Apartment rents in Las Vegas are still rising, but not as much as in recent years, says a new report from the Nevada State Apartment Association (NVSAA).
Suzy Vasquez, executive director of the NVSAA, says rents are “about 15 percent higher than their pre-recession peak, but are now going up at a slower rate than past years.”
The average rent at the end of 2019 was $1,080, up 4.4 percent from the previous year. The average rent at the end of 2018 was up 7.1 percent year-to-year.
By comparison, the inflation rate in 2019 was 1.65 percent.
“We’ve had an influx of supply,” says Vasquez. “That’s fueling a normalizing of the market. Over the past ten years we haven’t seen a normal market.”
Las Vegas has 165,560 apartment units on the market, according to the NVSAA, with 3,827 units under construction at 18 projects, many of them straddling the 215 Beltway. The Southern Nevada market added 2,173 units in 2019.
“We still need to build more,” Vasquez says, adding the National Apartment Association projects Nevada needs to add 30,000 units during the next decade.
“In Reno, we’re adding ten percent to the market,” says Vasquez. “That’s a huge number. They haven’t been building very much and they are starting to catch up.”
Last year, when rents rose by 5 percent quarter-to-quarter, the apartment industry said the jump was because of the mere mention of rent control at the Legislature.
Vasquez says the NVSAA is hoping to head off a reprise in 2021.
“Affordability continues to be a concern. But with normalization of the market and rent growth not being as aggressive as it has been in the past, we’re showing supply and demand is working.”
But market forces are on the blink for low-income Southern Nevadans.
Of the 3,827 units under construction, none are what the NVSAA designates as one- or two-star units with an average rent of $762. Only 735 units are rated as three-stars with an average rent of $1,007. The vast majority of units under construction — 3,092 — are four- and five-star properties, with average rents of $1,274.
“These are all private market projects,” says Vasquez. “Without subsidies, it’s not possible to build a project with rents that are less than $1,000 a month.”
The NVSAA is also hoping to head off the kinds of regulatory changes that characterized the 2019 Nevada legislative session, in which activists sought to codify protections for renters.
“We are being proactive, so we are getting ahead and educating our members with best practices,” Vasquez says. “And we’re building partnerships with other trade groups and legal services. We want to work with them to either educate residents or landlords.”
The report notes competition the apartment industry faces from single-family homes rented out by owners, “including institutional investors that (sic) own hundreds or even thousands of homes in Southern Nevada.”