Nevada rent prices revert to pre-pandemic trajectory, report says

Michael Lyle

(Nevada Current) Following some aggressive spikes that accompanied the economy’s emergence from pandemic shutdowns, Southern Nevada rents today are about what they would have been if the pandemic hadn’t happened, a recent report suggests.

“The data suggest that asking rents, today, are on par with what they would have been projected to be based on how the market was trending pre-COVID-19,” says a report released in November by UNLV’s Lied Center for Real Estate.

But that finding, and data correlating current rents with area incomes, underscores that rents had been rising at more than 5% annually prior to the pandemic, and housing was already becoming increasingly unaffordable in Southern Nevada.

UNLV’s Lied Center for Real Estate’s report looked at the availability of “workforce housing,” which consists of rental units that people in households making between 60% to 120% of area median income (AMI; $87,800) can afford.

That covers roughly a third of the Clark County workforce, and includes teachers, firefighters, law enforcement, hospitality staff and health care workers, according to the report.

For those making 60% of AMI, about $25 an hour or $52,000 a year, only a third of units are affordable.

The average rent for a one-bedroom apartment is $1,486 per month as of November 2024.

Housing is considered affordable if people don’t spend more than 30% of their income on rent and utilities according to the U.S. Department of Housing and Urban Development.

The study also factored in utility expenses under multiple cost scenarios. In a “mid scenario assumption” where a person is paying $232 a month on utilities, on top of rent, only 30% of market-rate apartment buildings in Clark County are affordable.

For those in the 70% to 80% AMI range, about $61,000 a year, about 46% of those apartments are affordable.

In a higher cost scenario of someone paying $304 in utilities – common during triple degree heat summers in Southern Nevada – in addition to rent, options for affordable apartments dwindled further.

For someone making $52,000, only about 27% were deemed affordable while for those making $61,000 only about 40% were affordable.

“It is important to acknowledge, however, that while these apartment units may be affordable, they may not be available in cities with constrained production of market-rate multi-family property,” the report notes.

There is also a less than 10% vacancy rate in Clark County for market-rate apartments.

The analysis found that the number of market-rate apartment units under construction has shrunk since the beginning of 2023 and that the number of affordable apartments “under construction today is down over 37% relative to the number of units under construction in the second quarter of 2023.”

Plausible factors to the trend included higher interest rates, increased costs in construction materials, higher labor costs, a decrease in available land and zoning issues.

“We draw attention to zoning because regardless of what it costs to construct an apartment building, without the requisite zoning, apartments simply cannot be built,” according to the report.

Housing affordability and skyrocketing rents were only exacerbated by the Covid-19 pandemic. Rents in Clark County have increased between 20% and 30% since 2020, though the report found “rents today are down 3.7%” compared to the second quarter of 2022.

Oxfam America found that in Nevada, 418,444 workers in Nevada make less than $17 an hour, far less than the “workforce population” making 60% of AMI.

Oxfam’s report, which came out in July, noted that 42% of Hispanic women, 34% of Black women and nearly 29% of Asian and Indigenous women are lower-wage earners.

State lawmakers passed legislation in 2019 slowly raising the wage from $8.25 per hour – $7.25 an hour if an employer provides quality health insurance – by 75 cents each year until finally reaching $12 in July of this year.

The state’s two-tiered wage structure, which allowed employers to pay $1 less if they offered health insurance, also ended in July.

The National Low Income Housing Coalition’s recent “Out of Reach” report has shown those earning the minimum wage would have to work 85 hours to afford a one-bedroom apartment at the fair market rate of $1,329.