Anticipation building

Predictions that tens of thousands of new jobs and even more in population growth in the next five years will create a strain on housing have the attention of those in the construction trade.

Contractors are cautiously optimistic. They’re ready to get back to work in a big way even though memories of the Great Recession are still fresh.

“While everyone is looking to the future with optimism, we’re also looking back to the not too distant past,” said Don Tatro, director of public affairs and membership at Builders Association of Northern Nevada (BANN).

“We’re sticking our toes in the water,” said Jesse Haw, president of Hawco Properties and a third-generation builder.

Hawco broke ground a few weeks ago on 16 lots in Spanish Springs.

“It’s our first new subdivision since 2002,” Haw said.

The first phase of Eagle Canyon Ranch may be small but future build-out of the subdivision could include 449 houses.

Other construction companies are diving into the new boom with large complexes.

Silverwing Development Corp. focuses on apartments and condominiums. Its Bungalows — 338 home/apartment hybrids in North Valleys — will be completed in about 60 days, said J. Carter Witt, president of Silverwing.

Virginia Lakes Edgewater has 336 units. Sales for the 48 condominiums began a few months ago and leasing for the 288 condo-style apartments began earlier this month.

With those projects winding down, Witt is gearing up to build 236 apartments at Victorian Square in Sparks on land now occupied by parking for the Sparks Century Theatre.

“We’re looking to expand,” Witt said. “It could be as high as 485 apartments” if negotiations with a couple other property owners pan out.

Silverwing is also moving forward with an addition to Sky Vista Commons in North Valleys. The last phase of 80 units will bring the complex to 282 units.

The focus may be on Sparks, as the first city west of the Tahoe Reno Industrial Center, but south of Reno, Damonte Ranch is also booming with development.

Rapid development in South Meadows and Damonte in the early part of the century screeched to a halt when the construction bubble burst. Now, with the promise of the Southeast Connector joining east Sparks to south Reno in a few years — improving access between TRIC and Damonte Ranch, a new surge of development is focused on the south end of the connector.

Di Loreto Homes of Nevada is in the last phases of its La Casata development with 147 homes ready to start move-ins in several months and active construction on 58 additional home sites. All the homes have buyers.

“We don’t build anything that’s not presold,” said Teresa N. Di Loreto.

The family-owned company has a couple other concepts for new developments in Damonte Ranch.

Projects underway by Hawco, Silverwing and Di Loreto are just a sampling of the widespread housing construction already underway in the Truckee Meadows.

If everything under development and planned is added up, is it enough?

The Economic Development Authority of Western Nevada’s EPIC study predicts a population growth of 64,700 in the counties around TRIC in next five years, due in part to the influx of employer heavyweights like Tesla, Switch, and others expected to add 52,400 jobs to the area.

“We have a housing crisis,” Mike Kazmierski, president and CEO of EDAWN tells any government or economic gathering he speaks to. “We should be building not 200 homes but more like 2,000 homes.”

Builders are listening, but feel handicapped.

“I do believe we’ll experience a tremendous amount of growth,” said Di Loreto, who also serves on the EDAWN board of directors. “It’s a huge concern. Builders cannot keep up. Our inventory goes as fast as we put it on the market.”

The message isn’t only coming from EDAWN said Haw, of Hawco Properties, which also does industrial development. There’s a strong increase in activity in that sector as well, he said.

Construction takes time.

“It’s a six- to nine-month process just to get to the spot when we can turn dirt over,” he said.

Contractors face a number of “headwinds” that can slow the process even further, Haw said, including financing, labor availability and lot availability.

“Financing is a challenge,” Haw said. “Private builders are having a hard time getting financing from traditional sources like banks” in the aftermath of the recession.

Silverwing’s Witt has been in construction for 21 years. He’s been through a number of construction downturns and said they “widen your perspective.”

During the credit crunch in the early ‘90s, five banks went out of business in the middle of projects. It took a lot of personal sacrifice, but he made it through to the other side and through all the other economic crises with a clean credit record.

As a result of that and the bank contacts Witt’s made through the years, Silverwing has the financial backing to move forward on large housing projects.

“It’s not going to come locally,” he said, because Nevada banks don’t have the resources to fund large projects.

Another battle contractors face is finding skilled construction workers. During the recession many relocated or switched careers.

It will take time to rebuild the pool of skilled construction workers, Haw said.

Larger companies have less of a battle, Witt said.

The bigger the project, the easier it is to attract subcontractors. Witt said subcontractors like to know they have the stability of multi-year projects.

Perhaps the biggest handicap in meeting the coming housing crunch, contractors say, relates to issues at the government level, which also lost staff during the recession. Staffing is improving, but not up to the level needed for the volume of construction needed to meet EDAWN’s predictions.

When building applications, reports, or inspections are delayed because there are not enough planners, “the entire queue gets held up,” Witt said.

City and county planners are also needed to beef up road and utility access in order to increase the number of lots that are ready for construction.

“We stopped producing lots when the economy went to heck,” Haw said.

Despite the recent memories of the Great Recession, one thing contractors don’t seem to be worried about is the current boom leading to another bust — at least locally.

“Last downturn, we were too dependent on construction,” Witt said.

Incoming jobs are heavy in technology, industry, shipping, and more, much more.

“The jobs coming in are more diversified, more sustainable,” said BANN’s Tatro.

Expect to see the pace of housing construction increase in the region as the issues begin to find resolution.

This year seems to be a time for the housing construction industry to gear up.

“If even half the jobs come, it’s going to be a game-changer for everyone,” Haw said. “If all the jobs are created, it will be overwhelming.

“People aren’t coming in saying ‘I work for Tesla’ yet. Probably a year from now will be the litmus test of how real it is.”

He added that builders will react to the demand.

“We don’t create the demand, we rise to it,” he said. “We’re optimistic, but let’s make sure it’s real.”