Tom Polikalas recently returned to Nevada and was taken aback by what he found in the housing market.
Tom Polikalas graduated from Reno High School in the 1970s and was a prominent figure in Nevada politics of the late 1980s, founding a Washoe-based organization to fight against the proposed nuclear waste dump at Yucca Mountain. Then he spent a couple of decades first in Colorado and then in Southern Nevada managing energy co-ops. He has recently returned home to Washoe with his 12-year old son and is renting while looking for a home to buy.
“This is not the easiest place to find a home,” he said.
After unproductive searches in Reno, he is now considering looking for a home in Carson City or Lyon County. It’s the last thing he wants—it will increase his energy footprint if he has to make those drives—but there seems little choice.
Polikalas knows he is fortunate. He has options. By contrast, chat with folks at the Pyramid Laundry, a laundromat in Sparks that renters frequent.
“My rent has been raised twice in the last year. I want to move, but there aren’t a lot of better choices.”
“I was evicted. So was everyone. They wanted to renovate the whole property.”
“The landlord was pretty good about fixing things until lately. Now, he just seems to let them go.”
“I have a cat, which was fine when they had trouble renting the place and I moved in. I paid the pet deposit. Now that everyone wants a place to live, I’ve been told that they’re getting rid of the pets-allowed policy, and I have to give her away. … Do you know what it’s like to let go of a pet?”
“I just moved out. I had a great owner, but then he got a rental service, and they are mean. But it took me two months to find a decent new place.”
“The police have come twice to the adjoining apartment about the noise and fighting. The owner says it’s not her problem.”
The number of people at the laundromat happy with their landlords was about equal to the number who complained. One said:
“I have lived in the same place for six years. My landlady is wonderful. There have been times when I have not been able to keep up with the rent, and she was understanding. I’ve watered around the apartments when she was out of town, on vacation. We shop together. I doubt it ever occurred to her to take advantage of this housing shortage.”
Most landlords and landladies are great, many tenants say, seeming to yearn for the way things were. “A good owner is worth his weight in gold,” one tenant said. But that sentiment is changing. Those who have taken advantage of the current housing shortage have taken a toll on the image of all owners. Landlords and landladies have often had their own stereotypes, like mothers-in-law. But in real life, a lot of tenants were satisfied, and until a year or two ago in the Truckee Meadows, complaints were much less frequent. Today, however, it is not uncommon to overhear complaints about owners at the next table in a fast food restaurant. And Nevada law gives people little help. Nevada is one jurisdiction that leaves tenants at the mercy of the market.
The City of Reno had a practice of approving development projects without expiration dates. If there was an economic downturn and an approved casino was put on hold, it could be built in 10 or 15 years.
In a case of spectacularly bad planning—or lack of planning—in the summer of 1978, six new casino-hotels opened in Reno. One of them was one of the largest hotels in the world. None were small. As the new boom in Reno received news coverage across the nation, people started pouring into the Truckee Meadows looking for work.
They could find it—indeed, they could work, and many did, more than one job. That was the main improvement. Otherwise, quality of life in the valley went straight downhill.
Traffic problems were endemic.
There was pollution of every kind.
The sewage treatment plant ran out of capacity.
The condition of streets, roads and highways deteriorated.
Soon, there were few places to live, and the prices for those that were available went sky high.
People were living in their cars on dirt roads outside town or at roadside rests on Interstate 80 out of the valley. And with a long line of applicants waiting and no laws protecting renters, tenants could be—and were—evicted with ease.
It could be called the summer when Reno went from being a town to a city. Overnight, a controlled growth movement became legitimate in a town where growth had previously been seen as an unalloyed good. Observing the Reno arch, with its slogan “The biggest little city in the world,” someone told the New York Times, “Ha, ha, if it was ever true before, sure isn’t now.” The Times story about Reno’s poor quality of life ran in newspapers across the country—the Bryan Eagle in Texas, the Palm Beach Post, the San Bernardino Sun, the Detroit Free Press, and so on and on. It would take years for Reno to recover from the publicity “benefits” of growth.
“It’s still a good small town, but I don’t like what’s happening here when the building trades, the developers, the politicians run things without any attempt at limiting growth,” said physician Douglas Jones, who had moved to Reno a decade earlier from Albuquerque.
“When we came here, it took us one hour and a half to both get jobs and a month and a half to get an apartment,” said Julie Priest O’Berry, who with her husband finally found a studio apartment for $200 a month, the equivalent of $750 in 2017 dollars.
It should also have been a learning experience. But when the 1979 Nevada Legislature met, just seven landlord/tenant bills were introduced, only two minor ones enacted. One of the two gave landlords tools to deal with people who used rentals for “immoral purposes” which, in this case, meant producing pornography. The other bill required that smoke detectors be installed in travel trailers converted by landlords into residential rentals.
All other measures failed, including an anti-discrimination bill, a bill to penalize refusing to rent to tenants with children, and a bill requiring that tenant deposits and advance rent be kept in interest bearing accounts. There was certainly no legislation introduced to, for example, tie rent increases to the cost of living, as some communities do. At the Nevada Legislature, business rules. It has lobbyists and gives “campaign contributions.” Renters generally do not have those advantages. And the legislature’s traditional attitude toward renters can be seen from the fact that landlord/tenant laws are listed in Nevada Revised Statutes under Title 10—property rights.
While nearly everyone concedes that most owners are responsible, law is often aimed at the results inflicted by the exceptions.
There is a theory that the temper of the times has changed at the legislature as the electorate has changed. In 2016, after Nevadans voted for a Democratic president for the third time in a row and reacted to a 2015 Republican legislature by turning it back to Democrats, legislators enacted a panoply of measures for women, minorities and veterans. They increased state parks, ended private school subsidies, advanced legal marijuana and restored felon voting rights.
