The Committee on Government Affairs was called to order at 8:15 a.m., on Thursday, April 29, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Douglas Bache, Chairman

Mr. John Jay Lee, Vice Chairman

Ms. Merle Berman

Mrs. Vivian Freeman

Ms. Dawn Gibbons

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Bonnie Parnell

Ms. Gene Segerblom

Mr. Kelly Thomas

Ms. Kathy Von Tobel

Mr. Wendell Williams

COMMITTEE MEMBERS EXCUSED:

Mr. David Humke

Ms. Sandra Tiffany

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Gub Mix, Executive Director, Nevada Manufactured Housing

The following meeting was simultaneously videoconferenced with Las Vegas.

Senator Mark Amodei, representing the Capital Senatorial District, explained S.B. 323 provided for four diverse issues:

• The bill required the definition of a single-family residence include a manufactured home in zoning ordinance.

• Provided statutory authorization for local government building officials to regulate under the circumstances for which a manufactured housing permit could be applied.

• Made a covenants, conditions, and restrictions (CC & R’s) restriction state law for the first time in Nevada.

• Made taxable those manufactured homes pursuant to the provisions of the bill.

Senator Amodei explained the genesis of his involvement, and added S.B. 323 would amend NRS Chapter 278, Planning and Zoning. Because he had been engaged in a great deal of land use activity relating to development, although not of manufactured homes, he believed the provisions applicable to residential land uses in S.B. 323 were identical.

Senator Amodei said during past sessions in which regional planning had been authorized in both the Washoe County and Clark County areas, the legislature had provided the framework for a policy decision whereby the manner for implementing those policy decisions had been left up to the local governments. S.B. 323 provided for that. As a member of the Committee on Government Affairs for the 1997 Legislative Session, Senator Amodei listened to a presentation on manufactured housing with a stereotypical opinion. In view of how the product evolved and, in many instances, had surpassed a number of neighborhoods in which he had resided, his opinion had changed.

He urged the committee to keep the following facts in mind when listening to the proceeding testimony. Currently under existing statute any United States Housing and Urban Development (HUD) stickered home purchased could be placed in any residential area in Nevada not restricted by CC & R’s. Upon passage of S.B. 323 no HUD manufactured homes would be excluded, and would provide local planning officials the authority under HUD stickered homes to ensure those homes conformed to the communities into which they had been proposed. He added until the proposal of S.B. 323 there had never been a CC & R prohibition taken from state statute to state law status. Referring to section 3, subsection 4, Senator Amodei clarified the state had never acknowledged the authority of a restricted covenant in state statute. He suggested amending the provision with the intent of requiring the disapproval of a permit application containing a CC & R restriction for manufactured housing by a local building official.

Continuing, Senator Amodei stressed it was not the intent of S.B. 323 to force an inferior housing product into those neighborhoods wherein they did not look right. In a statewide sense, manufactured housing should be an option and available without the restrictive stereotypes to the constituents in urban and rural areas. He explained there were five states surrounding Nevada – with the exception of Arizona – whereby manufactured housing was allowed into stick-built neighborhoods.

Senator Amodei concluded by informing the committee S.B. 323 was not a bill that had not been scrutinized and seriously considered in the Senate. An amendment submitted by the state Realtor’s Association clarified if placement of manufactured housing was desired within an established stick-built neighborhood, one needed to undergo a planned review during the building permit application stage. He urged for the committee’s objective consideration.

In response to Mrs. Freeman’s question, Senator Amodei said CC & R’s were a type of covenant between the developer and the people buying with a development. Prior to the proposed legislation CC & R’s had been a civil function. If it had been thought those CC & R’s were being violated, an individual was required to go to court - on their own volition - in order to enforce those CC & R’s. Placing the CC & R provision within S.B. 323 would remove any uncertainty regarding valid restrictive covenants that prohibited manufactured housing. He explained there were four other bills under consideration that would significantly impact S.B. 323, particularly S.B. 192. He stressed if provisions regarding CC & R’s within S.B. 192 were enacted, S.B. 323 would be moot.

Assemblywoman Barbara Buckley, representing District 8, Clark County, said she supported S.B. 323, and delighted the committee with an account of her experience with the new type of manufactured housing. Prior to running for an Assembly seat, she also held the stereotypical views of manufactured homes.

Ms. Buckley stated she was concerned with discriminatory placement of manufactured homes. A manufactured home built to HUD standards was not allowed to be placed in a neighborhood with any Uniform Building Code (UBC) home even if that home looked better.

Ms. Buckley expressed her discontent with the difficulty and cost of moving a mobile home, and because of increasing annual lot rents individuals were forced to stay in parks absorbing exorbitant rent costs. Individuals desired more housing options and the ability to place a home that was as good, or better than others, on a piece of land. She remarked she had received a letter from a constituent who currently owned a mobile home and a plot of land. The individual desired to replace the home with a new manufactured home; however, he had been denied the ability to do so by Clark County.

Continuing, Ms. Buckley said the intent of S.B. 323 was not to prohibit those homes that did not conform, but to provide a location choice to those wishing to reside in manufactured housing. She urged the committee’s support of S.B. 323.

Mr. Mortenson remarked cost was an important issue, and asked either Senator Amodei or Assemblywoman Buckley to comment. Ms. Buckley replied manufactured housing was an affordable choice both for those wishing to upgrade and families purchasing a first home.

Responding to Mrs. Freeman’s question, Senator Amodei, referring to section 6, subsection 5, stated a manufactured home became real property for taxation purposes if it became permanently affixed to land that was owned by the mobile home owner on or after January 1, 2000. Information from the assessor’s office comparing the assessed valuation of manufactured homes on real foundations and comparable-sized stick-built homes. It had been determined both valuations were similar.

