Affordable Housing Becoming
a Larger Issue in Southern Nevada

An Interview with Kenneth LoBene, Field Office Director for the Las Vegas office of the U.S. Department of Housing and Urban Development

Las Vegas Chamber of Commerce Vice President of Public Affairs Christina Dugan discusses the issue of affordable housing with Kenneth LoBene, Field Office Director for the Las Vegas office of the U.S. Department of Housing and Urban Development.

Christina Dugan: How is the issue of affordable housing affecting our community?
Kenneth LoBene: Affordable homeownership is out of reach for many Southern Nevada families, and afford-ability for lower-income families has deteriorated over the past several years. Far too many individuals and families with good, steady incomes simply cannot afford to purchase a home.

A number of economic analyses demonstrate the growing lack of affordable housing. The home builders and the realtors utilize sophisticated economic analyses to produce affordability indices. They all indicate the same prognostication that those whose incomes range from 80% to 120% of the area median are not able to purchase the average home in the Las Vegas Valley.

In fact, the U.S. Census Bureau's most recent American Housing Survey shows that more than 70 percent of families with incomes in the lowest quintile spend 30 percent or more of their income on housing, and 46 percent spend more than half of their income on home mortgage or rental payments. For more information on the American Housing Survey, go to http://www.census.gov/hhes/www/housing/ahs/ahs.html.

CD: The problem of affordable housing has typically been associated with low income workers. Do you believe the middle class is increasingly affected by this problem?
KL: Anyone who has read the newspaper in the past year knows that the lack of affordable housing now affects a larger group of households. Including the group making moderate incomes, referred to as the "workforce households." The need for moderate-income housing is growing more rapidly than the need for any other type.

CD: In your opinion, why is home ownership so crucial?
KL: I believe that every American should have the opportunity to experience the numerous economic and social benefits homeownership provides. In terms of economic benefits, homeownership represents a powerful tool for building economic stability and self-esteem and is the single largest expenditure and the source of wealth for most families and individuals. It also contributes to a strong national economy, creating millions of jobs and generating billions of dollars in wages and tax revenues each year.

The nation's housing sector has been the cornerstone of economic activity over the past several years. When the nation's economy sputtered, housing was strong. With homeownership rates at an all-time high of more than 69 percent, the economic value and importance of owning a home cannot be overstated. We recently calculated the economic loss from those who pay more than 30% for their housing in the Valley. It is more than 800 Million dollars per year. This does not include the economic development loss from those businesses who have decided to not make the Valley their home.

CD: What are your suggestions to deal with this mounting concern?
KL: Knowing the benefits that derive from an adequate housing stock across all economic stratas and understanding the negative effects that come from not adequately housing those who are the back bone of our economy, why can't we solve this problem? It is one that plagues community after community and countless have attempted to deal with the issue. Our community is attempting to find its own unique solution to this problem. However, no government solution can solve this problem. It will take a community effort.

CD: What are some of your ideas for battling the affordable housing dilemma as a community?
KL: There are strategies to address this challenge now underway in several cities, and even more cities are turning to each other to learn about solutions.

In San Jose, California, a very high cost area, the city's largest businesses assessed themselves a fee to create housing funds for their employees. Working with city officials, this program now is delivering housing. Phoenix, Arizona has expanded the development of an affordable housing strategy to include for-profit, non-profit, educational and industry partners. The City of Walnut Creek, Ca has adopted an ordinance imposing a fee on commercial development for affordable housing purposes.

CD: Thank you for your time.
KL: Thank you for the opportunity to speak about this important issue.