Culinary Union backs statewide rent caps bill after concept falters in North Las Vegas

10 April 2023

After a failed North Las Vegas rent control ballot initiative, the politically powerful Culinary Union vowed to bring the discussion about capping rents to the Legislature.

They fulfilled that promise on Friday with a hearing for SB426.

The measure, sponsored by Sen. Pat Spearman (D-North Las Vegas), would tie rent increases to the annual cost of living or the Consumer Price Index increase for the region, ensuring they do not exceed 5 percent and requiring a 90-day notice for rent increases given to existing tenants. 

“It is our responsibility as leaders to come together and find a solution to keep rents at a reasonable cost so that all Nevada residents have the opportunity to thrive,” Spearman said during the Friday hearing. 

More than 50 Culinary members and other community members testified in support of the measure, citing out-of-reach rental rates during a challenging economic environment.

“I’ve moved six times in the last five years, because every time that I renew my lease, the rent goes up. And I don’t mean by $40 or $50, I mean $400 to $500,” Democratic Socialists of America member Val Thompson said during the public comment period. “That’s every year since the pandemic. I live in constant fear that this next lease is going to be the one that locks me out of the rental market forever.”

The proposal originated in May of last year, when the Culinary Union launched a ballot initiative to cap rent increases in North Las Vegas, following what leaders described as unrelenting price hikes and wage stagnation in Southern Nevada. But the city rejected the measure, citing an insufficient number of valid signatures, and said that the proposed ordinance contains differences in phrasing and style from the original petition, making it invalid. 

The campaign from the Culinary Union marked the first organized effort to implement rent caps in Nevada since the 1970s, when, in the wake of a housing shortage, high inflation and mobile home rental hikes, advocates pushed local governments and state lawmakers to take up the issue of rent control. But state law is unclear about who has the authority to implement such policies.

As proposed, the measure before the Legislature only applies during a tenancy and would not carry over between tenants. It would also exempt small businesses, so-called “mom-and-pop” landlords and units constructed within the last 15 years. An amendment to the bill indicates that the “mom-and-pop” term refers to landlords who only own one dwelling unit, landlords providing reduced rent to a tenant through a government program and owner-occupied units up to a fourplex (a multifamily home typically designed to house four separate families under one roof). 

Sen. Jeff Stone (R-Henderson) pushed back on the legislation, saying that though tenants had a rough time since the pandemic, landlords “really had a rough time.” As a landlord, Stone said he’s always tried to ensure tenants do not lose their housing because of a rent increase.

“I’ve always considered myself a compassionate landlord,” Stone said. “It seems like the corporate landlords are the most egregious … about increasing rents because they have shareholders that they have to respond to.”

Stone questioned the bill’s inclusion of exemptions for new construction that he said would inevitably result in higher rent prices overall. He said the exemptions apply to more prominent builders because proponents of the bill wanted to avoid having them opposed to the bill.

“To me, this creates an unequal playing field for smaller investors that are going to have caps on their rent increases, not to exceed 5 percent, even though you may have an inflationary factor of 8.5 percent,” Stone said.

Stone also raised concerns about the bill’s potential to result in less maintenance of properties and disinvestment in the housing stock.

Edward Goetz, a professor of Urban Regional Planning at the University of Minnesota and the director of the university’s Center for Urban and Regional Affairs, helped co-present the bill. He said studies in multiple states show that there is rarely any evidence that new housing construction falters in the presence of rent caps similar to the one proposed in SB426.

He also said there is some evidence that minor or more aesthetic maintenance will suffer after adopting rent caps. However, a study in New Jersey showed no significant declines in investment levels or housing quality.

The only study that linked rent caps to significantly affecting the decline of housing was a study of New York City, Goetz said. It was restricted to rent-controlled units, which had a very hard cap on them, he added, noting that’s unlike the types of rent stabilization programs that exist around the country and the type proposed under Spearman’s bill.

He added that an exemption for new construction exists in every rent stabilization program in the United States.

“As to the fairness of it, I think that’s an issue that is resolved locally,” Goetz said. “These exemptions exist so as to not disincentivize the new construction of housing because, of course, the overall supply is an important concern, as well.”

Spearman’s bill is not the only measure looking to address the issue of rising rent this legislative session. AB362, sponsored by Assemblywoman Clara Thomas (D-North Las Vegas) has language similar to what’s proposed under Spearman’s bill but has not yet received a committee hearing. 

Assemblywoman Sandra Jauregui (D-Las Vegas) also has a broader piece of housing legislation, AB298, that would prohibit a landlord from increasing rent by more than 10 percent when renewing a lease with an existing tenant, among other changes.

A third measure, SB371, is sponsored by the Senate Committee on Government Affairs and seeks to clarify state law surrounding which jurisdictions have the authority to implement rent control. The bill is scheduled for its first hearing on Wednesday.

Leaders in the Assembly and Senate have indicated split support for the possibility of rent control, with Speaker Assemblyman Steve Yeager (D-Las Vegas) saying he supports stabilizing rent prices for seniors and vulnerable populations on fixed incomes but not a blanket policy. Republican leadership opposed the idea of a statewide policy for capping rent prices.

While on the campaign trail, Gov. Joe Lombardo, a Republican, said he would “consider” rent control policies in an interview with The Nevada Independent but later walked back that statement in a debate during the primary. 

During the debate, Lombardo said the next governor needed to focus on making Nevada “conducive for companies” by providing a stable tax base and adequate affordable housing — something he said would be accomplished not by rent control, but by increasing tax credits to builders for constructing low-income housing.

In an email, a spokesperson for the governor’s office said the governor has no further comment on the issue of rent control or rent caps.

The post Culinary Union backs statewide rent caps bill after concept falters in North Las Vegas appeared first on The Nevada Independent.

Need help?

Please use the contact form to get support. Thank you.