Assemblyman Mark Manendo, representing District 18, Clark County, testified he was in support of S.B. 323. The residents of the 13 mobile home parks within his district were also supportive and anxiously awaiting the outcome of the bill. He described the appearance of those mobile homes to the committee, and said because it was such a great investment, a large number of retiree’s and young families were purchasing manufactured homes; however, there were not enough parks in which to put them. He felt S.B. 323 was a vital piece of legislation not only to provide placement locations for those mobile homes, but also for first-time homebuyers who desired to purchase an affordable home.

Assemblywoman Genie Ohrenschall, representing District 12, Clark County, said there were more than 18 mobile home parks in her district. She related a story of a couple residing in a mobile home park that had been affected by constant rent increases. The county had advised the couple their home could be placed on the land they had recently purchased; however, during final preparations the county reneged. The couple was left with a lot on which no homes could be placed or built.

Continuing, Ms. Ohrenschall said she was in support of S.B. 323, and she applauded the conservatism of the bill.

Responding to Mrs. Freeman’s question, Ms. Ohrenschall said 50 to 75 percent of those individuals within her district were living on a fixed-income. Mr. Manendo added, about 65 percent of individuals in his district were on some type of subsidized income.

Mrs. Freeman asked if there were a substantial amount of mobile home parks in Clark County, to which Ms. Ohrenschall replied there were a limited number of parks. The newer parks prohibited older manufactured homes.

Mr. Manendo reiterated S.B. 323 was a vital piece of legislation and he desired to see more zoning laws enacted, which related to manufactured homes.

Mr. Manendo related to the committee a personal experience associated with manufactured housing. There was a neighborhood in his district that consisted of both manufactured and stick-built homes, on opposite sides of the road. He remarked the manufactured homes conformed more to the ideals of a nice neighborhood than did the stick-built houses.

Chairman Bache informed the committee and audience that Senate Bills 528 and 530 would be rescheduled to a later date. He advised those wishing to speak on S.B. 323 to keep their testimonies brief.

Charles Joerg, representing Nevada Manufactured Housing Association, said the association supported the amendments proposed by Senator Amodei. Referring to section 3, subsection d, part 2, Mr. Joerg suggested deleting verbiage proceeding the word "county." The association did not feel it was important for the legislators to dictate the duties to be performed by county officials.

Gub Mix, executive director, Nevada Manufactured Housing Association, read from prepared text (Exhibit C). Because it was felt S.B. 323 was Nevada’s best opportunity to promote reasonably priced, quality housing for its citizens, he supported the bill. He remarked there were six states surrounding Nevada – California, Oregon, Idaho, Utah, New Mexico, and Montana – that were currently giving manufactured housing equal opportunities with site-built homes. Upon passage of S.B. 323, Nevada would join those six states.

Continuing, Mr. Mix said manufactured homes were built to the United States Housing and Urban Development (HUD) Code, the only national building code in America, unlike site-built homes that were built to Uniform Building Code (UBC) standards. Because the HUD Code was one of the shelter industry’s toughest codes to which to build, manufactured homes were able to withstand being hauled hundreds of miles in inclement weather. Few site-built homes could survive that kind of stress.

If enacted, S.B. 323 would allow manufactured homes in residential zones in Nevada to be included in the definition of a "single-family residence." Because of the affordable cost of a manufactured home, 20 to 40 percent less than a site-built home, many families would be able to enjoy the benefits of home ownership. Those manufactured homes cited under S.B. 323 would be converted to real property and taxed on the same basis as comparable site-built homes, thus increasing Nevada’s tax revenue.

A myth associated with manufactured housing had been dispelled. Because there was no difference between the two types of housing when it came to appreciating value, the placement of manufactured housing into residential neighborhoods would not lower property values.

Mr. Mix explained there had been research conducted by several academic institutions on the effect of manufactured housing on surrounding property. In all cases, it had been determined the adjacency of those manufactured homes did not have a negative impact on surrounding property values. In addition a 1995 report by Carol Meeks, Ph.D. analyzed the life of manufactured homes. Both habitable life and year-round occupied life were estimated to be 55.8 years, which was similar to that of site-built houses.

Mr. Mix articulated one-third of all new homes sold in America were HUD-Code manufactured homes. Enacting S.B. 323 would provide families with affordable housing opportunities, as well as a choice of location.

Mr. Mix concluded by stating the association had been involved in a lengthy lawsuit with Clark County over the issue of zoning discrimination. The case had been brought to the Nevada Supreme Court, which had ruled against the association. The ruling was issued in January 1997. In May 1997, HUD published a statement of policy in the Federal Register in which a locality could not exclude or restrict manufactured homes that met federal standards if said locality accepted manufactured homes meeting other standards. By excluding or restricting manufactured homes built to the HUD Code, and accepting a factory-built building constructed to a state or local code, that locality established standards for manufactured homes that were different from federal standards. To the extent that provisions required an HUD Code manufactured home to meet another standard, local actions would be pre-empted by federal law. He said if that policy had been adopted prior to the association’s court case, the outcome in the Supreme Court would have been different. He urged the committee’s consideration and action on S.B. 323.

Mrs. Freeman commented a letter received by members of the committee related to the fact manufactured houses had not been developed in Nevada. Mr. Mix replied there were two reasons that occurred. Manufacturers generally grouped together in areas with major supply distribution centers. On a couple of occasions, those manufacturing companies had examined locations of factories in Nevada in which to build; however, in both cases, it had been felt the home local market would not sustain production due to state zoning regulations.

Mr. Mortenson remarked very strong emphasis had been made regarding manufactured homes not being mobile homes, and he asked if once a manufactured home had been developed if it was readily movable. Mr. Mix replied national statistics indicated fewer than 10 percent of those manufactured homes had ever been moved after being located the first time. The cost and difficulty of movement precluded movement from occurring often.

