Reality check for Northern Nevada real estate industry?
Northern Nevada needs thousands of new homes to meet demand from a jump in jobs and population growth expected in the next few years.
That was the message at the Northern Nevada Housing Summit, a gathering of home builders, economic developers and elected officials from around the area hosted by Gov. Brian Sandoval and Bruce Breslow, director of the Department of Business and Industry.
“The region is in middle of an economic transformation that is going to be lasting. We will have job growth that is sustainable and very strong, in the 4 to 4.5 percent range for a while,” said Steve Hill, executive director of the Governor’s Office of Economic Development, last week.
“The focus has been on Tesla, but if you strip away Tesla, the region is still performing strongly.”
But current residential construction is not keeping pace and home and land prices are beginning to skyrocket, said Hill and others.
“We have a housing crisis,” said Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada.
Kazmierski gave a preview of the Economic Planning Indicators Committee report, a report due by the end of summer outlining the effects of the expected population growth.
The report was prepared by a large group of regional interests, including representatives from the cities of Reno, Sparks and Fernley, Washoe and Storey counties, EDAWN, GOED and the University of Nevada, Reno, in an effort to create consistent, universally used data.
The report looks at 18 Northern Nevada markets and it projects — conservatively, said Kazmierski — 52,400 new jobs and population growth of 64,700 in the next five years.
Kazmierski, Hill and others were targeting their message at area home builders, who were burned when the housing boom went bust close to a decade ago and are reluctant to ramp up again.
“We should be building not 200 homes but more like 2,000 homes,” Kazmierski told the audience of 60 attendees. “This is different. The pipeline is full. This is different than 10 to 15 years ago.”
Jesse Haw, president of Hawco Properties, speaking on a panel of builders, said he remains careful about building no matter how optimistic the numbers.
“We’re a cautious group right now,” said Haw. “And there are not a lot of good skilled trades people out there. It will take some time to bring them back.”
Teresa Di Loreto, Di Loreto Homes of Nevada, which recently built 147 homes at La Casata in Reno and is working on 58 more, said problems plague the home-building process.
“Our biggest challenge right now is getting a final map. We waited three months,” she said.
Others agreed that staff shortages in municipal planning departments often lead to project delays.
“We just processed three tentative maps to final maps and the process took us a year,” said Steve Thomsen, Nevada general manager of Ryder Homes.
But at least one problem has improved. The 2015 Nevada Legislature passed construction defect reform, backed by the building industry. The change, said Thomsen, is pushing Ryder into building condominiums, a market that had all but dried up in the area.
That was good news to the economic developers who were encouraging builders to not only build more homes but to broaden their product offerings to include smaller houses and multi-tenant buildings such as condos to appeal to the younger, more urban worker that should be coming to the area.
Several local officials, including Sparks Mayor Geno Martini and Carson City Mayor Bob Crowell, also spoke.
Austin Osborne, senior planner with Storey County, home to the Tahoe-Reno Industrial Center where Tesla is building its battery plant, said the county has approved land for 3,400 home sites near the industrial park.
“For a lot of people in this room that’s news,” said Business and Industry’s Breslow. “Storey County is getting into houses.”