N. Las Vegas, HUD facilitate home purchase in sinking neighborhood
(Nevada Current) The City of North Las Vegas has been using federal money for years to entice homeowners in Windsor Park to leave their sinking homes. Now, it’s using federal money to attract new buyers.
More than half of the homes in Windsor Park, a predominantly Black neighborhood built in the 1960s on a depleting aquifer, have been demolished in the almost 40 years since the land beneath them began sinking.
North Las Vegas received $14.5 million from the U.S. Department of Housing and Urban Development in 1994 to relocate homeowners for $50,000 each, but about 90 remain.
The city has done little to make the remaining residents feel welcome. Street lights are in disrepair. Stop signs are faded. Weeds grow through the cracked sidewalks. So it came as a shock to Sen. Dina Neal, a Democrat who represents North Las Vegas, when she learned one recent Windsor Park homebuyer got a helping hand from the city to close the deal.
“I got $15,000 in down payment assistance through North Las Vegas,” says LaQuanna Sonnier, who purchased her home less than two years ago for $230,000.
The city prohibits Windsor Park homeowners from remodeling or adding on to their properties, but has taken no action that would notify potential buyers or lenders of the subsidence.
“It’s incumbent on a residential property seller and/or seller’s agent to disclose known conditions to a buyer,” said spokeswoman Kathleen Richards. “The City has not recorded anything on the properties.”
Absent any notice on their titles, Windsor Park residents are as eligible for assistance as anyone else.
“There are no restrictions laid out in the HOME program” – a federal program providing housing-related grants to local governments – “or from the Department of Housing and Urban Development to prohibit assistance in Windsor Park, and limiting or restricting the use of HOME funds in Windsor Park would violate federal Equal Opportunity laws,” Richards said in a statement. “The City cannot discriminate by denying a home purchase in a particular neighborhood if all of the federal requirements for the purchase of the home are met, as they were in this case.”
A spokesman for HUD did not respond before publication.
Senate Bill 450, sponsored by Neal, was opposed by the city, but passed by the Legislature last week. It seeks $20 million from NLV and $10 million from the state to make the remaining homeowners in Windsor Park whole by relocating them to new properties. The bill is awaiting Gov. Joe Lombardo’s signature.
“I think the government has a lot of exposure prior to this legislation and some of the language in the legislation reads to me like the government thinks they’re doing these people a favor, but I think that’s a misnomer,” says Autumn Waters, a Las Vegas attorney who specializes in eminent domain. “There’s exposure here that the government needs to fix.”
Neal’s bill declares “it is illegal to sell any home in Windsor Park, or for a listing agent, or realtor to list these properties for sale, effective upon passage and approval.”
“That’s a taking,” says Waters, referring to the seizure of private land by a government, even with compensation in the form of a replacement home. “This has been going on so long. I can see a pretty reasonable argument for interest that runs for a long period of time.”
Waters says North Las Vegas, by failing to condemn the homes decades ago when they began to sink, has compounded its liability. “The owners could claim not-insignificant damages.”
If the bill is signed, Waters says the government should be given “a reasonable amount of time to move forward with filing an eminent domain action and appropriately handling this. Otherwise, they could be subject to both inverse claims and pre-foundation damages.”
She says a provision of the bill that prohibits the Windsor Park homeowners from selling their replacement homes for five years “is a restriction on fee ownership the government doesn’t have. They need to be moving forward expeditiously to get these people justly compensated.”
Neal says the public policy goal of the restriction on selling the replacement homes is to “limit selling it after we build the house.” She says restitution for original residents will pay for taxes and home insurance. “I want to make sure the families are stable. I have realtors contacting me now trying to flip existing Windsor properties, thinking they will cash in on an existing home through the government.”
Sonnier, a single mother who purchased her house at the height of the 2021 buying frenzy, says at no stage of the process was she informed the neighborhood is sinking.
“I was not made aware of any soil issues,” she says. Documents indicate she waived a soil and structural inspection, but Sonnier counters she was never given the opportunity to waive inspections.
Her broker, Greg Deville, says he’s sold real estate for 22 years in Southern Nevada, but was unaware of the sinking neighborhood until he saw recent news reports. “I just heard something recently. I never sold over there. I would think North Las Vegas would have an obligation to tag that.”
Deville says even if an agent has reservations about a property, it’s not their place to comment.
“Our job is to unlock the door,” he said. “I learned in real estate school that my opinion doesn’t matter.”
The seller’s agent, Dolly Hulet, said during a phone interview she was unaware the neighborhood was sinking and her client never disclosed it.
“It was an investment property,” she said. “He never lived there, so he wouldn’t know.”
Vance Randall, who appraised the property, said he knew nothing of the sinking homes. “Unless someone brought that to my attention or if it was easily found through public records, I would have no idea because that’s not something that would typically just show up.”
His appraisal notes no adverse conditions.
“The property appears to be in average condition for the neighborhood,” he wrote.