David Dahmen, civil and consulting engineer, Pacific Consulting Engineers, introduced himself as the owner of the company and provided the committee with additional background information. The intent of his appearance was to present a comparison between the HUD structural design requirements and those of site-built homes, as indicated in Exhibit D. Both homes were designed to carry the same roof loads, floor loads, and to some degree, wind loads for a representative area. HUD regulations required every portion of the manufactured homes be tediously examined, engineered, calculated, and correctly connected. Site-built homes could be constructed from a prescriptive portion of the UBC. He indicated chapter 16 of the Uniform Building Code provided to the committee as a part of Exhibit D alluded to that prescriptive portion of the code. The chapter summarized if a floor plan was reviewed and construction occurred within the provisions of the UBC, one did not require much of an engineering analysis with the exception of roof trusses or load carrying beams.

Mr. Dahmen said materials utilized for the construction of both site-built homes and manufactured homes were the same. All lumber was required to be grade-stamped. In previous discussions with the Senate, the issue of difficulty of alteration by the owner had been approached. Mr. Dahmen informed the committee alterations could be made to a manufactured home without a great deal of hardship to the owner as long as the proper engineering documents, plans, or specifications were followed. Obtaining the permit was no more cumbersome than obtaining the same permit for a site-built home.

There had also been concerns about whether manufactured homes in heavy snow areas could be constructed to meet heavy-roof snow load requirements. It was up to the local jurisdiction to determine if the proper documents were in place if a manufactured home was to be placed in an area with heavy snow load requirements. Mr. Mix informed the committee that he had designed manufactured homes with snow load requirements of 240 pounds per square foot (PSF), so a home could in fact be designed for heavy snow areas.

Continuing, Mr. Mix provided the committee with another difference in the structural designs for both site-built and manufactured home. Information had been presented to the committee with regard to wind speed exposures designated by HUD and UBC for Nevada’s manufactured housing. It had been stressed those homes would not sustain wind damage or blow apart.

Referring to page 2 of Exhibit D, Mr. Mix stated some people were still under the assumption that all manufactured homes were constructed with metal exteriors and thin wood paneling interiors, and would burn quickly. He informed the committee smoke detectors were required in all bedrooms and hallways of the manufactured homes. He made it clear the flame spread rating, as well as the electrical wiring and wire sizes, was the same for manufactured homes and UBC homes. No further discussion ensued.

Ken Rosevelt, general sales manager, Silvercrest Western Homes Corporation, said Silvercrest manufactured both HUD and UBC homes. He provided the committee with some background information on the number of homes constructed in 1998. Reading from prepared text located in the packet (Exhibit E), he stated manufactured homes were built in a controlled environment and constructed out of the highest quality standard building materials such as kiln dried lumber, which was tested for moisture content. He reiterated manufactured homes were built to HUD Federal Manufactured Housing Code with like standards of construction. Manufactured homes were inspected by Design Approval and Inspection Agency (DAPIA) that reported only to HUD and controlled the certification of every home built.

Continuing, Mr. Rosevelt explained the manufactured homes were built to the engineering and structural guidelines of HUD for the market in which the home was to be placed, and engineered for wind loads, thermal conditions, and seismic zones. All manufactured homes were required to meet those criteria. The committee had been assured those homes were safety tested and approved to ensure the home was ready for habitation prior to shipment from the factory.

Factors contributing to the affordable cost of all manufactured homes included materials and components purchased in volume. Fixed labor cost was another contributing factor. Mr. Rosevelt stated manufactured homes were completed on-site 45 to 60 days after delivery compared to the months it took to complete a site-built home.

Continuing, Mr. Rosevelt reviewed with the committee the only difference between the site-built homes and manufactured homes, which Silvercrest constructed was the use of copper water lines in the UBC single-family residence compared to the hard plastic waterlines built into manufactured homes. He also reviewed with the committee the cost differentials to consumers, which ranged between $10,000 and $15,000 for an HUD manufactured home and a UBC home. A price sheet had been provided to the committee (also in Exhibit E). It was his experience the HUD manufactured home added to an infill lot in an existing community would be an upgrade to the streetscape.

Mr. Rosevelt explained a typical UBC manufactured took a minimum of 60 days through their design process and the approval process at the state level, plus an additional 60 days for local approval and permits. Many projects were delayed up to 6 months and a high percentage of those projects had never been completed. In 1998, the Woodland, California division of Silvercrest processed designs for more than 70 UBC homes, but had only constructed 12 due to processes buyers conceived to be too burdensome.

The committee had examined pictures, included in Exhibit E, of HUD and UBC homes constructed by Silvercrest both for infill and private use. Mr. Rosevelt explained three of those HUD manufactured homes located in the Bay Area sold for $900,000 to $2 million.. Also included was a picture of a home that had been installed on a 22-foot steel support system located on a flood plain, in order for the committee to see how manufactured homes could be modified. Those very homes could be used in Nevada

Mr. Rosevelt concluded by saying consumers should not be penalized by being forced to spend their housing budgets on inefficient building procedures. He urged the committee’s support and passage of S.B. 323.

Karl Braun, president, Nevada Association of Manufactured Homeowners, presented his testimony by simultaneous videoconference from Las Vegas. He related a personal experience to the committee. Upon moving into a mobile home park he had been unaware of the annual rent increases and remarked currently he was all too aware of the increasing rent he faced. Living on a fixed-income after retirement, he discovered the Social Security subsidy was not enough to cover the constant rent increases.

Continuing, Mr. Braun stated there were currently 439 mobile home parks in Nevada. Of those, 60 parks charged over $300 per month, 40 parks charged over $400 per month, and a few charged over $500 per month. Because combined payments for land and home exceeded what was received in government subsidies, he was forced examine new locations; however, because he could not sell his older manufactured home for nearly as much as he purchased it, he would have to remain in the park.

Mr. Braun said individuals were faced with two options. One, to move to another park with no rent guarantees, or two, sell the home and move. If S.B. 323 was enacted, individuals would be given more options for relocating their manufactured homes. It was for that reason he supported the bill.

Directing her question to Mr. Joerg, Mrs. Parnell asked how would those individuals currently living in manufactured home built prior to 1996 be helped by S.B. 323. Mr. Joerg replied under the amendment placed in the bill, S.B. 323 would not help those with homes constructed prior to 1996. In such a case the only option would be to sell the older home (still located in the park), and use the money toward a newer model.

