold with certain restrictions. Is the 115-acre piece any different, even though it sold for almost 65 percent above its appraised value?

In the end, the price for the 1,940-acre piece was bid up the second time around to more than $300 million over the appraised value. There's no telling how much the land would have sold for in November if developers hadn't been sitting on their hands, but are the 10 percent of homes that would have been built on that land and sold to working families worth $300 million?

Many builders and developers are vehemently opposed to work force housing. Some say it undermines our free market system, others say there is no way to properly implement it, and still others say it will drag the home values of an area down.

Many builders have suggested that instead of work force housing, Henderson allow higher density (i.e.: more homes per acre) to help get the cost down.

Companies are looking out for their bottom line, and no one can fault them for that.

But city officials are supposed to look out for the city and the people who put them there who otherwise don't have a voice.

Now it's city officials who said that they will have to go back to the builders to see whether somehow, someway, they can negotiate more affordable housing on land within Henderson's limits.

Officials with the city of Henderson said they are committed to making for-sale housing available to anyone who wants to live in Henderson.

The city does have a neighborhood services department that does its best to help get people into homes, but its work is getting tougher as home and land prices continue to soar.

In Henderson, the median price for a new home, attached and detached, in April was $289,501, compared with $232,722 in April 2003. The average new home sale price in April in Henderson is much higher: $354,041 compared with $274,659 at the same time last year, research firm SalesTraq reported.

The median cost of a resale home in Henderson, attached and detached, in April was $270,000 compared to $187,000 at the same time last year. The average price of resale homes in April in Henderson also is much higher: $308,467 compared with $220,402 at the same time last year, SalesTraq reported.

The reality is homeownership in Henderson is no longer an affordable option for many teachers, nurses, librarians and service workers, and the city had the chance to do something, even if on a small scale, to make a difference.

In other development news:

• Plise Development Cos. began construction on its Painted Desert Professional Park, at U.S. 95 and Ann Road at the entrance of the Painted Desert Golf Course. The 137,210-square-foot office and retail complex is expected to be complete the second quarter of 2005. Project costs are $30 million.

The 8-acre master-planned office park will include a 127,000-square-foot office building, a three-story parking structure and two retail buildings fronting Ann Road.

• Taryn Rose International, a shoe store that sells medically correct fashion footwear, will join the roster of stores at The Forum Shops at Caesars 175,000-square-foot expansion, scheduled to open in October.

• Lucky Brand Dungarees opened its third Las Vegas-area store at The Forum Shops at Caesars. The other two stores are at Desert Passage at the Aladdin and at the Fashion Show mall.

Jennifer Shubinski covers real estate and development for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached at (702) 259-8832 or by e-mail at js@lasvegassun.com.

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