A Commercial Real Estate Broker Gives Back Through Affordable Housing
“I had just gotten into real estate and my degree was in geological engineering and I was attracted to it because I got to build stuff and commercial real estate was starting to slow down in 2005 and or 2006,” Bram Buckley, a commercial real estate broker with Avison Young, says about why he got into affordable housing. “I was approached by some friends of mine to join the board of Northern Nevada Community Housing, and contribute a little bit. As soon as I got on the board, I really sort of fell in love with the work and being able to give back. I was on a couple of other boards but nothing really sort of tickled me like this one. In that time we've built, I want to say about five or 600 units of affordable housing in the Northern Nevada area, most of it in the Reno-Sparks area.”
As part of our interview, Buckley also wanted to define the words “affordable housing”. “There's two definitions for affordable housing,” he explained. “There is housing that people can afford and there's housing that the government has stipulated, that's a certain percentage of the Area Median Income and has a legal definition as affordable. And people mix these two things up all the time, but they have two separate meanings. So when I'm building affordable housing, I'm talking about building by the government standard for people who are 60% of Area Median Income or less, but in Reno, in the newspapers and you know, people sitting around a coffee shop, they will talk about affordable housing, and say ‘what can I afford to actually live in? You know, I make $70,000 a year and I can't afford to live here.’ And so those are two separate things,” he said.
A 12-Month Race to Remake the Joseph’s Inn into a Better El Centro
The current project Buckley is helping with concerns saving and rehabilitating Joseph’s Inn, which provides permanent housing for individuals without any shelter. Units are subsidized by the Reno Housing Authority with rent set at 30% of their gross annual income.
It’s proving to be a big challenge. “The problem is the building, the bones of it are from the 50s,” he said of the old building which will get back its original El Centro name. “And even with the rehab we did in the 1990s, it's still starting to really struggle and fall behind.”
New regulations often mean more expensive construction which is part of the overall problem. “All our buildings are constantly reviewed every year to make sure they're meeting energy efficiency standards and basic living standards. And Joseph's Inn is really slipping behind the times.”
Northern Nevada Community Housing says it is going to rent housing for current tenants, and then add kitchenettes, redo the entire interior and exterior, and then bring everyone who wants to come back in, back in.
“The system will pretty much be the same as it was before,” Buckley said. “Once it's rehabbed, it'll be the same system, same people, same vouchers. If we can do it within 12 months, we won't lose anything. So we're under the gun a little bit on that one.”
But he says it’s gratifying to see the community understand the importance of this particular project.
”A lot of people were excited that we weren't going to lose it because we were getting a little close to losing it,” he said. “The government was not going to recertify it because it wasn't meeting the standards and we would have lost all that and those people would have been back on the streets.”
Views on City Council Fees and Nevada’s Misguided Tax Structures
Buckley says he believes a newly released plan by Reno Mayor Hillary Schieve to incentivize 1,000 new homes in 120 days by pushing back city fees such as sewer fees, road infrastructure, impact fees, to the end of the process instead of the beginning is “an okay step.”
“I'm not sure it's going to drive more projects, but it sure won't hurt any projects,” he said. “Some of the things that slow developers down, especially in a booming market like this, would be blighted properties that have been owned by say a family for a long time and they have no incentive to fix it up because our tax structure is a little backwards. Our tax structure taxes you based on the age of the property, not based on the value of the property. So if you've got a building in downtown Reno that's paid off and it's an old warehouse or something like that, and it's been there for 70, 80 years, your tax bill is so low that there's no incentive to go out and fix it up and try and find a tenant and get good rent for it or sell it off … So that's one of the downsides of our kind of backwards tax system in Nevada.”
He says the sewer fees and impact fees also should be lowered for projects offering lower rents. “That would be a little bit of a seesaw. You give something, you get something,” he said.
Liking Ideas of Upzoning, but Criticizing Granny Pods
Buckley thinks Reno and other cities looking at denser zoning possibilities is a trend in the right direction. He says local authorities have been open to going beyond current zoning.
“As long as you can prove that the infrastructure can handle it,” he said, building can happen. “So if you're building an area where the schools can take it and the sewer system can take it and there's water, you can go denser, you'll most likely get that upzoned.”
The proposal for allowing granny pods that came and failed, though, he views as an “absolute joke” and waste of time. “How many units do you think they would have produced? 500. I mean, what do we have? 17,000 people moving here a month. I mean it's absolutely just the wrong scale and it's a total waste of time. I'll continue on that granny pod thing because it drove me nuts with the amount of people we have moving here and the number of single family homes they're building. Single family homes is the answer and … new apartments and density. “
Buckley says he’s also doubtful about rent control. “I know that there's obviously upsides and downsides and they haven't worked super well in a lot of the places they've been in,” he said. “I'm a pretty liberal guy, but I feel like that kind of thumb on the scale can have pretty serious consequences.”
Getting a Dwindling Amount of Federal Money
Buckley says there just isn’t enough federal money to solve the affordable housing crisis. He says the funding that does make it to Nevada is attributed by population size, giving the Las Vegas area the biggest share.
“Washoe County gets the next largest bucket and the rurals get the rest,” Buckley explained. “And all of that money that Washoe County gets, that we usually win, translates to a 44-unit complex that we build every year or purchase something. Last year we built a 50-unit complex and added 22 more units to it on 4th street. But that's all of the dollars that come into the state. Right?”
Buckley explains federally-funded projects are also more expensive. “We have to be absolute top of the market energy efficiency. Every single one of my units has to be Americans with Disabilities Act adaptable or accessible in a normal apartment complex … There's a million little rules like that, that make my projects 20 to 30% more expensive than a normal developer, in my opinion.”
Understanding the Anger
While low income residents see motels getting torn down, apartment buildings raising their rents, and other new developments catering to a more affluent clientele, Buckley says he understands the anger around affordability.
“If an apartment complex gets purchased and the rents were $600 and the new developer wants to,
they come in and rehab everything and then the new rents are going to be $1,400. And the little lady who lived there doesn't have a home anymore. She literally can't afford the new rents anymore. That is a problem. Reno has an affordable housing crisis …The only solution is more units that people can actually afford. If someone comes in and buys an apartment complex and puts millions of dollars into it, they're doing it for one reason, and that's to have more money fall out of the bottom of it at the end of the day.”
”I think that there are solutions,” Buckley said, wanting to finish our interview on a positive note. “I think there are little local solutions that will help. I liked [the mayor’s recent] idea. It's a step in the right direction. I think there are things we could do to make this better, but when we get tied down with the granny pods thing, which is just ridiculous, I mean it just doesn't meet the scale of the problem. There has to be some incentive to build more affordable housing because otherwise, with all the risks the developer takes, all the problems you have to go through, no one's going to not get top of the market rents unless there's some incentive. It's just not going to happen.”
Interview with Our Town Reno at the Avison Young Offices