EDITORIAL: Supply, demand triumph again in housing market

In what will certainly come as a shock to Nevada’s legislative Democrats, rents have stabilized in the Las Vegas area largely because of the construction of more apartments. Funny how that works.

Data from Zumper, a digital marketplace for renters and property managers, reveals that rental costs have dropped in some parts of Las Vegas. In Spring Valley, for instance, the price of an average one-bedroom apartment at the end of May was $1,380, down 2.1 percent from a year earlier.

“Our inventory data shows that the number of monthly active listings” in Spring Valley “has increased by about 10 percent since 2023,” Crystal Chen, a spokeswoman for Zumper, told Review-Journal reporter Patrick Blennerhassett. “This additional supply is likely helping to balance out demand, easing competition and placing downward pressure on prices.”

Even in more expensive parts of the Las Vegas area, it’s a renter’s market. The price for a one-bedroom apartment in Henderson increased just 1.3 percent over the previous year to $1,570, Zumper reported. Two-bedroom rates fell 0.6 percent to $1,770.

These local trends are mirrored elsewhere. Redfin reports that rents are decreasing in major metropolitan areas across the country. Nationally, median rental prices dropped 1 percent in May when compared with a year previous. Again, the relief can be traced to increased supply.

“Apartment construction in America has been hovering near a 50-year high,” said Redfin senior economist Sheharyar Bokhari, “and even though renter demand is strong, it’s not keeping pace with supply. Many units are sitting vacant for months, which means renters have power to negotiate concessions and landlords have less leeway to keep rents high.”

Yet in recent years, Democrats in the Legislature, who have healthy majorities in both houses, have ignored the power of supply and demand and instead shackled themselves to hidebound progressive nostrums such as rent control and increased red tape for landlords as a means of addressing the state’s housing affordability “crisis.” Just weeks ago, Republican Gov. Joe Lombard once again vetoed a series of bills that would imposed such unhelpful interventions in the Nevada marketplace, all of which would have exacerbated the problem by discouraging investment in new housing stock.

The veto was the right move.

Constraining supply and burdening developers and landlords will have a predictable effect on prices. So will relaxing barriers to building more housing. The only mystery is why the Democrats running the show in Carson City continue to reject the obvious.