With Las Vegas largely at a standstill over fears of the new coronavirus, the real estate market is bound to take a hit. But for now, construction is still chugging along.
Gov. Steve Sisolak, in ordering casinos and other businesses closed to help contain the virus’s spread, deemed homebuilding and other construction “essential” lines of work alongside hospitals, grocery stores and others last week. Nevada is one of many states to allow construction during the pandemic, and public health experts told me job sites can be operated safely amid the outbreak if extra precautions are taken.
Sisolak’s office did not say this week whether he is thinking of shutting down construction following news that a worker at the $2 billion Allegiant Stadium and one at the $4.3 billion Resorts World Las Vegas project both tested positive for COVID-19, the respiratory disease caused by the virus.
If he pulls the plug, it would deal another blow to an already-reeling economy, but it wouldn’t be the first time development went dark in Southern Nevada.
A decade ago or so, construction largely ground to a halt after Las Vegas’ frenzied mid-2000s bubble burst. The industry shed tens of thousands of jobs as Southern Nevada became littered with abandoned, partially built projects and vacant plots where grand plans fizzled.
“Everywhere you went, there was a reminder that the economy was stalled,” said longtime valley resident Stefani Evans, a project manager with UNLV’s Oral History Research Center who ran its “Building Las Vegas” project a few years ago.
The Great Recession was different from today’s chaos. Sloppy mortgage lending had fueled a run-up in real estate prices and development, and when the market crashed, it helped topple the economy. Las Vegas was arguably the hardest-hit area of the nation, marked by sweeping foreclosures, plunging property values and other woes.
The fall was fast, but it didn’t happen overnight, as the economy had been showing cracks for a year or two before it fell apart.
By comparison, Las Vegas’ economy was on strong footing just a few weeks ago when the valley and much of the country started shutting down as coronavirus infections and deaths mounted.
The Strip, Las Vegas’ financial lifeblood, has emptied out, and job losses are skyrocketing. The state received nearly 92,300 unemployment insurance claims for the week ending March 21 — the most in Nevada history and up more than 1,350 percent from the previous week.
Las Vegas began 2020 with billions of dollars’ worth of real estate projects underway. Statewide, construction employed an estimated 97,800 people as of January, making up almost 7 percent of the labor market, according to the Nevada Department of Employment, Training and Rehabilitation.
At least one major project has shelved construction activity amid the coronavirus turmoil. Drew Las Vegas owner Steve Witkoff’s namesake firm said this month it “paused construction crews” from coming on-site at the north Strip hotel-casino – the former Fontainebleau – and asked corporate employees to work from home.
UNLV’s Evans noted the coronavirus has attacked people’s health, the economy and “every aspect” of our lives. Also, people didn’t worry about their health during the recession unless they lost their job and insurance, she said.
Today, she added, “it’s a totally different fear.”