Nevada Senate bill would cap rent increases
LAS VEGAS, Nev. (FOX5) - Nevada state lawmakers debated the Neighborhood Stabilization Act Friday.
The bill would tie rent increases to the state’s cost-of-living index for the area surrounding a unit. That number would be determined by the state’s housing authority. It also prohibits landlords from increasing rent during the first year of a tenancy.
Senator Pat Spearman’s bill includes specific language that declared a housing crisis in Nevada.
“A minimum-wage earner would need to work 62 hours to afford a studio apartment,” Senator Spearman said to the Senate Commerce and Labor Committee Friday morning.
Senator Spearman also said the affordability gap disproportionately affects women and people of color.
Representatives of Nevada’s Culinary Union joined Spearman in support of her bill.
“We have Wall Street landlords, private equity, large corporations buying homes, apartments, Air BnB’s,” the Culinary Union’s Secretary-Treasurer Ted Pappageorge said during Friday’s hearing on the bill. “(They’re) cornering the market, raising rents beyond affordability, causing evictions and churns of residency, and creating a generation of renters and denying that generation the American dream of owning a home.”
Senator Spearman says about 30% of single-family homes in Nevada are owned by investors.
Senator Jeff Stone is a landlord himself and wonders about a clause in the bill that refers to a landlord’s profit.
“How do you define reasonable return on investment,” Stone asked about a clause in the bill meant to assure landlords they’d still be able to turn a profit, “When there are so many variables that different landlords have to contend with?”
Senator Stone argued that while the bill’s goal of helping renters is noble, mom-and-pop landlords like himself could suffer from having to apply for different exemptions to the bill.
“To create all these bureaucratic pathways that I have to go through to justify what I can charge a tenant, not to charge 5% when inflation is 8.5%, you’re already requiring landlords to take a 3.5% hit,” Stone said.
One of those exemptions includes new construction. Senator Stone says it gives an advantage to large investors but also does not do enough to incentivize new construction.
“You are going to hinder investment,” he argued. “And if you hinder investment, it’s going to exacerbate the supply and demand issues that we have here in Nevada.”
Edward Goetz, a professor of urban and regional planning at the University of Minnesota, also weighed in during Friday’s hearing. He pointed out that every rent control measure in the country has an exemption for new construction and that every study involving rent caps like the one proposed in the Neighborhood Stabilization Act has not shown a decrease in the housing stock.
“These exemptions exist so as to not disincentivize the new construction of housing,” Goetz said. “Because, of course, the overall supply is an important concern as well.”
The bill does not apply to dwelling units that are owned by a governmental agency or by a landlord providing reduced rent through a government program. It also does not apply to units that are the only ones owned by the landlord in Nevada, nor for structures that contain four or fewer families where the owner occupies one of the units.
Copyright 2023 KVVU. All rights reserved.