Ms. Parnell remarked S.B. 323 precluded any individual currently residing in a mobile home park. S.B. 323 was applicable to those manufactured homes placed into residential areas at the present time. Mr. Joerg replied that was correct.

Responding to Ms. Parnell’s question, Mr. Joerg said rent assistance was not directly addressed by S.B. 323; however, it indirectly provided those individuals in mobile home parks with rent assistance.

Ms. Parnell voiced concern most of testimony presented thus far tended to give the impression somehow S.B. 323 would help those currently living in mobile home parks, to which Mr. Joerg responded, it would help only to the extent of those manufactured homes built after January 1, 1996.

Mr. Mortenson asked if the date of January 1,1996, added by the Senate, was written into the bill because of the quality of homes constructed prior to that date. Mr. Joerg replied it was an arbitrary date, which happened to be 4 years from the date the bill would go into effect (section 9). He believed any home built in the 90’s was of sufficient quality. The way the bill had originally been drafted allowed for any HUD Coded home constructed after 1976.

In response to Mr. Mortenson’s question, Mr. Joerg said that particular date was written into the bill because homes constructed after 1996 would be more compatible with the surrounding neighborhoods.

Mr. Braun remarked only 1 of 14 cited zoning variances dealt with moving a single manufactured home onto a residential lot, and it had been denied. The other variances cited dealt only with mobile home parks.

Don Charlebaux, sales representative, Tom Terry Homes, testifying from Las Vegas, spoke on behalf of a friend who could not be in attendance. His friend currently had a 1973 mobile home which he desired to bring up to code, but had been denied.

Mike Holbert, representing Nationwide Homes, commented on financing for manufactured homes for interested individuals. Because the land on which to place a manufactured home was limited, S.B. 323 would allow for more location options.

David Fulstone II, chairman, Lyon County Board of Commissioners, and Bob Milz, representative, Lyon County Board of Commissioners, were opposed to S.B. 323. Mr. Fulstone felt the bill negated years of intensive master planning and involvement in the zoning process. Mr. Fulstone stated S.B. 323 should not be a cure-all for mobile home parks in Clark County; however, should resolve problems with zoning of mobile homes. Lyon County had performed an intensive job of zoning and had provided areas for mobile homes and mobile home parks. The county was composed of 50 percent mobile homes and 50 percent site-built homes. He said S.B. 323 would be greatly impact Lyon County with regard to taxes and tax equity. Two years ago, an ordinance had been enacted whereby all new manufactured homes coming into the county had been required to be placed on a foundation and taxed as real property. That had helped the county somewhat, but the county would not see financial help for many years.

Mr. Fulstone stated S.B. 323 would also impact most rural and scenic areas of the county by allowing the widespread placement of mobile homes. Covenants, conditions, and restrictions (CC & R’s) were not the answer and did not address the underlying problems in Lyon County because most of the parcels were already developed. He stated the most devastating fires in the rural counties occurred with manufactured homes, which incurred the longest response times; therefore, mobile homes would greatly impact the fire districts. He reiterated S.B. 323 was not a park rent issue and would not help those in mobile home parks with homes built prior to 1996. He concluded by expressing the state needed to let the county and community commissioners perform their jobs.

Mr. Milz said the Lyon County Board of Commissioners had voted on S.B. 323 and were unanimously opposed. He said local zoning issues should be left up to the local government, and stressed S.B. 323 was about open zoning issues and was an attempt to bypass the concerns of local government.

Mr. Mortenson asked why Mr. Fulstone felt it would impact the county financially. He understood S.B. 323 required every manufactured home proposed under the bill to be placed on a foundation and taxed as real property. Mr. Fulstone replied in his opinion, and historically in Lyon County, manufactured homes tended to depreciate in value whereas site-built homes appreciated in value.

Ms. Segerblom remarked Mr. Fulstone had not distinguished between manufactured homes and mobile homes, and stated there was a great deal of difference between the two types of dwellings. She asked if Lyon County restricted manufactured homes. Mr. Fulstone replied affirmatively. There were differences in the construction of the homes and the perception held by the general public.

Ms. Segerblom said the manufactured home was built to HUD Code standards, which was constructed differently than a mobile home. Mr. Fulstone responded a UBC approved home in Lyon County was allowed on any lot.

Ms. Von Tobel asked why Mr. Fulstone thought the rural areas would be greatly impacted, and she asked what was currently being built, keeping in mind manufactured homes would be placed on a foundation and plumbed in the same fashion as a site-built home. Mr. Fulstone replied variances or zone changes had been requested in the rural mountainous areas in order to allow for the placement of manufactured houses. It had been determined those manufactured homes were not aesthetically pleasing to those areas.

Ms. Von Tobel commented she represented rural Las Vegas, and remarked in Sandy Valley a manufactured home was the only home constructed because it was cost prohibitive to build a site-built home. She was surprised he represented Lyon County as being opposed to manufactured homes when many were currently being placed in Lyon County. She asked if the problem he had was if S.B. 323 was enacted, individuals would no longer be required to come to the board for a variance. Mr. Fulstone replied that was a portion of the problem, but he believed the bill as amended, placed too much discretionary power upon staff for decisionmaking related to conformance.

Chairman Bache pointed out he was troubled with the comment related to the perception issue, he mentioned he received a few letters he thought to be offensive that had related feelings of individuals who discriminated against manufactured homes in their neighborhoods. Mr. Fulstone said what was meant by the term "perception" had nothing to do with what had been hinted. The perception issue had to do with the amount perceived to be taxed for manufactured home property compared to taxes perceived to be paid for site-built homes with the same amenities.

Chairman Bache remarked upon passage of S.B. 323, those homes would be taxed as real property on the same basis as site-built homes. Mr. Fulstone said that was true; however, there was still a problem with depreciation of those manufactured homes.

