The American Nightmare: How housing became Las Vegas’ top issue
Juan José Nevárez and his wife, Graciela, moved to the U.S. nearly 40 years ago from Mexico looking for a better life. At one point, the couple owned two homes, renting one out as an investment property.
Then the 2008-09 Great Recession hit, and the value of their homes declined. After losing one income and enduring a rate increase on their adjustable mortgage, the couple found themselves unable to make the house payments. They said the banks were unforgiving and quickly foreclosed on both houses.
Their credit ratings bottomed out as a result, which meant trying to get back into the housing market in the following years was not feasible. Since then, the two have been renting a place in North Las Vegas, and Juan Nevárez said the prospect of trying to become homeowners again is unattainable. To put it bluntly, he said the American Dream is no more for them.
“It’s not a dream anymore, it’s a nightmare,” he said. “There are many people who think the U.S. is the dream, but in reality those of us who truly live here know it’s not a dream anymore.”
The Nevárezes, like many, were just starting to recover financially from the Great Recession when the COVID-19 pandemic hit. Historically low mortgage rates during that period led to a home-buying frenzy and higher housing prices. Many who want to re-enter the housing market now find themselves unable to afford it with mortgage rates hovering near 7 percent.
Rental and mortgage rates, home prices and home insurance have all gone up significantly. As a result, a great number of Americans are being squeezed by their biggest monthly expense in 2024, and it’s showing. And because of all of this, the rising cost of housing has become a major political issue this year.
Inflation and cost of living are the top election issues for Generation Z and millennials, according to a July poll conducted for U.S. News by Generation Lab that surveyed 2,040 young adults. Additionally, an Economist/YouGov poll, conducted Aug. 11-13, found 54 percent of voters said the most important issues to them this election year were “inflation/prices,” “jobs and the economy,” “immigration” and “taxes and government spending.”
David Damore, executive director of The Lincy Institute and Brookings Mountain West and a political science professor at UNLV, said the pandemic supercharged the issue of rising housing costs.
“This has really spiked as an issue coming out of COVID,” Damore said. “Whereas before COVID we were still sort of coming out of the Great Recession and housing prices were going up, but not at the rate they have been.”
Las Vegas finds itself in an even more precarious situation because of a lack of vacant, privately owned land. The federal government controls almost all of the open land in the valley, and the Bureau of Land Management has been slow to release it to developers for projects. When it does, it’s at a heightened cost and hampered by delays that are further compounded by local bureaucracies.
The lack of a housing stock that keeps up with population growth creates supply pressures that boost prices.
This has all invariably trickled down to average Las Vegas residents, who, according to recent data, can’t live in the valley without spending more than they should on housing — a monumental shift that has left the working class unable to afford adequate living spaces and less able to build wealth through home ownership.
From the top down
Before dropping out of the presidential race, President Joe Biden said lowering housing costs for Americans was a priority. His administration also announced hundreds of millions of dollars for affordable housing initiatives across the country.
Lawmakers including Rep. Steven Horsford, D-Nev., have spoken out against corporate investors, many backed by Wall Street hedge funds, buying much of the housing stock. Last year he introduced the Housing Oversight and Mitigation Act, which would curtail rent hikes, but the bill lacks bipartisan support.
A UNLV study estimates these investors could own more than 15 percent of the valley’s housing stock and 25 percent of the housing in North Las Vegas alone. Vice President Kamala Harris has since unveiled a six-point plan for housing if she is elected, and one of them is to push Congress to pass legislation that would limit key tax breaks for investors who buy large numbers of homes.
In Nevada, making more affordable housing available has bipartisan support.
This month, Republican Gov. Joe Lombardo attended the unveiling of a senior affordable housing project that will add 276 housing units and 238 apartments in Clark County.
Lombardo has twice written Biden asking for the federal government to release land to help alleviate the valley’s real estate crisis, which has pinched both commercial and residential construction.
At the event, Lombardo did not mince words: The valley is not in good shape when it comes to housing.
“We are woefully short,” he said in reference to an estimate the state needs at least 75,000 affordable housing units. Lombardo touched on two key terms in his speech: more available land for development and less red tape.
Pre-COVID to post new world
Redfin’s chief economist, Daryl Fairweather, said Las Vegas is not alone, as the entire country is dealing with the same issues. But it’s clearly heightened in the valley.
“In Las Vegas, the job market can be very volatile. Las Vegas had one of the biggest rises in unemployment during the pandemic, so the city tends to feel shocks from unemployment rises more acutely because of its dependence on tourism, which is very sensitive to how the economy is doing,” she said. “So Las Vegas in particular feels the swings of the economy and the swings of the housing market even more so than the rest of the country.”
Graciela and Juan Nevárez said the American Dream is gone, and in conversations with people back home in Mexico, they tell them things are better here, but have gotten worse since they left their home country.
Juan Nevárez said the math no longer adds up for buying a house in their neighborhood, and they are trying to come to grips with being permanent renters.
“They want basically $60,000 for a 20 percent down payment,” he said. “Where are we supposed to get $60,000 for a down payment if our pension is less than $2,000? How many years will we have to save up for that?”
At the end of the day, Graciela Nevárez said they are not striving to live luxurious lives or make tons of money, they just want to own something and feel safe financially after all they’ve been through.
“We don’t want a luxury house,” she said. “What we need is a house like this one we live in. But we can’t afford it, and we can’t say it’s ours.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com and Jimmy Romo at jromo@pvtimes.com.