Amid white-hot Northern NV housing economy, Verdi development growth sparks concern | TheUnion.com

Amid white-hot Northern NV housing economy, Verdi development growth sparks concern

Rob Sabo
Northern Nevada Business Weekly

VERDI, Nev. — Bud Mosconi's roots run deep in Verdi — the 73-year-old has lived there his entire life, and his grandfather first came to the small hamlet just west of Reno back in 1903.

The quiet life is all Mosconi and his many relatives who also live in Verdi have ever known, despite nearby development of an interstate freeway (I-80), a hotel-casino (Boomtown) and large outdoor retailer (Cabela's) over the years.

The most recent spate of development in Verdi, however, has Mosconi and other longtime residents concerned about the future of their tranquil community.

Two large housing projects will bring hundreds of new homes to Verdi over the next few years. Reno Land Development Company, the developer transforming Rancharrah and the vacant lot that once housed Park Lane Mall, will erect 273 single-family homes at its Meridian 120 north project near Boomtown-Garson Road. And national homebuilder D.R. Horton will build 324 homes at West Meadows Estates off Highway 40.

“As housing prices get more expensive, there is economic pressure to try to find land that is less expensive to offset those costs.”Bill ThomasAssistant city manager, city of Reno

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That's nearly 600 new homes, and Reno Land Development also plans to add another 78 lots at Meridian 120 south on the other side of Interstate 80. That project initially was denied by the Reno City Planning Commission, but it's on appeal and goes before the city council in February.

Less-expensive land on which to build

Industrial developers are keen on Verdi as well. Dermody Properties' LogistiCenter at I-80 will add more than 800,000 square feet of new Class A industrial space on formerly vacant land just north of Cabela's. Two buildings totaling more than 405,000 square feet already have been completed.

With a white-hot regional housing economy, it was only a matter of time before development crept to Verdi — and veteran Northern Nevada homebuilders have long had Verdi in their sights.

Rob Fitzgerald, manager of Northern Nevada Homes and master planner for West Meadows Estates, purchased the nearly 200-acre tract of land for West Meadows Estates back in 2010. However, Fitzgerald sold the project to D.R. Horton in 2016 — he says that after adding a slew of amenities such as public trails, parking lots, parks and a water main, the project simply became too large of an up-front investment for a regional homebuilder.

"It was a heavy lift," Fitzgerald said. "With all the amenities, it turned into a pretty expensive endeavor. It took someone with their kind of strength (D.R. Horton) to make it happen."

D.R. Horton is the nation's largest homebuilder with more than $12.1 billion in housing revenue in 2016 and $14 billion in 2017.

Bill Thomas, assistant city manager for the city of Reno, says that Verdi has pretty much sat in isolation through the last homebuilding cycles. But with land for development within the city core basically non-existent, new development will continue to push outward from the city to places where land is generally at a lower price per acre.

"The farther you get out from the core of the city, the less expensive land is," Thomas said. "And as housing prices get more expensive, there is economic pressure to try to find land that is less expensive to offset those costs."

As a rule for the Truckee Meadows, land to the south and west is more expensive than land to the north and east — that's why the North Valleys and Spanish Springs areas have exploded in growth.

'With higher prices, people want more land'

Land in picturesque Verdi, however, with its iconic mountain and river beauty, is more expensive than other areas, but it's still less expensive than land close to the urban core, Thomas noted.

That means homes there likely will not fit into the budgets of many younger and first-time buyers.

"One of the challenges when you go into Verdi is that land costs are generally more expensive, so the home product will be more expensive," Thomas said. "With higher prices, people want more land. It's a natural pressure as you move further away from the city core and into more expensive areas — builders put more land with homes. There are generally smaller lots in the southeast part of city, and larger in the west. But it's getting harder and harder to be able to provide more land."

Regardless of price, perhaps the main reason why there soon will be sticks flying in the air in Verdi is because of the run-up in home prices due to incredible demand for new homes in northern Nevada. There's less than two months of standing inventory available in the Reno-Sparks market, the Reno-Sparks Association of Realtors reports. A healthy market has at least six months standing inventory for sale.

Another consideration: The land being developed at Verdi was privately held, Thomas notes. Market conditions are a prime driver of privately held land being transferred into the hands of developers. All land previously slated for new construction prior to the recession has pretty much been developed, leaving raw ground such as the parcels in Verdi as the only avenue for new home communities in the region.

"Historically, there's not been a strong focus on the Verdi area," Thomas says. "Developers are now in the next phase of growth of the community, which is places like the Verdi area that were zoned and planned; that is where pressure will be for new construction.

"Land that gets developed is driven primary by land owners," Thomas adds. "We don't control when someone wants to sell their property — the market determines that."

Concerns run deep among Verdi residents

Although there has been a great deal of pushback by Verdi residents on all the development plans, Thomas says home density there still isn't comparable to other outlying communities such as South Meadows, Damonte Ranch, Spanish Springs or North Valleys.

Regardless, the addition of 600 new homes doesn't sit well with Mosconi and other longtime Verdi residents, who are concerned primarily with overcrowding at Verdi Elementary School and on Verdi's narrow two-lane roadways, as well as a lack of available water and fire protection.

Mosconi has lived in the same house for 48 years. Back when he moved in, he says every lot had one acre per house. There's simply not enough water to support all those new homes, he says. The well at his home goes down 110 feet — much deeper than the water table and twice as deep as many nearby wells.

Up until last year's record winter, Mosconi's well often ran dry in the summer, and four wells around him did go dry.

"Water out here is a real problem," he says. "If I used too much water it would dry up and I would have to wait for it to recover."

"This valley can only handle so many people; we don't have the resources," he adds. "We don't have the fire protection, schools, roads and the infrastructure to support all these homes. Everyone wants to live out in the country, but our biggest thing is water and how this is going to affect us.

"I've seen a lot of changes, and that's fine, but let's do it with a little more planning."

Rob Sabo is a Reno-based freelance writer. He can be reached for comment and ideas at saborob70@gmail.com.

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