Michael Dias, member, Sunrise Manor Advisory Board, testified he did not appear today on behalf of the board, but appeared on his own volition. He stated he was opposed to what S.B. 323 proposed, which appeared to be open zoning. The land-use plan had currently undergone an extensive updating, and many areas appropriately designated for manufactured homes had been developed. During the past year or two, he recalled at least three manufactured communities that had been approved, constructed, and currently occupied within Sunrise Manor. He was concerned with three issues. His first concern was that manufactured homes would only be restricted in those communities with CC & R’s, that restricted their use. Another concern related to property values and the perceived concern by the general public. Because the cost of the manufactured home was 20 to 40 percent less than a site-built home, it would be appraised for less and taxed less, which would affect property values. Thirdly, he had been concerned with the enforcement issue. Dictating and enforcing what was an acceptable form of housing in a neighborhood would be difficult.

Concluding, Mr. Dias said he supported manufactured homes, but he felt the state should not try to overrun the local zoning codes.

Harold Anderson, representing himself, related a personal experience regarding his manufactured home. He and his wife were currently retired and living on a fixed-income, and because of the increased rent they faced, he desired to move his manufactured home. After searching for a parcel of land on which to relocate, it had been determined there were no zoning laws that would accept their large home.

Continuing, Mr. Anderson said there was no question in his mind the builders and developers in Clark County had exerted undue influence on the county commission to restrict the placement of manufactured homes. He questioned the cost of land in cities as compared to rural counties, and said the problems could be corrected with adequate zoning laws; therefore, he supported S.B. 323. Open zoning addressed in the bill would allow individuals to purchase available land on which to move.

Chairman Bache wanted it known for the record the following people supported S.B. 323, but had passed on presenting testimony: Terry Miller, representing Silvercrest Western Homes; Phil and Geri Lancaster, representing River Homes; Don Phillips, representing Country Homes; Ed Cutter, Jason Martinez, Laura Reilly, Rae Ferguson, Alex Amezcua, and Sheryl Shay, representing Oakwood Homes.

Brad Spires, president, Carson-Douglas-Fallon-Lyon-Tahoe Board of Realtors, introduced Deborah Uhart, past president, Carson-Douglas-Fallon-Lyon-Tahoe Board of Realtors. He stated Ms. Uhart had just completed a 4-year appointed term as a planning commissioner for Carson City. Mr. Spires then deferred time to Mrs. Uhart who read from prepared text (Exhibit F).

Mrs. Uhart said the board was committed to the availability of affordable housing and the members derived satisfaction in helping first-time homebuyers. It was clear that manufactured housing provided a means of affordable housing, but stick-built (site-built) homes could provide a similar means. Site-built homes were a crucial piece of the state’s economy in that they provided jobs on which many residents relied to support families.

Mrs. Uhart said the board was not in support of the bill as it had been written. The board felt strongly they had a different set of circumstances in their representative counties than much of the rest of the state. Therefore, the board chose to take a position on S.B. 323 separate from that of the state association. The board did not see CC & R’s as an effective method of protecting property values in older neighborhoods. As a planning commissioner, she had been present when Carson City completed a comprehensive master plan that allowed for what was felt to be an adequate amount of both mobile home zoning and single-family zoning.

Mrs. Uhart was pleased Senator Amodei added the amendment regarding restrictions; however, she was unsure as to how those amendments would be adhered and supervised by local staff.

Continuing, Mrs. Uhart alluded to the fact many property owners had resided in their homes for many years and were counting on the appreciation of the home as a retirement nest egg. There was always a possibility that placement of a manufactured home in an existing neighborhood might jeopardize that investment. A recent Nevada Supreme Court decision upheld the right of a local government agency to impose zoning regulations as a means of protecting property values based on the testimony of a professional appraiser where mixing manufactured housing with conventional housing would depreciate property values. While it had been felt the newer manufactured homes would increase surrounding values in some neighborhoods, those that would be negatively impacted under the same circumstances could not be ignored.

The board felt section 2 of S.B. 323 genuinely attempted to mitigate some of those concerns through the addition of restrictive architectural requirements. In an attempt to address concerns regarding property values, the bill had made that form of "affordable" housing unaffordable, thereby defeating the purpose of the bill. Mrs. Uhart said section 3 seemed to be in direct conflict with the section 2 of the bill, which held affordable housing as the chief consideration in developing standards by local government entities. It might be difficult to require a home to be comparable to homes in the vicinity and not hamper construction of affordable housing.

Rewriting ordinances, performing plan checks, and reviewing architectural specifications based on surrounding homes in the neighborhood would impose a fiscal impact on the local governing body, as well as deprive homeowners of the opportunity to be informed of any zoning changes by mail. Mrs. Uhart recommended the committee consider the following amendments (page 8, Exhibit F):

• Section 3 – it had been suggested a provision be added that provided an exemption for a community or county that met or exceeded the national average of affordable housing.

• Amend section 3, subsection 2, with the addition of a section (h) in order to provide an exemption for existing subdivision where the majority of the land had improved.

• Amend section 3, subsection 2, part (g), to read "be manufactured within 2 years of placement."

Mrs. Uhart concluded by stating the board was not opposed to manufactured housing, and thanked the committee for their time. No further discussion ensued.

With regard to the final proposed amendment by the board, Ms. Gibbons asked if a homeowner had just remodeled their manufactured home would that home be excluded from placement on a lot in the future. Mrs. Uhart replied if the home’s interior had been remodeled the point would be moot; however, if the home had been remodeled in terms of being brought up to code, it might be a consideration. Concern was with the exterior of the home and the quality of the improvements. It had been understood 1996 was not an arbitrary date, but had been proposed by Senator Raggio during discussions in the Senate.

