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You call this affordable?

The Tahoe Regional Planning Agency has the power to require developers that tear down residential property to provide replacement housing for displaced tenants. But what happens when the replacement housing is not affordable?

Falcon Capital, parent company of Lake Vista Apartments, bought Lake Park Apartments on Kahle Drive three years ago with the intent to transfer the market-rate allocations to a 138-unit, time-share project in Round Hill. But as part of the TRPA permit, Falcon Capital is required to provide affordable housing for displaced tenants of Lake Park.

“The conditions of the project are that no families would be displaced as a result of the project,” said Pam Drum, public affairs coordinator for the TRPA.



But with the increased rents and minimum income requirements, residents of Lake Park may find getting accepted at the Lake Vista Apartments difficult at best.

“You can’t replace substandard housing with new housing for the same cost,” Drum said.




She added that the TRPA has done what it can to create affordable housing, given what options are available.

“We have used the permitting process to the greatest extent that we can to help ensure that the people are not displaced given all the federal, state and regional rules and regulations that apply in an affordable housing situation,” Drum said.

But some argue the TRPA creates more problems.

“The problem you got up there is (the Tahoe Regional Planning Agency) creates a lot of barriers, as far as fees being charged and the amount of land that can be developed for affordable housing,” said Jack Riley, a partner for Lake Vista Limited Partnership, proponents of the project. “One of the toughest things in the Tahoe Basin is finding a site to build on.”

Riley’s partner at Lake Vista Limited, Randy Lane, who also sits on the TRPA planning advisory commission, is on vacation and unavailable for comment.

To qualify for a one- or two-bedroom unit at Lake Vista Apartments, located on Market Street off Kingsbury Grade, applicants must earn between $19,692 and $45,000 a year. Anyone making less than $19,692 a year or $9.47 per hour is ineligible to qualify for the cheapest one-bedroom apartment, which is $547 a month. Applicants must earn three times the rent to qualify, which is as high as $950 a month for one-bedroom apartments and $985 for two-bedroom apartments.

“It sounds like we have some work to do at the TRPA,” said Juan Palma, executive director for the TRPA. “My intent is to have affordable housing and that is good. What we need to work on is who can afford this affordable housing.”

Nearby residents were opposed to the Lake Vista Apartments when it was going through the public review process in 1999 because they thought it would decrease their property values. This project will replace substandard housing with low rents with new housing with higher rents and stricter regulations.

“Many of the people at Lake Park who were displaced were allowed to have multiple families living in a two- or three-bedroom apartment, and the Lake Vista Apartments will have management that will not allow that because of federal regulations,” said Don Miner, Douglas County commissioner and a member of the TRPA Governing Board.

At Lake Park rent for a studio apartment is $500, one-bedrooms are $585 and two-bedrooms are between $665 and $750, according to Becky Penn, building manager for the complex.

Although some of the rents at Lake Vista Apartments are comparable, at least half are significantly higher. Rents for one-bedroom apartments will be between $547 and $950 a month; rents for two-bedroom apartments will be between $657 and $985 a month, according to figures supplied by Lynne Morse, field representative for Manco Abbott Inc., the property management company working for Lake Vista Limited.

The $7.5 million, 64-unit Lake Vista Apartments will be built in two phases. The first phase will have 24 units and will be ready for rent in July, Riley said. The second phase, which will comprise nine buildings with the same layouts will be finished in November or December 2002.

Why this project meets federal standards:

Providing affordable housing in the Lake Tahoe Basin is a tremendous challenge to developers, even when using federal and state funding to help offset the massive costs of construction and permitting.

Projects that are deed restricted for affordable housing often cost too much for many low-wage earners.

“You can’t afford to build it,” said Douglas County Manager Dan Holler. “You’re asking someone to build a home and then take a loss on it.”

Part of the problem is in the standards set by the Federal Housing and Urban Development Department, which sets the median income levels that determine affordability. In Douglas County, the median income is $60,400.

This makes building affordable housing projects near the Stateline casinos that would cater to the needs of low-wage earners very difficult, and some argue that federal figures are inaccurate because of the different economies in the Carson Valley and in the Tahoe Basin.

“Income levels are skewed by the income levels of the lake,” said Mary Lou Bentley, executive director of the Western Nevada Development District, an organization that helps distribute federal funding for affordable housing projects in Western Nevada.

“The federal government doesn’t like to change and dividing a county in two is almost unheard of. But unless they make that change, we are going to continue to have to address affordable housing needs with income levels that are deceptive at best.”

She said, in the Tahoe Basin, incomes are often insufficient compared to the cost of living.

“We have argued that (the federal government) needs to look at income levels, rent levels and purchase values at the (Tahoe) Basin, and not try to blend it with the (Carson) Valley economy, because it does not pencil out,” Bentley said.

According to Jack Riley, a partner for Lake Vista Limited, several funding sources are contributing to offset construction costs for the $7.5 million project: $922,000 in state HOME funds, which are federal funds distributed by the states; $1.9 million in federal tax credits; $2.7 million in tax exempt bond financing; and $250,000 in consolidated development block grants, which are federal funds that were distributed through Douglas County.

“Lake Tahoe is one of the toughest places in the country to do affordable housing,” Riley said. “The challenges in housing the people in the $8-an-hour range are staggering. You have to find the land, which is in limited supply, and then you have to do a multi-subsidizing deal.”

Don Miner, a Douglas County commissioner and member of the TRPA governing board, said if environmental restrictions were alleviated, which would reduce developer costs, it would not have a significant impact on the environment.

“Because of the high cost of land at the lake it is virtually impossible to get affordable housing projects in that the local worker can afford,” he said.

“Restrictions and impediments imposed by the TRPA – in effect by being so aggressive and trying to control the environmental impact – you put the economic impact at risk for the larger employers, because they are finding it very difficult to find employees and suitable housing for those employees.”

Lake Park Apartments was five buildings, but three were demolished since Falcon Capital purchased the property in 1999. The remaining two will be demolished in September 2002. The buildings had a total of 187 units, but since only 120 were livable, Lake Vista Apartments, according to TRPA regulations, satisfies half the replacement housing requirement. Lake Vista Limited is required to either rehabilitate another structure or build additional units to make up for some of the other units. Lake Vista Limited, however, will receive bonus units or free market rate allocations from the TRPA in exchange for a stormwater retention pond on the Lake Park site, which is in a stream environment zone. The number of bonus units will be in proportion to the environmental rehabilitation, Pam Drum, the public affairs coordinator, said.


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