Rent stabilization laws are all the rage but no one is talking about how these laws would impact renters in places like Clark County (Las Vegas Valley, Henderson, etc.) and beyond.

Here’s the truth: Rent control creates more demand and fewer single-family homes, apartments and condos on the market. Leaving Nevadans in the same spot we started – high rents and not enough affordable housing to go around.

Supply vs Demand & How it Affects Nevada Real Estate Market Trends

It’s a seller’s market, which is bad for the 40% of Nevadans who don’t own a home. As such, the median sale price has gone up big time over the past few years. The good news for investors is that there’s a reason to build, but only if the conditions are right. In a balanced market:

• Growth from population increase and buyer demand increases list prices.
• Developers build more homes in response to price growth. This increases the supply and ends the bidding wars.

Adding strict rent control to the housing market in the Las Vegas Metro area or anywhere in Nevada will discourage real estate investors from building and leave most renters worse off.

Rent Control’s Impact on Investment and Construction in the Nevada Housing Market

Many believe that capped prices should also lead to rent and home prices dropping left and right. If it were that easy, New York and California wouldn’t constantly be in the top five states with the highest rent. 

Studies have shown that rent control laws can lead to less building and investment in multi-family construction (i.e., apartments, condos, housing developments, etc.), housing inventory shortages, and the steady decline of affordable homes for sale and rent – Which is exactly what Nevada doesn’t need. 

Rent Control – A History of Failures

There aren’t many (if any) situations where these restrictive laws have helped anyone other than people already in rent-controlled units – and even that’s debatable. On the other hand, there are plenty of examples where they’ve hurt housing availability and conditions.

• New York City: Decades of rent control have reduced housing turnover as renters hold onto below-market units, limiting supply and driving up median home prices.
• San Francisco: Stricter rent control has cut rental housing supply by 15%, making it less affordable, according to a Stanford University study.

Further, studies conducted by the National Multi-Housing Council and commentary from the CATO Institute both suggest what we already know – Rent control leads to higher rents for uncontrolled units and a lower housing supply. 

A Better Path Forward for Nevada Real Estate & Affordable Housing 

Nevada can avoid these mistakes by making housing a top priority and using strategies that work. For example, in Austin, TX zoning changes allowed more affordable housing across the state. Minnesota and Colorado are increasing public-private partnerships to address housing supply.

No city or state has ‘solved’ the housing crisis but these examples give us what works. That’s reduced red tape, more partnerships with private companies, and increased rewards for builders.

Together We Can Make a Change

Rent control isn’t the answer to Nevada’s housing crisis but it’s up to you to tell our legislators to support smarter housing policies. Join Nevada Policy in supporting solutions that increase housing supply, stabilize prices, and create more opportunities for buyers and sellers throughout the state.