Chairman Bache requested the following individuals, also in favor of S.B. 323, be known for the record they passed on presenting testimony: Steve Howard and Phil Renshaw, representing Family Homes for Nevada; William Soche, representing Schmitt Properties; Douglas Spivak, Rafael Barbosa, and William Moonz, representing Homes America; Tom Lammel, representing Lahontan Homes; Gene Empey, representing Empey and Company; Dorothy Johnson, representing Anchor Mobile Homes; D.J. Korson, representing Washoe Homes; Carl Newberry and Dianna Stone, representing Sagebrush Realty; Chuck Swegles, representing GreenTree Financial; Frank Bouchard, Richard McEntis, and Teddie Thompson, representing Washoe Homes; Bob Cooper and Tawny Clark, representing Country Homes.

Renee Diamond, administrator, State Division of Manufactured Housing, said the State Division of Manufactured Housing, under contract with HUD, received funds for the resolution of consumer complaints with regard to the purchase of new manufactured homes. If an individual was to purchase a manufactured home - and if there was to be some inherent failure of a system in that home - and the seller of the home failed to make repairs, a claim could be filed with the division. The division would, in turn, utilize enforcement powers in order to make the seller complete needed repairs. Ms. Diamond said there were not many other types of housing that were backed by a state agency with regard to complaint resolution and interaction with the seller.

Leo Poggione, co-owner, Craftsman Homes, remarked on the beauty of the manufactured homes on his lot. He did not believe the appearance of manufactured homes to be an issue; they could be adapted into the neighborhood in which they were placed. The intent of S.B. 323 was to provide a choice to those who desired a manufactured home and a location on which to place it.

Ms. Von Tobel likened the situation to a contractor building a house, and next to it, an owner/builder erecting a similar type of home. The owner/builder would save 20 to 40 percent performing their own work, yet when the two houses had been completed they each contained the same amenities. The owner/builder house would be appraised no lower than the contractor-built house.

Chairman Bache requested the following individuals who were opposed to S.B. 323 be known for the record: Ron Kipp; representing Builders Association of Western Nevada (BAWN) and Landmark Homes; and, Bill Oney, representing Associated Builders and Contractors.

Bob Nunes, director, Community Development, Douglas County, stated there were two issues he wanted to currently address. The first issue dealt with CC & R’s. As a county, they did not have the power to enforce CC & R’s because they were private contracts. To be required to enforce those CC & R’s would have a great fiscal impact on the county due to the requirement of additional resources. He suggested adding language that specifically put the burden of responsibility and accountability on the applicant to show their manufactured home did not violate any CC & R’s in a particular area. The second concern he had dealt with the design criteria. The current language of S.B. 323 was extremely vague, in his opinion. To develop local standards for architectural review for manufactured housing would be discriminatory, unless those same standards applied to all single-family dwellings.

William Anthony, representing Trinity Homes, regaled the committee with a personal story, and added there were currently problems with the manufactured housing industry including placement location and financing difficulties. Some of the previous problems experienced by those in the manufactured housing industry had since been rectified; however, placement still remained an obstacle. In the past, manufactured, mobile, and modular homes had been placed in locations far from site-built residential areas. Because property values were based mainly on location, those homes depreciated.

Continuing, Mr. Anthony expressed his dismay for those opposed to the bill stating the facts did not agree with what had been previously presented. Washoe County currently maintained two ordinances that were directly against state law and the county would not change the ordinances. He was unsure of how much more the manufactured housing industry could do to rectify the situation.

Mr. Anthony explained infrastructures of towns and rural areas needed affordable housing and its occupants. Individuals moving into Nevada could be provided with better homes for less money in nicer neighborhoods if zoning was not an issue. He posed a rhetorical question of the number of vacant lots returned to counties and cities because people could not afford to build on them. Mr. Anthony vehemently supported S.B. 323.

In response to Mr. Mortenson question regarding the illegality of the ordinances, Mr. Nunes said in order to take recourse, one would have to pursue action against a state entity in the form of a lawsuit. In 1993, the legislature was in the process of passing, or had passed, a law stating Washoe County could not enact what was intended in the ordinance.

Dean Diederich, planning manager, Washoe County Community Development, stated Washoe County had not taken a position on the bill, and had not provided testimony during hearings in the Senate; however, the county was interested especially in those amendments coming out of the Senate. He testified prior speakers provided some essential points and reiterated some of those points.

Mr. Diederich said if S.B. 192 was passed in the 1999 Legislative Session, then portions of S.B. 323 would be futile. It was important to ensure issues had been rectified in those two pieces of legislation. The amendment to require the building officials to reject the placement of an HUD home placed the state in the line of any lawsuit between private parties for any aspect of the CC & R’s. He stated there was no way to be sure CC & R’s were still in effect in some communities. Counties and cities did not have copies of those readily available.

Mr. Diederich said it was important to recognize the difference between homeowners’ associations and CC & R’s. It was possible to have both in newer and older neighborhoods. Typically, when one wanted to enforce architectural provisions within CC & R’s, a private homeowners association was required. Washoe County did coordinate with homeowners’ associations if they signed off the architectural plans before applying for a building permit. If a homeowners association was defunct, then CC & R’s went unenforced by the county.

Mr. Diederich pointed out several provisions in CC & R’s, before those of the advent of fair housing laws, were illegal and/or unethical. Because federal interpretation was subject to change, individuals needed to recognize that if, through S.B. 323, it had been intended to have CC & R’s protect the placement or limitation of manufactured housing in established residential developments, the intent would quickly be overlooked. The legislators needed to decide whether or not they wanted the HUD sealed homes to be permissible anywhere within appropriate statewide standards, and state it as such.

Continuing, Mr. Diederich clarified the Nevada Revised Statutes (NRS) 278.02.09, passed by the legislature in 1995, required local codes to allow UBC modular factory-built housing in any residentially zoned parcel. He was unaware of any section in NRS 278, NRS 471, or NRS 489, which currently required the HUD sealed home be treated as a site-built, or UBC modular home; currently the purpose of S.B. 323.

Mr. Diederich voiced concern with section 3, subsection 2, part (d), which was in direct conflict with subsection 3. He reiterated if the intent was to allow manufactured homes to be placed anywhere within Nevada, it should be stated. There was currently a requirement in NRS 278.160 for a housing element, and the purpose of that element was to promote affordability. With regard to the master plan, he said affordability was the primary consideration which subsection 3 continued to promote, and it would be difficult to take advantage of those provisions in subsection 2.

