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California housing problems are spilling across to neighbouring states

Reno, Nevada

A GROWING homelessness crisis. Complaints about traffic congestion. Worries that the economy is becoming dominated by a wealthy elite.

Those sound like California's problems in a nutshell. But now, they are also among California's leading exports.

Just ask the citizens of this city, where growing numbers of Californians and companies such as Tesla have migrated to take advantage of cheap land and comparatively low home prices. A four-hour drive from Silicon Valley, across a mountain range and a state line, Reno is finding that imported growth is accompanied by imported problems.

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On a recent evening, Chance Reading, an electrician who has lived in the area for 15 years, went to the City Council chambers to speak against a proposed development near his home in Verdi, on Reno's outskirts. He was part of a standing-room crowd that lined the back wall and spilled into the lobby. Neighbour after neighbour walked to the microphone to complain about clogged roads, overcrowded schools and a creeping sense that local residents were being overwhelmed by development.

"Our big message tonight is really about the pace of growth, and trying to have a sustainable growth pattern versus a cycle of boom and bust," Mr Reading said before the meeting.

And it is not just happening in Reno. Austin, Texas; Boise, Idaho; Denver, Colorado; Phoenix, Arizona; Portland, Oregon; and Seattle, Washington have all seen a huge influx of homebuyers from California, according to the real estate website Zillow. A common thread is that each of these cities faces a growing housing crisis that, while not as severe as California's, is setting off many of the same debates.

In Washington state, the legislature considered - but ultimately killed - a bill that would let cities such as Seattle impose rent control. Affordable housing has emerged as the top priority for voters in Denver, while groups in Boise are organising to fight "irresponsible development".

Such concerns are a far cry from those of even the recent past in Reno, where the economy has long been based on gambling and the city's status as a small, sedate northern answer to Las Vegas.

A little under a decade ago, Reno was one of America's foreclosure capitals and the unemployment rate was just below 14 per cent. The gambling industry was skidding, tax revenue was plunging and construction companies were either going out of business or shredding their payroll from several hundred employees to a few dozen.

"Everybody was leaving, and Reno was basically closing its doors," Lance Gilman, an industrial land broker, said in a recent interview while wearing a cowboy hat, several gold rings, a gold chain and a gold watch. (This being Nevada, he is also the proprietor of a prominent brothel, the Mustang Ranch.) Today, the city and the surrounding metropolitan area of 450,000 people are so deep into another boom that local residents are starting to wonder if the rebound has been too much, too soon.

For decades, one of Reno's chief attributes has been its proximity to California. It has prospered by being a refuge for people and businesses looking for less expensive homes, land and labour, along with the added benefit of not having a state income tax.

And that is what is driving growth today. Net annual departures from California slowed to about 20,000 after the recession, but have climbed back to more than 100,000, according to the Census Bureau. "A lot of people feel like they want to get out while those markets are hot," said Jaime Moore, a real estate agent based in Reno who is with Redfin, a national real estate brokerage firm, speaking about the high-price cities in coastal California.

As a result, the Reno housing market has gone from moribund to scorching. As at February, the median home price in the metropolitan area was about US$340,000, more than double its recessionary trough of about US$150,000, according to Zillow. The inventory of homes for sale was down 22 per cent from a year earlier, according to Redfin, and sales were happening at a much faster clip. The typical home for sale was under contract in 55 days, 24 days faster than a year earlier. NYTIMES