by Subrina Hudson, Las Vegas Review-Journal, May 18, 2022
As sticker shock continues at the grocery store and gas station, rising rents also are taking a toll on the bank accounts of many Southern Nevadans.
A recent study found that residents in the Las Vegas metro area are experiencing one of the highest percentage rent increases from pre-pandemic 2019 to 2022.
Out of the 15 large U.S. metros where rents are rising the most, the Las Vegas-Henderson-Paradise area ranked No. 2 with median rent in 2022 showing an increase of 24.8 percent to $1,485, up from $1,190 in 2019. The Sacramento-Roseville-Folsom, California metro area was No. 1 with its median rent rising 25.3 percent to $1,830 compared with $1,461 in 2019, according to the study released by San Francisco-based rental software firm Stessa Inc.
It’s no secret that Southern Nevada’s housing market has been on fire over the past year as limited supply helped push buyers to compete for homes and pay well above the asking price. That flurry of activity has impacted the rental market, Stessa said.
“With rising real estate prices, 70 percent of the growth of the rental market since 2009 has come from higher-income earners who might otherwise have bought a home,” Stessa researchers said. “And as more high earners enter or stay in the rental market, builders and developers are incentivized to provide more luxury units, which means less new stock to meet the needs of low- and middle-income earners.”
The pandemic exacerbated these issues, leaving would-be homebuyers, priced out of the market, to continue renting. Meanwhile, developers can’t keep up as they face their own price increases, supply chain challenges and a tight labor market.
Nationally, median rents rose 12.5 percent in 2022 to $1,445, up from $1,284 in 2019. And it’s units of all sizes that are seeing increases with prices rising more than 10 percent between 2019 and 2022, according to the Department of Housing and Urban Development.
Rising rent prices led the Culinary Workers Union Local 226 to launch a ballot initiative Wednesday to cap rents in North Las Vegas.
Nevada State Apartment Association Executive Director Susy Vasquez said rapid inflation is adding uncertainty to the rental housing industry. Last week, the Labor Department reported consumer prices jumped 8.3 percent in April from 12 months earlier — slightly below the 8.5 percent year-over-year surge in March that was the highest rate since 1981.
“We realize that rents have been increasing faster than incomes and that many Nevadans are struggling to pay their bills,” Vasquez said in a statement, in response to the Culinary Union’s ballot initiative. “We’ll continue working with government and community leaders to address these problems, starting with advancing public policies that help our industry build more housing that Nevadans can afford.”
Contact Subrina Hudson at [email protected] Follow @SubrinaH on Twitter.