Nevada’s 2024 rental market stabilizing, but prices remains above pre-pandemic levels

Though experts predict 2024 could finally see more stable rents after rapid cost increases in recent years, many Nevada tenants are still feeling the strain as rents continue to outpace what is affordable for a person earning the median income in Nevada.

After rents fell in late 2022 for the first time since the COVID-19 pandemic began, last year was still marked by prices for rental units plateauing at rates significantly higher than before the 2020 COVID pandemic. The increased costs were somewhat alleviated by developers continuing to build new units in the state in 2023.

Landlords are offering more discounts and perks to attract tenants as more rental units become available and are staying vacant longer. Still, state leaders are also considering bigger-picture solutions that could make rents more affordable and political leaders look at how the bills brought to the 2023 legislative session could inform what housing policy goals could lie ahead in 2025.

Here’s a look at what happened in the rental market in 2023, and what experts think could happen soon:

Rents high relative to median income

In February 2024, the average monthly cost for a one-bedroom apartment in Reno was $1,402 and $1,293 in Las Vegas, according to the Nevada State Apartment Association.

Rents began dropping across the state during the second half of 2022. From August 2022 to July 2023, rents dropped around 8.5 percent in Las Vegas and 3.6 percent in Reno, while rents nationally dropped 1 percent in the calendar year 2023.

Despite rental prices stabilizing or dropping, they remain stubbornly high for many Nevadans.

The median income per person in Las Vegas is $3,022 a month and $3,603 in Reno, according to the U.S. Census Bureau. This means that if a person lives alone or is the sole breadwinner of their household, they would be spending 46 percent of their income on rent as a Northern Nevada resident and 43 percent of their income on rent if they lived in Southern Nevada.

The median income the Census Bureau reported is also significantly higher than the minimum wage in Nevada. According to the Nevada Housing Coalition, a person earning minimum wage — currently $11.25 an hour if an employer doesn’t offer health insurance — would need to work 82 hours a week to afford a one-bedroom apartment in the Silver State.

More renters — notably seniors — are also living on fixed incomes such as retirement and Social Security that don’t give them flexibility to respond to swings in the rental market. According to RentCafe, a media organization that shares data stories based on information from public government databases, the population of renters over 60 grew by 43 percent from 2007 to 2017 nationwide. It also projects that by 2035, nearly a third of renter households will be made up of seniors — making them the second-largest demographic of renters.

Supply increased last year, but could slow in 2024

Economic analysts expect apartment construction to slow in the upcoming year after last year’s initial boom. This is because of the cost of land, insurance and mortgage rates, according to Robin Lee, the director of the Nevada State Apartment Association.

Still, there should be more rentals open in 2024 compared to the pre-pandemic period. The Nevada State Apartment Association estimates that around 4,000 new apartment units will open in Las Vegas in 2024. In 2019, a little less than 1,500 units were completed.

“Everybody's feeling the pain of inflation, so that includes developers. We won't see … as much delivered to the market,” Lee told The Nevada Independent in an interview. “So we're looking at basically stabilization the same across the board.”

Higher vacancy rates

The Nevada State Apartment Association reported an 8.8 percent vacancy rate in the Reno-Sparks area in July 2023. It’s a sizable jump compared to the second quarter of 2021, when the vacancy rate was 1.63 percent.

In Las Vegas, the vacancy rate for rentals was about 8.5 percent at the beginning of last year, compared to 4.1 percent in 2021.

Those higher vacancy rates are leading landlords to vie for more attention from potential tenants.

“According to the numbers that I have, about 21 percent of properties are offering concessions right now,” Lee said. “I think that's a little low, to be quite honest.”

Concessions are temporary benefits offered to tenants designed to either attract a renter to move in or retain an existing tenant. Some common concessions include updated appliances, reduced rent for a limited period of time, free on-site amenities or waived fees (such as pet fees).

However, rental units are at least $500 more now than they were before the pandemic.

Housing legislation plans during the interim

The 2023 legislative session, which featured numerous bills that dealt with slowing the growth of rents and giving renters more recourse in evictions, has been a talking point for politicians and activists throughout the beginning of 2024 and heading into the 2025 legislative session.

Susy Vasquez, a former president of the Nevada State Apartment Association, told The Nevada Independent in early 2022 that increased rent prices could be blamed on a lack of apartment inventory and because of an increase in remote work that allowed people to work for companies based in states that pay more relative to Nevada but live in the Silver State.

2023 housing bills included SB426, which would have prevented landlords from raising rent within a tenant’s first year living in a unit and limit rent increases to 5 percent after the first year. The bill died in committee.

There was also AB298, a bill that would have capped rent increases at 10 percent from July 2023 to December 2024 for renters over the age of 62 or people who receive Social Security benefits — a measure vetoed by Republican Gov. Joe Lombardo.

During the March 6 IndyTalks event, Lombardo responded to criticism from activists in an interview with The Nevada Independent CEO Jon Ralston and said that he did not regret vetoing any of those bills.

He said it’s a fallacy that rent control is the solution for housing affordability challenges and contended that rents are being driven up by inflation, construction costs and the slow pace at which the federal government releases public land in Nevada for development.

“It’s inventory, it’s supply and demand,” Lombardo said. “The reason why we suffered (during the pandemic) is because the lack of diversity in our economy. We don’t have an economy conducive to high wages, in the majority. That’s what we’re trying to change.”

He said housing affordability was one of the top two issues he cared about, but that he disagreed with many of the housing proposals that made it to his desk last year.

“There was well over 28 landlord-tenant (bills) … I didn’t veto all 28 of them,” Lombardo said. “They had to be measured, they had to be evaluated, you have to be educated on the particular issue and … have an understanding of what is benefitting the whole versus the few.”

Maurice Page, the director of the Nevada Housing Coalition, an organization that supports more affordable housing in Nevada, said that people should be keeping in mind what politicians are discussing around housing affordability issues.

“(We need to) make sure that when we’re electing folks, that they’re putting housing as one of their top priorities. That may not be the number one goal but it definitely has to be within their top three,” Page said in an interview with The Nevada Independent in February.

He also emphasized bringing in leaders who are educated about affordable housing.

“Affordable housing affects the whole market,” he said. “We want our voters to be able to elect individuals that (have) a desire to change the landscape of housing here.”

— This story is used with permission of The Nevada Independent. Go here for updates to this and other Nevada Independent stories.