(Photo by Ronda Churchill for Nevada Current)
Short-term rentals in unincorporated Clark County are likely to be scarce and competition for permits fierce, given indications from County Commissioner Tick Segerblom during a town hall Wednesday night.
“We’re going to legalize them but there are going to be limits on them,” Segerblom said. “We can’t just ignore it anymore.”
Thanks to a law passed last year by state legislators, Clark County, which has steadfastly resisted efforts to allow vacation rentals, will be forced to allow them come July 1.
“We’re a tourism town. We make our money off of tourists, and those tourists pay a good tax and that tax is used to teach or educate our kids” Segerblom said, adding STRs “are really hurting the basis of our economy and especially the tax structure.”
In 2018, the Current reported local governments in Southern Nevada had lost $45 million in room tax revenue to STRs since 2015, with $33.5 million attributed to properties in unincorporated Clark County.
The City of Las Vegas at the time estimated each rental generates about $3,000 a year in room tax, or about $20 million a year based on 6,736 rentals.
Airdna, a website that scrapes data from STR hosting platforms such as Airbnb, lists 12,740 STRs in Southern Nevada in the fourth quarter of 2021, up from 9,676 in the fourth quarter of 2018.
The average monthly rent for an Airbnb in Las Vegas is nearly $10,500, which is 555% more than the average rent for a long-term lease, according to Airbnb data collected by Compare the Market, a price comparison website based in the United Kingdom.
“I know that I have made a lot of work and the Nevada Legislature has made a lot of work for the Clark County Commission, but I think it is about time that we start doing that hard work and making those hard decisions,” Assemblywoman Rochelle Nguyen (D) said of the bill she sponsored, adding the ban is not working.
Segerblom said Nguyen’s bill is “forcing us to face the fact” that Clark County is a haven for unregulated STR operators.
The new law gives the County Commission the ability to place stringent controls on short-term rentals, from occupancy to the distance between them, said Nguyen, and a series of town halls will give residents a chance to determine what they want from their neighborhoods.
“Do they want to see the minimum distance requirement of 660 feet or do they want to see something stronger like in the City of Henderson that has 1000 feet distance requirements?” Nguyen asked. “Do they want to have a maximum occupancy of 16 people like the bill allows? Or do they want to have minimum occupancy requirements?”
“The number one complaint I get is party houses,” Segerblom said, adding the county tries to shut them down, but when code enforcement arrives “the party’s over.”
Segerblom says the current fine of $1,000 is useless.
“I just made $20,000 for a weekend. If you want to fine me a thousand dollars, I’m happy about it,” Segerblom said, adding the new law allows a fine of up to $10,000 a day. “We have some teeth now but we are ultimately going to have to go to court and we’re going to have a legal team that is sharp.”
The County could decide to permit only owner-occupied properties, similar to the City of Las Vegas, which allows homeowners to rent out a room rather than an entire house.
“Personally I like the owner-occupied,” Segerblom said. “I think that gives you much more control.”
“If you do owner-occupied, it’s going to be a disaster,” said a speaker at the town hall who only identified herself as Cindy, and who said she owns short and long-term rentals in Henderson.
Cindy says she pays “anywhere from $1,500 to $2,500 or more in the City of Henderson every month with my taxes. And that’s a five bedroom house.”
She says allowing one room to be rented out won’t generate the money Clark County will need for enforcement.
Others said restricting STRs to homes occupied by the owner will perpetuate unpermitted rentals.
But Nguyen noted the new law requires permitted operators to include their license information on website platform ads for their property. Local governments can then instruct platforms to remove listings that lack a permit number.
“I have been breaking the law for five years,” said STR operator John Baker, who says he rents out a room in his home. “My neighbors know. I’ve never had a problem with anyone staying in my house.”
Baker said he thinks restrictions on owner-occupied rentals should be less stringent than on short-term rentals of entire houses.
Homeowner Lisa Skurow lives amid a number of STRs that have been remodeled without permits, according to Clark County records.
“My big concern is not only that these people are operating illegally but also giving the consumer the false sense that they are in a safe property,” Skurow said. She encouraged the County to exclude from the permitting process STR operators who have unpaid fines.
County officials said qualified applicants could be selected via lottery, or first come, first served, based on a time-stamp on their application.
Segerblom warned against speculating on properties in the hopes of getting a license.
“I would say probably for the first round, It can be very difficult to predict whether you would get a license or not. So I wouldn’t risk the family jewels on buying a house, thinking you’re going to get one of these in the first round.”
Former Clark County Commissioner Chris Giunchigliani, an opponent of STRs, said the rentals have “exacerbated the problem of housing – affordable housing.”
Giunchigliani said the Legislature needs to revisit the failed Senate Bill 57, which would have allowed Clark County to place super priority liens on properties owned by violators. Currently, a lien placed by the government for unpaid fines can go unpaid until the property is sold.
Giunchigliani also suggested the County ban corporate owners and permit only owner-occupied properties.
“It’s more than just the disturbance of the neighbors,” Giunchigliani said. “It really is just destabilizing a neighborhood and taking housing off the market that families need desperately in Nevada.”
Assembly Bill 363 requires Clark County to:
- Establish an annual fee for authorizing STRs
- Liability coverage minimums for the unit
- Prohibit the rental of a residential unit or a room in an apartment building.
- Establish minimum two-night stay for non-owner occupied property and one-night stay for owner-occupied
- Establish minimum distance of 660 feet between any residential units except in a multifamily dwelling, and any other minimum separation requirement the board determines is necessary
- Require 2,500 feet distance between STRs and a resort hotel
- Maximum occupancy may not exceed 16 people per unit
- Limits STRs to no more than 10% of a multifamily dwelling, or stricter standard established by the owner
- Prohibit in common-interest community unless expressly allowed
- Establish a maximum number of authorizations a person may hold, which may not exceed five authorizations per state business license
- Establish a maximum number of authorizations that may be issued for the rental of rooms within a single residential unit
- Define “party” as a gathering of people that exceeds the maximum occupancy of the residential unit
- Prohibit the use of the residential unit for parties, weddings, events or other large gatherings
- Establish specific requirements for noise, trash and security
- Establish a process for a person to report violations
- Establish a schedule of civil penalties for violations
- Penalty imposed may not exceed $1,000 for a single violation or the nightly rental value of the residential unit, whichever is greater
- The fine for renting a unit without a permit must not be less than $1,000 or more than $10,000 for a single violation
- State business license required in addition to county authorization.
- Owner must have a designated local representative available 24/7
- Include educational information in the unit, including occupancy limitations, emergency telephone numbers, safety information, trash requirements, parking rules and noise regulations.
- The County may suspend or revoke any authorization
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