Continuing, Mr. Diederich stated another concern dealt with the issue of placing a manufactured home on a permanent foundation and taxing it as real property. He understood Senator Amodei’s belief the provision in section 2 provided a protection; however, he did not concur. He suggested if manufactured homes were going to be comparable to site-built homes, they should be taxed as such, and verbiage should be made clear as to that intent. Referring to section 6, subsection 5, he suggested the word "if" be changed to "shall."

An additional concern lay with the structural versus aesthetic issue pertaining to roofs. There had been a great deal of testimony during Senate hearings concerning the roof pitches being able to adequately handle snow loads. Many projects had been constructed in the Incline area, and it had been determined a flat roof could hold the required snow load. Mr. Diederich stated if it was an aesthetic issue, the legislature should set standards statewide. If there was a concern relating to a structural issue, those would need to be addressed in the factory.

Mr. Diederich clarified Washoe County did not "thumb its nose" at state law as previously indicated. There were requirements for permanent foundations for homes as indicated in Article 316 of the county’s development codes. In order to get the aesthetic appearance of a manufactured home that had been rolled out onto the site comparable, Washoe County had a standard that required either a pit set or a maximum height on the exterior foundation with solid perimeter foundation. He stated a letter of opinion had been received by the Office of the Attorney General which indicated if there was concern related to foundation structures, one should remember the foundation on an HUD sealed home was regulated by the state Manufactured Housing Division. He highlighted the difficulty of trying to match aesthetic local conditions with the products currently coming into the market.

On a final note, Mr. Diederich remarked a gentleman wanted to open a daycare center in an HUD sealed home. In order to meet the requirements and codes, such as the American with Disabilities Act (ADA) requirement, a number of structural changes were required to be made to the home. The Washoe County building department could not approve changes to HUD sealed homes as they utilized standards from the Uniform Building Code (UBC). The individual was sent to the state Manufactured Housing Division in order to get an authorization for change, and returned to the county stating he could not get the division to agree to allow a structural change to the HUD built home. Because there were no connections allowed, unless otherwise specified by the manufacturer for compliance with HUD criteria, the county could not issue a UBC building permit for housing add-ons.

In response to Mr. Neighbor’s question, Mr. Diederich reiterated Washoe County did not present any testimony during the Senate hearing on the bill; however, he was in attendance for the hearing. The county had been concerned with a number of the original provisions, but Senator Amodei indicated to them he would be making a number of changes.

Mr. Mortenson requested the reasoning behind why the state could not authorize modifications on an HUD built home for the gentleman who wished to open a daycare. Mr. Diederich said the county could not issue a UBC building permit for modifications because that particular manufactured home had not been constructed to HUD standards in the first place. After advising the gentleman approach the state Manufactured Housing Division, it had been determined the division did not have an established permitting process to address that gentleman’s need.

Mr. Mortenson commented the issue was a deficiency in the state’s inspection and permitting of HUD homes, which needed to be addressed rather than criticizing the manufactured home itself, to which Mr. Diederich said that was correct.

Mr. Mortenson asked if assuming the individual was able to obtain the necessary forms from the state in order to modify his home, would the county then have objected. Mr. Diederich replied no. Because the home was still a residence, a special-use permit had been granted as one of the conditions of approval to open the daycare center. The individual was required to comply with ADA and obtain the appropriate permits to modify the structure. He said the gentleman had been literally stopped in trying to comply with the condition of approval.

Mr. Thomas remarked Mr. Diederich had referred to NRS 278.02.09, which was the definition of factory-built housing. It appeared to him S.B. 323 and a particular section of NRS 278.02.09 paralleled each other, with the exception of UBC requirement in statute. Mr. Diederich said what he had tried to point out was NRS 278.02.09 required all entities to allow modular UBC housing anywhere. It did not currently address the manufactured home. He suggested as an alternative to the language being proposed, the state could conceivably amend 278.02.09 to include both modular and manufactured homes, i.e., HUD sealed and UBC.

Mr. Thomas asked if S.B. 323 might not be necessary because manufactured homes, so long as they met UBC requirements, could come in under existing state law. Mr. Diederich replied no. If the state desired to allow an HUD sealed home in any location within the state and be treated like a site-built home, state law needed to be changed.

After recessing the meeting at 11:16 a.m. for the Assembly floor session, Chairman Bache reconvened at 12:58 p.m. in order to continue taking testimony.

Ron Lynn, representing Clark County Building Department, commented Clark County did not want the building departments involved in CC & R’s. Furthermore, he said there were other provisions of S.B. 323 that would be somewhat difficult for the building departments to administer such as those indicated in section 3, subsection 2, part (d).

With regard to foundation placement, Mr. Lynn stated there was truly not that kind of concept within the context of the Uniform Building Code for HUD manufactured homes; however, there were federal, state, and manufacturer’s standards with which those homes were required to comply. Furthermore, if those manufactured homes were placed in flood zones, there were Federal Emergency Management Agency (FEMA) standards with which to be complied.

Referring to section 3, subsection 5, a "manufactured home" had the meaning ascribed to it in NRS 489.113. Mr. Lynn said that section was the finding section for a manufactured home, which allowed for an 8 x 40-foot, or 320 square foot, unit. He felt it might be more appropriate to ascribe the definition of a manufactured home as more specific to the statute.

Lesa Coder, assistant director and zoning administrator, Nevada Planning Association, Clark County, read from prepared text (Exhibit G). She understood the bill would prohibit a local governing body from restricting manufactured homes from zoning districts, which allowed single-family residences. Although the bill had commendable goals such as offering affordable housing to families, it was unlikely S.B. 323 would achieve its intended goal for Clark County.

