Report: Las Vegas One of the Least Affordable Housing Markets in the Country
Las Vegas has been identified as one of the least affordable cities within the United States, according to fresh findings from the Urban Land Institute’s 2024 Home Attainability Index. Ranking as the 11th least affordable city, a mere 18 percent of homes available on the market are affordable to a four-person household earning the median income of $70,723, as reported by the census.
This designation places Las Vegas alongside other notoriously expensive cities such as San Francisco, San Jose, Los Angeles, Honolulu, and Stockton, which occupy the top five spots for housing unaffordability nationwide.
The Housing Crisis in Las Vegas
Las Vegas continues to grapple with a housing crisis as both home prices and mortgage rates soar to near historic highs. This crisis is exacerbated by limited land available for development combined with an underproduction of new homes, making the local housing market inaccessible for many residents.
Adam Ducker, Chief Executive Officer for RCLCO, emphasized the severity of the underproduction issue. “We’re just not producing enough housing for the growth that we’re experiencing, which is true in most markets but particularly in high-growth markets including Las Vegas,” Ducker stated. This supply issue is a crucial aspect to address in mitigating the city’s affordability challenge.
The report also points out the daunting timeline for prospective homeowners in this market: a household earning the median income would require approximately 37.4 years to save sufficiently for a down payment on a home in the Las Vegas area.
Shortage of Affordable Housing
An additional facet driving the affordability issue is a significant shortage of affordable housing. According to data from the National Low Income Housing Coalition, Nevada currently faces a deficit of about 78,218 renter households for those classified as extremely low income, a shortfall that has been increasing since the onset of the COVID-19 pandemic.
Rosemarie Hepner, Vice President of the ULI Terwilliger Center for Housing, highlighted the challenges in funding affordable housing initiatives. Money for these projects often comes from a complex mix of federal, state, and local resources, each laden with various requirements and bureaucratic obstacles. Furthermore, many local residents resist the construction of affordable housing projects in their communities, fearing changes that such developments might bring.
Hepner elaborated, “Everything has gotten more expensive, and where you have those magnet cities and higher attraction points, the land is really expensive but you also have highly energized communities that don’t want them to change. There’s so many communities that are still not doing anything about it because they don’t want to see their communities change.”
The Future of Homebuilding
There is cautious optimism among real estate analysts that policy changes may stimulate more vigorous homebuilding efforts. A recent report by Redfin suggests an increase in home construction activities is anticipated for the coming year, potentially easing the scarcity crunch in the long term.
The expectation stems from a shift in the regulatory landscape, which may favor builders by reducing the burden of compliance and encouraging construction. However, it is noted that substantial impacts on affordability might take years to materialize, as the new construction gradually expands the available housing inventory.
In conclusion, while the current picture of Las Vegas’ housing market presents challenges primarily due to high costs and slow development rates, efforts to boost home production and tackle affordability are gaining focus. Addressing these issues effectively may pave the way for a more accessible housing market in the future.
