SITE SELECTION

Site selection refers to the process of examining and assessing different land (or existing developments in the case of preservation or adaptive reuse) to determine which site(s) best meets your goals in developing affordable housing. Site selection influences other aspects of your development project, including the overall financial feasibility, design, and ability to align with community needs. This section provides a brief overview of factors that need to be considered: physical and environmental, regulatory, and locational. For a deeper look at these, please see the Design and Approvals Section.

Physical and environmental factors

There are number of physical and environmental factors that must be taken into consideration to determine site suitability: slope, drainage, soil, lot size and shape, utilities and infrastructure and existing use. A full description of these can be found in Phase 4.

If any existing buildings on the site are currently occupied (by residential or commercial tenants), you will need to determine how to relocate them. If federal funding will support your development, your plan for relocation must comply with the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA), which establishes standards and requirements for property acquisition and current resident displacement. Depending on the nature of the displacement involved, compliance with this requirement may add significant costs to your development.

Regulatory factors

Regulatory factors you should consider include existing zoning (if this is applicable), and environmental and historic and relevant tribal review. These are all fully defined in Phase 4, Design and Approvals, but should be kept in mind when considering a site in predevelopment.

Locational factors

In addition to evaluating the characteristics of the site, you should also consider where the site is located with respect to your development model, the people it will serve, and your organizational values. For example, the proximity of the site to key services and amenities such as healthcare, childcare and education services may be relevant for the residents you plan to serve.

HOUSING AFFORDABILITY

Your development model should account for your housing affordability goals. Although you may need to make some adjustments based on the results of your feasibility assessments, having targeted affordability ranges will ensure you remain aligned with your goals and help you make other development model decisions.

Affordable housing for your target income ranges can be achieved using a variety of approaches described throughout this guide, but your targeting will influence the tenure and help you determine if you will need a subsidy to achieve and maintain affordability.

Calculating Affordability

Calculating what affordability means for your community and the project is important. What level of affordable housing is needed to meet community demand? How do we calculate that affordability?

Housing is generally considered affordable if housing costs represent no more than 30 percent of a household’s gross income on an annual basis. If a resident is paying more than 30 percent of their annual income on housing costs, they are considered cost burdened. For renters, housing costs are generally captured as the total annual costs of rent plus any utilities the tenant pays out of pocket. Capturing these costs annually as opposed to monthly is important because it levels out seasonal or other variations that may occur.

For the purposes of assessing the market and understanding project feasibility, affordable housing developers and practitioners often use a metric known as Area Median Income, or AMI, and express affordability as a percentage of the AMI.

AMI is important to understand because it includes local context in the numbers. Housing affordability can mean very different things in different parts of the state, and AMI allows us to understand levels of housing need across communities with different market conditions.

For example:

• Someone earning $30,500 a year living in Mineral County, where the AMI is $61,000 (HUD 2024), would have an income level of 50% of the AMI.

• If that same person lived in Lander County, where the AMI is $108,200, at an income of $30,500 they would qualify as earning less than 30% of the AMI.

• Again, if that same person lived in Clark County where the AMI is $87,800, they would be at 34% of AMI for the county.

In cases where a development is supported by a subsidy, such as LIHTC, the subsidy may impose restrictions on who can live in the unit based on the percentage of the AMI they earn. In order to provide housing for families at different income levels but still in need of housing, the development could, for example, have 20 apartments affordable to families earning 30 percent of the AMI and another 20 apartments affordable to families earning 50 percent of the AMI. All of these units are considered affordable but include families at different levels of need.

For LIHTC units, rents are usually set at 30 percent of either 50 or 60 percent of the AMI, depending on whichever limit was selected when the credits were awarded. Though this may appear to exclude those families earning incomes below 50% of the AMI, approximately 70 percent of LIHTC households with incomes at or below 30% AMI receive some form of additional rental assistance, according to the National Low Income Housing Coalition ³ Families that fall below 30 percent of the AMI are typically referred to as extremely low income (ELI). Other labels like very low-income, low-income, and moderate-income are also common.

In addition to adjusting for the AMI in the location, housing programs typically adjust income thresholds based on the number of people in the household. This helps to account for the fact that larger households will need larger, and therefore more expensive, units. For example, Table 1 below shows the dollar thresholds used by HUD for a household to qualify for income-restricted housing in Las Vegas-Henderson-Paradise, MSA in fiscal year 2024 relative to the number of people in the household. As you can see, “30 percent of the AMI” can refer to a wide range of incomes in the same county once household size is accounted for.

Housing programs also adjust income thresholds based on household size, accounting for the fact larger families will need larger units that will cost more. HUD publishes these thresholds based on bedroom size at the county and metropolitan statistical area (MSA) levels. They are updated each year in the HUD Income Limit Tool.

OTHER MARKET CONSIDERATIONS

Above we discussed the technicalities of affordability as it is laid out by federal funders and is required for grants, but often what is top of mind might be more specific issues related to the community. Issues such as poverty, poor living conditions, addiction and day-to-day hardship for the most vulnerable community members might have surfaced in a Housing Needs Assessment or in community conversations. It is important to consider these factors when determining the affordability structure.

In Nevada, in order to be considered for Housing Tax Credits, applicants must select one of the following elections: 

• A minimum of 40% of the units will be occupied by households with incomes at or below 60% Area Median Income (AMI). 
  In 100% LIHTC projects, all units must be rent and income restricted to 60% AMI or lower.
• A minimum of 20% of the units will be occupied by households with incomes at or below 50% AMI. 
  In 100% LIHTC projects, all units must be rent and income restricted to 50% of AMI or lower. 
• In compliance with the average income test.

What is Permanent Supportive Housing? 

• Permanent: clients have autonomy, a lease, and there is no time-limit on tenancy—this is not transitional housing);
• Affordable: tenants never pay more than 30% of their income);
• Voluntary services: service provision is assertive, trauma-informed, multi-disciplinary, housing focused, on-site, and voluntary (tenants are allowed to live there whether they participate in services or not);
• Entry is low-barrier: tenants are not required to hit any program benchmarks before having access to housing, nor are there traditional screening barriers (like credit history, for example)
•  Projects dedicated to our most vulnerable populations: chronically homeless, criminal history, high acuity, and co-occurring disorders(behavioral and physical health barriers including disabling conditions like chronic substance use disorder)

Aligning with AB310 the Nevada Supportive Housing Development Fund:

With the passing of AB310 The Nevada Supportive Housing Development Fund in the 2023 Legislative Session, now is the opportunity to build capacity to successfully leverage these funds, build infrastructure, and showcase the impact this model can have on reducing homelessness in Nevada.

Permanent Supportive Housing projects can support a variety of populations including:

Formerly homeless

One of the largest populations served by permanent supportive housing, formerly homeless individuals include any individual who has been homeless or doubling up with friends or family members for a year or more. It may also target individuals who cannot access other low-income housing options available, due to former evictions or drug history.

Living with Disabilities

For many of the most vulnerable populations, living with disabilities such as mental illness and chronic health conditions can make it difficult to maintain a stable home without assistance. Permanent Supportive Housing typically combines housing with other supportive services such as mental health services, health services, addiction treatment, and more, in order to address the needs of residents living with disabilities.

Seniors

Permanent Supportive Housing is also crucial in providing stable housing for the low-income aging population. Typically referred to as Senior Housing, PSH for this population will also generally include a wide range of supportive services focused on the health and wellness of residents.
 

Additional Resources

The Fidelity of the Model:

Center on Budget Policy and Priorities

CSH Supportive Housing 101

United States Interagency Council on Homelessness

Detailed Steps for Quality PSH:

CSH Quality Toolkit

Data Proving the Impact of PSH:

Supportive Housing: A Proven Cost Effective Investment

The Impact of Supportive Housing on the Costs of Chronic Mental Illness

Study finds Permanent Supportive Housing is Effective for Highest Risk Chronically Homeless People