Ms. Coder urged the committee to consider the following points. Not only would the bill have a negative impact on residents, but would change every zoning parcel in the state zoned for a single-family residence. No prior notice to property owners would be required, thereby negating their opportunity to comment on the effect any zoning change might have on their properties. Zoning laws were designed to protect the character of areas and conserve building values. She believed S.B. 323 would undermine those goals.

Although standards for architectural compatibility had been required within S.B. 323, federal law might limit the ability of state and local governments to impose construction standards beyond what the federal building standard required.

Ms. Coder called the committee’s attention to letter dated April 20, 1999, received by Mr. Charles Pulsipher, senior management analyst, Current Planning Clark County, from Kenneth LoBene of the United States Housing and Urban Development (HUD), page 5 of Exhibit G. With regard to Mr. Pulsipher’s question relating to the Fair Housing Act (FHA) requiring manufactured or modular housing to be permitted in all districts that allowed single-family residences, it had been understood by HUD the decision to allow manufactured or modular housing in a particular neighborhood was a local issue.

A 1997 court case, Dura Built Homes, et al. v. Clark County, had been mentioned during Senate hearings (Exhibit H). Ms. Coder said the Nevada Supreme Court had rendered a decision on January 20, 1997. It had been well-settled that zoning regulations were a proper function of a municipality’s police power. Cited was the case of Village of Euclid v. Amber Realty Company (1926) wherein Nevada had been expressly granted that power in NRS 278.250.1 and other sections of NRS 278. The court concluded Clark County’s restriction of manufactured housing to areas zoned R-V, R-A, R-T, T-C, and RMRD was a valid and rational exercise of its police powers.

With regard to CC & R’s, Ms. Coder said Clark County did not take a position on CC & R’s, and the county could not legally enforce them. The courts would decide whether or not CC & R’s or zoning regulations would be upheld. Typically, the courts upheld whichever of the two was most restrictive. Clark County preferred to work through zoning to address land-use issues, and base housing issues on the particular type of zoning district and density constraints, not on the particular type.

Ms. Coder said since September of 1993, Clark County received 19 applications to reclassify property to a district that allowed manufactured homes. Of those, 18 had been approved. The approved applications represented 369 acres and 2,198 planned lots. Of those approved applications, 845 of 2,198 lots had been developed or recorded, which seems to indicate the demand for manufactured homes was not as great as the potential supply.

On a final note, Ms. Coder said if the committee chose to approve the bill, she suggested an amendment be made in order to mitigate any potential adverse impacts, page 3 of Exhibit G. She remarked if the committee was to review that portion of NRS 478.113 whereby the definition of a manufactured home had been ascribed, they would discover the specifics directly conflicted with the square footage requirements of S.B. 323.

Mr. Lee remarked he had received a call from the gentleman to whom prior testimony had indicated regarding his 1973 mobile home he desired to upgrade, but had been informed by the county he could not. Mr. Lee asked what was the intent of the county in that particular situation. Addressing the question in terms of zoning, Ms. Coder replied anytime a property owner could not meet the confines of the district, he could seek relief through a variance application. Several of those applications had been approved for manufactured homes throughout the Las Vegas Valley. She suggested the gentleman submit a variance application as a possible alternative for a pre-existing condition. With regard to the upgrade of the home, Ms. Coder deferred the question to Mr. Lynn. Mr. Lynn said any modifications to the home were to be in accordance with the current codes. Any modifications inconsistent or unable to be completed could be appealed to the building official under UBC section 104.2.7.

Continuing, Mr. Lynn said if an individual was to replace the manufactured home with a newer model, there were new requirements and codes with which to comply. On the other hand, he said in previous cases the county commission had been very favorable if like-to-like exchanges were made.

Robin Williamson, elected official, Carson City Board of Supervisors, and chairman, Carson City Downtown Redevelopment, presented amendments to the committee, which had been developed by the Carson City staff (Exhibit I). She said S.B. 323 was an honest attempt at increasing diversity within the state; however, the bill still needed work. Many of the proposed amendments echoed those concerns expressed by the Mrs. Uhart.

Ms. Williamson hoped provisions protecting historical districts in town from placement of manufactured housing would be added. The board had been concerned with how S.B. 323 would be implemented, and she requested any policy issues or differences in the bill be reviewed in order for the easy enforcement of S.B. 323.

Gayle Farley, executive officer, Builders Association of Western Nevada, testified on behalf of the association in opposition to S.B. 323. Because her husband was a builder, she was also personally opposed to the bill. There was a great risk to building homes, not only monetarily, but because reputation was based on a builder’s performance. To allow a manufactured home on a lot next to a site-built home could negatively impact the property value of a custom-built home. She reiterated sentiments expressed on CC & R’s, and added if CC & R’s were required to be enforced at the local level, the building departments would need more employees.

Ms. Farley said passing S.B. 323 would clearly speak against the economical diversification for which the state strived because manufactured homes were not developed in Nevada. Also, if S.B. 323 was enacted, it would have an adverse affect on homebuilders, suppliers, electricians, and many other professional trades in the area. She indicated a letter she had received (Exhibit J) whereby the same concerns regarding the adverse affects on professional trades had been expressed. No further discussion ensued.

Jim Snellings, vice president, Manufactured Housing Association, Lyon County, said the issue of manufactured housing being accepted within the county was not as it had previously been stated and added S.B. 323 would affect builders to some degree, but the effect would not be greatly adverse. Builders were dealing with the same type of housing, one being more affordable than the other was.

Michael Lynch, representing Builders Association of Northern Nevada, commented the mechanism for manufactured home placement currently existed. If the home was built to minimum UBC standards it could be placed in any location desired. No further discussion ensued.

Chairman Bache commented he found some of the testimony heard personally offensive. He likened the situation to discriminatory tactics utilized during his youth whereby land-use and zoning issues were used to keep minorities out of particular neighborhoods. The current debate had not been over policy, but over politics and finances.

There being no further business, the meeting was adjourned at 1:26 p.m.

RESPECTFULLY SUBMITTED:

Rachel Baker,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: