Will anything stop Dayton's booming growth? Some say taxes

Cash in fist, eyes set to the pollution-free Nevada sky and valleys of open space, former left-coasters are grabbing up acres and multi-level homes that natives scrimp and save for years just to afford the mortgage.

Lyon County, which boasts both the growing communities of Fernley and Dayton, is the seventh-fastest growing county in the country, according to the U.S. Census Bureau. Could anything stop the housing boom?

One building expert said he believes a new tax adopted in Lyon County will make it too expensive to build in Dayton. Rick DeMar, Builders Association of Western Nevada executive director, said builders are businessmen and if it costs too much to build in Lyon County, they'll move elsewhere, taking with them jobs and the product that is so in demand by California retirees and Nevada families.

Lyon County Commissioners approved on Thursday a $1,600 construction tax on each new home built in the county to raise money for school improvements and new facilities. The tax was supported by many community residents and the school district.

DeMar said this is a short-lived tax that is under a state statute population cap, and Lyon County will reach it soon.

"Instead of a vision for longevity, they've adopted this short-term solution that will ultimately, probably impact the availability of housing in the area," he said. "And the availability of housing is a big part of workers' employment."

The state set the population cap for this type of tax at 50,000, but Lyon County Manager Donna Kristaponis said there is a question about whether the Legislature will raise it. She said it's also based on the U.S. Census taken every 10 years.

According to the Nevada State Demographer's office, Lyon County's population was about 41,244 in July 2003.

Kristaponis said an expert testified at the meeting that construction taxes, such as this one, are typically absorbed by several parties, not just the builders. She said 30 percent of the new construction tax will be passed on to the buyer, 10 percent will be absorbed by the builder and the remaining 60 percent is absorbed by the land seller. She said income raised from this tax will go toward an important source: the school district, which is often the first thing prospective residents inquire about.

Kristaponis said builders could go elsewhere, but she doesn't know where else that would be.

"But, again, slowing down growth here would not be a bad thing," she said.

A representative with Lakemont Homes said this recent decision will not affect its building in Dayton. Jim Bawden, president of Landmark Homes, said their business will also continue in Dayton.

"This doesn't affect our business in particular," he said. "The costs are generally passed on to the consumer. We were a little surprised this passed. We were under the impression there were not enough votes."

n Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.