If there was a legislature where tenants rights could be beefed up—or even just created—that was it. The Reno City Council, knowing what it was facing with the arrival of Tesla and other corporations, did not raise renters rights with lawmakers. It had representatives at the legislature, but that wasn’t one of its issues.
The Di Loreto doctrine
In 2015, a study commissioned by the Economic Planning Indicator Committee looked at the implications of local population growth from 42,400 to 64,700 by 2019. It also estimated creation of 47,400 to 56,600 new jobs.
Economic Development Authority of Western Nevada president and CEO Mike Kazmierski told the Reno Gazette-Journal, “I actually think some of those numbers are conservative. We’re going to need 5,000 new homes each year and have to build new schools to support this growth.”
“To give Kazmierski credit, I think he knew the governor’s economic development policies were going to jump job growth and population growth and wanted to push the local governments and homebuilders to be ready for the housing crunch,” Reno City Councilmember Jenny Brekhus says now. “That is a critique I have of [Gov. Brian] Sandoval—he did economic development on steroids to get the state out of the recession but ignored local government and school districts’ ability to accommodate growth propelled by his policies.”
She believes this will now be one of the major issues in the 2018 governor’s race.
Kazmierski’s prediction prompted a statement from builder Perry Di Loreto of Di Loreto Homes that attracted wide attention. “I don’t believe we can build 5,000 homes each year,” he said. “I have an issue with continuing to hype those numbers.”
Many longtime citizens of this valley noted that local builders in the past have stayed ahead of much fiercer housing demands than the current needs. Builders like Probasco and Sproul did a capable job in the 1950s and 1960s of dealing with the baby boom. What’s difficult about the current demand? Developers had plenty of advance notice from Tesla and other firms that the need was coming.
Di Loreto’s reluctance drew wide speculation. Many thought he did not want to build simple family homes for Tesla workers, or that he was reluctant to follow municipal policies on avoiding sprawl, and that this split the development community. Sparks Tribune columnist and NevadaLabor.com editor Andrew Barbano recently wrote:
“[T]he good ole boys have taken out permits … for homes costing $125-$150,000 to build. They will be sold for $350-400k. In that context, he’s right. There will not be 5,000 per year—of those.
“The times, they are a’changing. The coming wave is for multi-family dwellings, whether condos or apartments, in the middle of where the action is. Newcomers don’t want to commute from Cold Springs or Spanish Springs. In this context, Hillary Schieve and Jenny Brekhus have their fingers on the pulse: infill rather than more sprawl (which may result in a full service grocery store coming downtown at long last—as long as the Caranos don’t buy it for a casino expansion).
“Some conventional builders like Di Loreto are not willing to look outside the box to see where future opportunities lie. He prefers the old-style and more profitable growth pattern. So the young and hungry newbies will go where the growth is—the inner core and infill. They will often use local, qualified workers if recent patterns hold.”
This last reference draws attention to the way some developers, before committing to build, took advantage of the approaching housing need to make demands on city governments. Not long after Di Loreto’s comments, builders pushed Reno and Sparks city councils for repeal of certification requirements for plumbers and electricians.
In Sparks, a one-time union town that more recently has adopted policies of fostering corporate welfare, officials said they had not been enforcing the requirements—and cited that as a reason to comply with the builders’ demand. City officials rushed to agree to the demands, saying that building inspectors are adequate to keep building up to code. During hearings on the matter, naturally there was no comment from potential homebuyers who might move to the area to work at Tesla and purchase apartments, condos or homes.
The Sparks council did not need to make the change. The building boom in the Rail City was already underway, and Tesla was 17 miles from Sparks, nearer than to Reno. But it did, anyway.
Barbano said the certification requirements, before repeal, may not have been enforced, but that inspectors told him they were used: “The reason the ordinance was never officially enforced is that its existence was used as an enforcement hammer—’Get those uncertified guys off the job or I’m writing you up tomorrow.’ Like magic, the unqualified workers quickly and permanently disappeared.” Used or enforced, the effect was the same, that only certified workers were on the job—until now. If it was used as Barbano described, the inspectors now have one less arrow in their quiver, at least in Sparks.
The Reno City Council also repealed its certification requirements, but then reversed that decision, eliciting a yowl of protest from developer J. Carter Witt, who implied he might withhold a previously pledged $116,000 for water clarity at Virginia Lake unless the council backed off. The council ignored him and reinstated certification requirements. It was a sharp contrast with Sparks. Brekhus said the Reno council was concerned about safety when it was facing rapid growth, speedy construction, and “a lot of speculative building that would then undermine neighborhood character.”
There is little good news for tenants in the Truckee Meadows. Building is not keeping up, which makes their vulnerablity more acute every day. Affordable housing is a rumor. Renters’ rights are barely on the radar, as the Reno City Council approved StoneGate, an upscale town of 5,000 about 15 miles north of Reno that would burn through commuters’ fuel and hardly falls into the category of affordable housing.
These days businesspeople like to trivialize what happened in 1978, rewriting history for newcomers who did not experience it. But there are those who remember.
“I love that the implications of closing the Wild Orchid for low-income renters did not even occur to the [Reno] council until push came to shove,” said a political consultant, referring to the council’s plan to close a downtown strip club housed in a hotel that will have to raise rents on its low-income tenants if the strip club closes.
“They were taken by surprise. What did they expect? They had to have known the loss of income would have consequences. There is a sleeping giant out there, low-income people. In 1978 and 1980, those were the voters who changed the whole temper of politics in the valley, and now the councils are courting the same backlash.”
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