Nevada SB391 — Reading Room

Nevada is considering a bill to limit real estate investors to purchasing fewer than 100 homes annually.  
  
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# Nevada SB391

| | Kevin Erdmann  
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| Nov 20  
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Nevada is considering a bill to limit real estate investors to purchasing fewer than 100 homes annually. It appears to be supported by Democrats and generally opposed by Republicans.

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Apartments, mobile homes, and new homes are exempted. It reminds me of weak rent control ordinances. It's a foot in the door to more intrusion, and probably tends to reduce activity more than the 1st order economic effects would suggest. And it will increase profits for those who do transact in the market because it adds an uncertainty premium for those who seek to make investments in the market.

The exclusion of mobile homes and apartments had to be added in an amendment, if that gives you an idea of how much thought was put into it. Or, possibly, the original idea was to make it impossible to buy and sell large apartment buildings or mobile home parks.

That would meet voter approval, since Vegas residents hate apartments as much as people everywhere else do. In Figure 1, single-family permits per capita x 1,000 in Nevada is black, multi-family is red, multifamily in Los Angeles is blue, and multifamily in the Midwest is orange. I included these various very different markets to make the point that blocking multi-family housing is nearly universal policy in the United States.

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Figure 1

There are a handful of regions that have bucked the trend. Austin has been permitting multifamily units at an annual rate of about 10 units per capita x 1,000 in recent years. Nashville does a decent job. Oddly, given Figure 1, Reno has been permitting multi-family as well as Austin in recent years. Las Vegas, on the other hand, is low. That doesn't show up entirely in Figure 2. The number shown here is a bit lower in Reno than the numbers I get directly from the Census Bureau website. I'm not sure why.

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Figure 2

Because of their more active multifamily construction, Reno has expanded their housing stock faster than Las Vegas in recent years, but Reno must especially be experiencing a demand boom, because it doesn't seem to have shown up as lower rents. Though, in my metro area data packages, Reno is much closer to a sustainable construction rate than Las Vegas is, and it appears to have had higher rent inflation before Covid that has flattened, so 2nd derivative trends do look good in Reno.

Anyway, this wasn't true before the 2008 crisis. Las Vegas used to permit a good number of multi-family units.

I'm not sure what's happened to Las Vegas. Clearly it was hit very hard by the 2008 crisis and the mortgage crackdown. But, even then, it was a bit of an odd duck. It permitted a lot of houses, but the market was completely unresponsive to the demand wave that hit it before 2008. There is a widely and passionately believed myth that Las Vegas had a building boom before 2008. It did not. It only had a price bubble, precisely because there was _no_ supply reaction to the surge of migration out of California.

Since 2008, Las Vegas looks somewhat like the Midwest in both single-family and multi-family construction. That's odd because while post-2008 production looks like the Midwest, post-2008 price appreciation looks more like the fast growing cities. Las Vegas has the demand that drove up rents and prices faster than they have increased in slower-growing places, but it doesn't have the supply response.

Something is gumming up the works in Las Vegas. It could be that the mortgage crackdown really hurt Las Vegas hard. It could be that the typical resident in Las Vegas can't qualify for a mortgage under current standards, in which case they _**desperately need**_ large scale investors to buy and build thousands of homes. My model puts the shortage in Las Vegas at well over 100,000 units.

Put it in that light, and add in what the streets of Las Vegas are like, and even were like when there wasn't a national housing shortage, a bill like this could very easily create a massive human tragedy. Homelessness at a dystopian scale.

The problem doesn't end at the state legislature. Democratic Congressional Representative Susie Lee has a press release posted that is titled, "Lee Calls for Transparency on Big Corporate Landlords Buying Up Nevada Homes and Jacking Up Prices". It includes this line, "It's estimated that **15%** of the single-family homes in Las Vegas are owned by corporate investors and these massive corporations are trading homes like stocks."

That is a statement that I think is enough of a distortion to be called a lie. About 15% of single-family homes in Las Vegas are rentals. Well more than 90% of them are owned by small local investors.

That sentence is followed by, "Recent local reporting has **uncovered** that New York-based hedge fund Pretium Partners is most likely the single largest homeowner in Clark County. Pretium-owned Progress Residential, a homes-for-rent management company, owns at least 3,190 homes in the county as of the end of February." As if this is some secret number that isn't published by any number of real estate information aggregators.

The link in that sentence is to an article that notes that "Maurice Page, executive director of the Nevada Housing Coalition, said the continued expansion of corporate investors into the housing market is is both 'unjust' and 'unsustainable.'" The web page of that group claims that Nevada is short 118,026 affordable homes for families with incomes below the median. I just can't imagine what makes these people tick.

By the way, this complaint is self-debunking. If Nevada is lacking 118,000 affordable homes and the biggest, baddest corporate owner owns 3,190, then there is no conceivable math that could blame that little mouse of a landlord from trampling the elephant of Nevada housing needs.

Of course, a large part of the problem is city processes like this:

> Residents of Las Vegas's historic West Side voiced strong opposition to a proposed four-story apartment complex during the City Council meeting on April 17, 2025. The project, which aims to revitalize a long-vacant lot, has sparked heated debate among community members concerned about its impact on their homes and neighborhood.  
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> Cordelia Freeman Wallace, a local homeowner, expressed her fears about losing sunlight vital for her homegrown fruits and vegetables, stating, "That light would be completely decimated." She highlighted concerns over privacy, increased noise, and potential crime, citing existing issues with homelessness in the area. Wallace emphasized the need for developments that align with the character of the neighborhood, advocating for single-family homes instead of high-density apartments.

To their credit, Las Vegas officials unanimously approved it. As far as I can tell, this is the satellite view of the location. In every story I saw about this project, the area was referred to as "historic".

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This appears to be "affordable" housing, in that it was planned for families with lower incomes, so I suppose the Nevada Housing Coalition approved of it.

For the past decade, Las Vegas has pretty regularly exhibited housing market trends that I would associate with an annual construction shortfall of about 15,000 units - year after year, for a decade - which has led to extremely inflated land values. And, yet, just like in 2005, no supply reaction. But, now the annual supply is only one third what it was in 2005.

And they want to drive capital _out of_ there real estate market. They don't just need some out-of-state investors. They need some out-of-state politicians and advocates.

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The issue they should really be trying to get at is why out-of-state investors, or any investors, apparently already view real estate investments there with trepidation.

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