Nevada lawmakers kill bill to limit corporate home buys for rentals

By a single vote, Nevada legislators spared the governor a second time from having to veto a measure that would cap the annual number of residential properties firms could buy and rent out as homes.​

During a special session, the failed legislation would have given Democratic lawmakers the required supermajority to cap corporate homebuying at 1,000 houses per year.

Republican Gov. Joe Lombardo vetoed a similar bill two years ago.​

The latest bill was a last-ditch effort after a proposal to cap corporate purchases of homes at 100 houses annually failed earlier this year. Senate Bill 10 was not initially included on the special session agenda Lombardo called, but was squeezed in as part of a bipartisan effort. The Nevada state legislature meets biennially and is not scheduled to meet for a regular session again until 2027.​

Though the bill failed, its introduction highlights the growing intensity of a nationwide debate over institutional investor ownership of build-to-rent and single-family rentals, which may impact housing affordability and accessibility.​

Supporters say build-to-rent projects add to residential rental supply, stabilize communities, and upgrade distressed housing stock. They argue these projects give families more choices when ownership is out of reach and can boost nearby values.​

Many housing advocates and lawmakers, however, frame large-scale investor ownership as a direct threat to affordability and neighborhood stability. Critics argue that institutional buyers often outbid owner-occupier households for starter homes and then return those properties to the market with higher rents.​

Nevada Republican State Sen. Ira Hansen, who has supported legislation to curb corporations’ ownership levels, echoed that sentiment, explaining that he was voting against SB 10 at the governor’s request.​

Hansen said in a floor speech that potential homebuyers frequently lose to hedge funds when buying.​

“When you lose them, you are forced to rent from the hedge fund,” he added.​

His wife, Alexis, a Nevada Assembly member, cast the deciding vote against the bill even after having signed to have it considered during the special session.

Nevada’s rising home rental market

A report by UNLV’s Lied Center for Real Estate found that corporate investors bought 23% of the listed homes last year in the Las Vegas area. It ranks fourth among the largest U.S. metropolitan areas that report tracked, behind Miami and California cities Anaheim and San Diego.​

Las Vegas has been a target market for investor homebuyers for several years. Corporate homebuying activity in the area peaked in 2022 at 29%, according to the UNLV report.​

Like many markets nationwide, home prices in Las Vegas increased substantially during the COVID-19 pandemic. New home construction surged as well, but it never reached levels anywhere close to those before 2008.​

Las Vegas has a housing shortage of 58,100 homes, according to a September report by the American Enterprise Institute and the U.S. Chamber of Commerce.​

The median home price climbed from about $300,000 to a high of $459,000 in June, a 50% increase, according to Redfin. It decreased to $440,000 in October. Median household income did not keep pace.​

Researchers have determined that institutional investor activity can drive nearby prices higher, worsening affordability for lower-income renters and buyers. However, the impact varies by market and period.​

During the Great Financial Crisis, investors helped stabilize neighborhoods and distressed housing markets recover, researchers with the St. Louis Federal Reserve wrote in an October report.​​

“As home values rose through the 2010s, the same effect worsened housing affordability, especially for low-priced homes that typically would be bought by first-time homeowners,” their report noted.​​

Compete instead of ban

Cities, states, and federal officials increasingly challenge hedge fund and private equity ownership of single-family homes.​​

California lawmakers introduced legislation this year to limit corporate homebuying, but the bills stalled. Minnesota unsuccessfully tried last year.​​

When Lombardo vetoed Nevada’s 2023 bill, he said it would have “likely worsen Nevada’s current struggles in ensuring residential availability.”​

Some cities have taken steps to compete with institutional investors by scooping up properties before those buyers can acquire them.​​

Minneapolis last year launched the Single-Family Investor-Ownership Intervention Pilot. The program helps a land bank and mission-driven buyers acquire investor-owned homes. Instead of renting them, they resell the homes to lower-income owner-occupants.​​

In Cincinnati, the development authority bought 194 homes four years ago from a failed investment firm to convert them into affordable rentals and create ownership opportunities. The CARE Homes Initiative made the move so that an institutional investor could not buy the homes, fix them up, and turn them into rentals.​​

The group is doing the work itself and has sold nearly 50 of those homes for an average price of $150,000. The effort is taking longer than expected because the homes were in such poor shape.​​

Next for Nevada corporate homebuying cap

After the special session defeat, lawmakers pledge to press the issue again in 2027. The governor’s race may be a meaningful factor.

Lombardo has already said he’s running for reelection. He narrowly beat the incumbent Democrat in 2022 with less than 50% of the vote.

Democrats control the Assembly and the Senate. All Assembly members and 11 of the 21 senators will be up for election next year. If Democrats hold their seats but flip one Republican seat, they would be able to override a veto should Lombardo win again.

However, a Lombardo loss increases the odds that a bill would not be vetoed, and Republicans who have supported the cap will vote for it.

Lawmakers can keep gambling that hedge funds will build enough rentals to ease the crunch, or they can rewrite the rules so local buyers have a real shot at ownership.

Instead of fighting the politics, city and state leaders could take up what AEI and the U.S. Chamber of Commerce have been promoting to ease the ability to build, as other states and cities have pursued.

Their “Strong Foundations” playbook for Las Vegas suggests increasing lot-size flexibility in new subdivisions to encourage starter single-family homes and townhomes. That alone could add 7,800 additional single-family homes annually that would sell below the median home price.

Another option would be to allow duplexes, triplexes, and other multiplexes—examples of so-called “missing middle” housing.

What happens next will test whether Nevada voters and their elected state lawmakers treat housing as a wealth-building ladder for residents or a permanent asset class for Wall Street.