As housing affordability remains a top concern for Nevada families, some local leaders are attempting to resurrect rent control using the rebranded name "rent stabilization." But as the adage goes, if it walks like a duck and quacks like a duck, it’s a duck.
Rent stabilization is no different than rent control. And rent control has repeatedly been shown to discourage investment in new development, poorer maintenance of existing rental homes and an overall decline in the number of available rental homes. Changing the name doesn’t change the outcome.
The mechanics of rent stabilization and rent control are identical. Both rely entirely on government-mandated price caps. Historical data and economic consensus show that such limits carry significant negative consequences. When local governments artificially limit property earnings, capital moves elsewhere. This could lead Nevada investors and developers to direct their funding elsewhere, potentially halting the new construction Nevada desperately needs to accommodate a growing population. For example, after Montgomery County, Md., enacted rent stabilization in July 2023 — with the law taking effect in July 2024 — the area experienced a severe contraction in new housing development. State permitting data analyzed by housing analyst Jay Parsons show that multifamily building permits plummeted 97% in the year after the law took effect, with developers and lenders openly citing the new price caps as the reason for pulling their projects. Expanding the housing supply requires a financially viable environment for developers and builders.
Additionally, collateral damage of rent regulations heavily affects vulnerable populations. Artificial price limits cause demand to surge and supply to shrink, prompting property owners to become hyperselective among dozens of applicants. A landmark economic study by Stanford University researchers examining San Francisco's housing market found that rent control reduced rental housing supply by 15% and drove up citywide rents by 5.1%. This reduction accelerated gentrification and pushed minority and lower-income renters out of regulated neighborhoods. Targeted policies, such as rent limits applied exclusively to seniors, also generate negative outcomes. Government mandates limiting rent increases on older tenants create a financial disincentive for property owners to rent to seniors.
Furthermore, property upkeep suffers under these regulations. When independent landlords lack the revenue to keep pace with rising inflation, property taxes and insurance premiums, they defer maintenance. Deferred maintenance leads directly to public health concerns. Buildings fall into disrepair, creating hazardous living conditions and community decay. Similar scenarios have played out in New York and California, demonstrating the severe risks of heavy-handed housing regulations.
Nevada’s economy relies on continuous growth, investment and building. Instituting price controls works against the goal of meeting our state's housing needs, especially considering Nevada consistently has one of the most severe shortages of affordable rental homes in the country. Encouragingly, recent market data show that housing prices are already beginning to moderate as inventory grows and the market enters a natural correction phase. Rather than interfering with these market forces, policymakers should focus on proven strategies that increase supply and expand housing opportunities for Nevadans, and look toward the comprehensive housing solutions championed by Gov. Joe Lombardo.
The governor's approach targets the core of the crisis by addressing supply and land availability. The federal government controls roughly 85% of the land in Nevada. By aggressively working to unlock the restrictive federal Bureau of Land Management boundaries surrounding the Las Vegas Valley, cutting bureaucratic red tape and streamlining permitting processes, Nevada can build the necessary inventory to naturally lower prices.
Rebranding rent control as “rent stabilization” may sound appealing, but a new label cannot erase a failed track record. Nevada’s housing challenges demand real solutions, not a flawed policy with a fancier name.
Peter Guzman is the president and CEO of the Latin Chamber of Commerce.