When the City of Henderson became the only municipality in Southern Nevada to allow short-term vacation rentals, council members said the ordinance would regulate the industry by honing in on illegal operators and making the cost of doing business prohibitive for bad actors via hefty fines.
A year later the ordinance has done little, if anything, to identify unlicensed rentals or drive out chronic violators, but it’s prompted a buying spree among investors, many of them from out of state.
In one neighborhood near Eastern and Robindale, which has no homeowners association prohibiting the rentals, more than 20 homes are licensed as STVRs and others operate illegally.
“There are so many loopholes in this process. For example, the city complaint line goes to a third party, not the city of Henderson,” says resident Sy Lbun, who lives on Via Romantico. He says guests routinely violate occupancy limits at a nearby STVR. Another neighbor reports “seeing tons of people going in and out of that place.”
A little extra income renting a room or hotels in your ‘hood?
Who is registering STVRs?
The reality is a far cry from the stated expectations of city council members who emphasized the need to regulate the burgeoning and controversial industry as a way of protecting residents who rely on short-term renters to augment their income.
A review of public records reveals that of the 280 licensed STVRs in Henderson:
- 36 percent are held by out of state investors
- 32 percent were owned by individuals prior to the ordinance
- 40 percent are owned by individuals who purchased after the ordinance
- 28 percent are owned by corporations
“The Nevada housing market is already very limited,” Culinary Union Secretary-Treasurer Geoconda Arguello-Kline said in a statement. “It’s unacceptable that out-of-state and corporate purchasers are able to buy up so many homes when Nevadans are trying to buy their first home.”
Henderson’s STVR hotline has logged 99 complaints in 2020 regarding 70 properties.
When it passed the ordinance, the city council promised a robust enforcement effort with hefty fines designed to offset the cost.
But according to records provided by the city, fines of an undisclosed amount are pending in four cases, and no licenses appear to have been revoked.
Under the ordinance, each operator of an unregistered property was to be assessed $500 a day it is rented.
In July 2019, city council members said the ordinance would allow the government to pinpoint illegal operators by hiring a compliance vendor.
“The vendors have software, they can scrape data and get down to the specific address and location,” Henderson Planning manager Eddie Dichter told the Current at the time. “There’s one that has a couple hundred cities they are working with.”
But after a year, the vendor has apparently failed to provide additional data on unlicensed STVRs, according to Henderson spokeswoman Kathleen Richards.
“When we developed the ordinance, it was estimated that about 422 short-term rental units were operating in city limits where they were not permitted,” she said, adding the city does not know how many are operating illegally now. She did not say why the vendor has not provided the anticipated data.
City council members did not respond to requests for comment.
Other cities, such as Denver, have shelled out substantial sums to STVR vendors that have failed to deliver.
The party house next door
Critics say STVRs attract a revolving door of revelers who are better served in any number of Las Vegas resorts than in residential neighborhoods. From a land use perspective, STRs, they say, are incompatible with the right to quietly enjoy one’s home, and bring uncertainty to the market.
Neighbors say they are concerned about filing complaints, out of fear that future potential buyers could unearth the reports while doing due diligence.
“Who is going to buy a home with a record of calls made to Henderson Police Department and the Hotline for disturbances caused by a nearby vacation rental? I wouldn’t,” says Sherri Green, who lives next door to an STR that is directly across the street from Nate Mack Elementary in Green Valley. “So, the City allows the STRs to continue operating no matter what and tells us to call the Hotline which makes our own home either unsellable or deeply discounted to the point that our investment is virtually lost.”
“A home-owner should always ask the seller/agent about the owner occupancy of the neighborhood/complex, which usually can be obtained from the HOA,” says Dr. Vivek Sah of UNLV’s Lied Real Estate Institute. “Additionally, lenders who do their due diligence properly will not lend to any complex that has a higher rental percentage than 20 percent.”
With nightclubs closed because of covid-19, police say STVRs are increasingly used for gatherings and they’re warning residents to be on the lookout.
In early August, Las Vegas Metro Police warned they are cracking down on illegal parties at vacation rentals after what they called a string of violent incidents. Then, on August 15 police say a man died after being shot at an STVR party on Hickham Ave. in the northwest part of the valley. Police say they found more than a dozen shell casings outside the home.
Henderson to hit pause
On September 1, the city will consider a moratorium on registration of STRs for 90 days as it drafts changes to the ordinance.
“These changes are based upon our experience with the registered STVRs currently operating within the City, concerns from neighbors where STVRs are operating, observations from staff, as well as concerns we heard from City Council,” the city’s website says.
Among the proposed changes:
- A distance separation between registered STVRs that would apply to detached, single-family homes.
- Change in occupancy limits.
- Reduction in the number of violations within a 12 month consecutive month period.
- Restricting the use of outdoor and pool/spa areas between established times.
- Requiring front yard street facing security cameras.
- Requiring additional noise monitoring devices to be installed around pool/spa areas located on single-family detached properties.
- Adding a definition of “party”.
- Reduction in the amount of time to respond to a complaint.
“We must craft enforceable laws that stop out-of-state investors from hoarding affordable housing and creating dangerous party environments in our neighborhoods during a pandemic,” said Arguello-Kline of the Culinary Union.
Green plans to ask the council for a 1,500 foot buffer between STRs and schools and for neighbors to be notified of pending applications.
“I’ve already been told by a Henderson official the council won’t go for it,” she says.