Rents in the Silver State are skyrocketing and the association representing apartment complex owners suggests state lawmakers who uttered the phrase “rent control” in Carson City are to blame.
“Well, there was discussion about rent control, about migrating in that direction, and I don’t know if the industry got a little worried,” says Susy Vasquez, executive director of the Nevada State Apartment Association. “I’m not sure if what was going on at the time with the Legislature was impacting the way people were looking at the market.”
“No one was even talking rent control,” said J.D. Klippenstein of Acting in Community Together in Organizing Northern Nevada (ACTIONN). “It wasn’t even a topic of discussion. It was a tool to steer away from discussion.”
“If landlords are raising rents it is because of market demand,” he said. “A lot of powerful interests wanted to kill the effort to give local governments the ability to address affordable housing. Now they’re saying ‘Look what happens when we talk about rent control. Rents go up.’”
Dr. Vivek Sah of UNLV’s Lied Institute says rent in Southern Nevada increased 5 percent from just the first quarter of 2019 to the second quarter.
“It was a little shocking to me but in speaking to my membership, it probably is accurate,” says Vasquez.
The current median rent in Nevada is $1,423, according to the Zillow Rent Index.
Based on the standard formula of allocating no more than a third of income to rent, the monthly income needed to sustain a typical rental in Nevada is $4,743 or $56,920 annually, according to BankRate.com.
“Homeownership is out of reach for more than half of Nevadans, and renters are priced out of the market. Over 200,000 Nevada families are rent-burdened,” Sen. Julia Ratti testified during the session. “This means they pay more than one-third of their annual income toward rent. They are one emergency away from missing a rent payment.”
Ratti sponsored Senate Bill 398, which would have granted legislative authority to local governments to take actions to address affordable housing, such as passing rent control measures or imposing restrictions on developers to include low-income or affordable housing in their developments. It was not approved.
Rent control is best imposed by local, not state governments, says Klippenstein.
“What works to address affordable housing in Las Vegas or Reno is not likely what’s best for the rurals,” he said in an interview.
“The Pandora’s Box has been opened,” Vasquez said, suggesting lawmakers may return to the prospect of local governments assuming authority for affordable housing matters. “In educating the Legislature, we have a hold for now.”
“They didn’t go in the direction of rent control, but when you say rent control, we have a lot of owners from other states, and landlords are facing it in other states,” Vasquez says. “I want to say that’s what it is. There really is no other reason for 5 percent rent growth.”
Sah says there’s no causal relationship at this point between legislative musings on how to address the housing crisis and the increase in rents.
“There are other factors to consider such as continued demand due to in-migration and job growth locally, as well as high home values pricing out potential/prospective home-buyers,” he says.
The average rent for a Reno apartment in April 2019 was $1,241, up 7.5 percent from a year ago, according to the online service Rent Jungle.
The average rent for an apartment in Las Vegas in April was $1114, an 11.49 percent increase year-to-year.
“There’s a lot more inventory in the system, which is impacting rates and vacancies. We are seeing tiny hints of stabilization as units are absorbed but it is definitely an impact, anytime you see release of units into the market.”
The short-term rental market, which is wreaking havoc for residents in other locales, has had no effect on rental prices in Nevada thus far, says Vasquez.
“It’s a ghost market so we really don’t know,” she says. “When the Raiders Stadium comes into play, we’re looking to see whether there will be people who are impacting the market by switching to short-term for the season.”