Las Vegas Sun

April 22, 2019

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Housing analysts: 13 years worth of land left

Las Vegas housing analysts told a group of home builders Tuesday that there is less than two decades worth of land left for residential development.

"Where that expansion will happen, for the most part is the northwest, south and south of Summerlin," Richard Lee, vice president of First American Title said.

Lee and Dennis Smith, president of Home Builders Research Inc., presented their analysis of the Las Vegas housing market to about 500 home builders, lenders and government officials Tuesday.

Smith said one question he and Lee wanted to answer was how much total undeveloped land is left for a builder wanting to build a typical subdivision.

The answer: With an absorption rate of 5,000 to 6,000 acres a year, about 13 years worth of land is remaining for residential development.

Lee said that number was found by taking the total land in the Bureau of Land Management disposal area, about 327,300 acres, and subtracting developed land, non-residential land, land with a slope greater than 10 percent, and land designated for rural preservation.

The current Las Vegas Valley and the BLM "disposal boundary" can be loosely defined as the boundary created by the mountains surrounding Las Vegas.

"We don't want to stop growth, but how we manage it will define Las Vegas over the next 10 years," he said.

The effect of dwindling land supplies will keep the price of land up and affordable housing scarce, Lee said.

Lee defined affordable housing as a home $150,000 or less.

"That's why the pressure is there to get zone changes for (Cooperative Management Area) land and for more dense housing," he said.

The Cooperative Management Area, or CMA, is land designated by McCarran International Airport as unsuitable for neighborhood development because it is below noisy flight paths.

Land prices aren't likely to go down because the BLM doesn't release land for development fast enough to meet demand, Smith said.

"It just takes too long to process," he said. "Instead of a little here, a little there, we need one big hunk at once."

When land designated for development gets closed to being used up, the BLM will likely move out the boundary again, Smith said.

"We will run out of land (in 13 years) based on what we have," he said. "The BLM has a lot out there that they can add."

Development can likely continue west, north and south of Las Vegas as long as the BLM releases the land and as long as municipalities put together development plans, Smith said.

But there are some issues hindering growth such as the mountains, a proposed airport in the south and water resources.

"Do we have enough water to develop any new lands that are released by the BLM is an issue," Smith said. "The answer is we will if people are willing to conserve."

Lee said there will be so many constraints on future land released by the BLM outside the current disposal boundary that it will never make a difference in land prices.

Lee told the audience of home builders that they should start planning mid- to high-rise living in Las Vegas.

"The only alternative is to learn to deal with higher priced land and for us to go up," he said. "We will go up, it will be the Manhattanization of Las Vegas."

Last year Lee and Smith estimated land available for residential use in the Las Vegas Valley would last about 10 to 12 years.

That analysis include the additional 24,000 acres added by the federal government in November to the BLM's 303,000 acres slated for future release, Lee said.

Better numbers from government agencies and a clearer picture of what is and isn't available for residential use contributed to the similar number, Lee said.

Smith also told the group that he expects 2003 to be a record year for new home sales, with 23,000 new homes to be sold locally.

The hot spot for builders in 2003 will be North Las Vegas, with the Aliante master-planned community coming online, Smith said.