LAS VEGAS (KLAS) — A Friday hearing on a proposal that would establish rent control in Nevada brought an outpouring of support from the Culinary Union and cautions from a lawmaker who described himself as “a compassionate landlord.”
Senate Bill 426 (SB426) was welcomed by Culinary leaders and members as a greatly needed change in a state where rents skyrocketed as a housing shortage got worse after construction stopped during the Great Recession.
“Nevadans need strong, safe, secure neighborhoods,” Culinary Union Local 226 Secretary-Treasurer Ted Pappageorge told the Senate Committee on Commerce and Labor. “We have Wall Street landlords, private equity, large corporations buying homes, apartments, AirBnBs 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.”
He described the situation as a “cycle of unaffordability” and cited examples of Las Vegas apartments that raised rates more than 50% over a three-year period — one as high as 92%. Pappageorge said a survey of Culinary members found 21% had experienced rent increases of $500 or more. And fees on top of rent are becoming a more common problem, he said.
Union members told their stories of huge rent increases that they couldn’t afford, pleading for help from lawmakers. The bill is sponsored by Democratic Senator Pat Spearman of North Las Vegas.
SB426 would create the first rent control provisions in Nevada, setting stricter rules on rent increases and allowing tenants relief from cost-of-living increases. Among the rules, Landlords are prohibited from raising the rent during:
- the first year of a tenancy
- any 12-month period by an amount that exceeds the cost-of-living increase published by the Housing Division of the Department of Business and Industry
Rent increases would be capped at 5% as long as the tenant remains. Landlords are given opportunities for exemptions under certain circumstances, but strict requirements for notifications of increases are set up.
Rent control would not apply to units that are owned by government agencies, units where the owner lives on-site with four or fewer units, new construction (on or after 2024), units with reduced rents through federal or state programs or units operated by landlords with only one rental in the state.
Some of the provisions of SB426 create an uneven playing field for long-established rental companies in the state, according to Clark County Republican Senator Jeff Stone. He brought the voice of landlords to debate about the bill.
“During COVID, tenants had a really tough time,” Stone said. “But landlords really had a tough time, too.” He cited one tenant who owed the landlord more than $100,000.
But Stone said as a landlord he didn’t raise rents for people who couldn’t afford it, and he never lost a tenant because of a rent increase. He said with the housing shortage, he sees 30 to 40 applications for every available unit.
One portion of SB426 allows an exemption for new construction. The bill was crafted to avoid discouraging construction of new housing, and rent control would not apply to any units less than 15 years old. Stone took great exception to that. He said the legislation would result in rent increases so landlords can continue to make money under the conditions that would go into place with rent control.
While the complaints during the hearing were aimed at “corporate” landlords, Stone said the new rules would actually give them advantages.
“My concern is you’re exempting these larger builders — I would imagine because you don’t want them here in opposition because they’re the lion’s share of the issues that I think are being discussed here today,” he said.
Language that allows a “fair and reasonable rate of return” for landlords is included for “constitutional concerns” according to bill supporters. But Stone’s questions about what “fair and reasonable” actually means didn’t get a solid answer.