Bob Shemeligian: Rent hike forces tenant from home

Monday, March 25, 1996 | 11:59 a.m.

GRACE is 84 years young, lives on a fixed income and is one of the nicest people I've met in Las Vegas.

So, you can imagine my concern and frustration when she called to tell me that the apartment complex where she lives in southeast Las Vegas is jacking up her monthly rent $30 beginning April 1.

"It goes up every year," Grace said. "At this rate, I'm going to be paying $1,000 a month by the year 2,000."

All throughout the valley, it's the same story as complexes raise monthly rents each year.

"I guess I shouldn't complain," Grace said. "My neighbor lives in a two-bedroom apartment. Her rent is going up $50. And I know of others that are going up $70."

A decade ago, one could find a decent two-bedroom apartment for $450 a month. Today, it's hard to find a studio apartment for that much.

And as far as luxury apartments go, forget about paying anything under $650 or $700 a month.

"At the high end of the market, it's not unusual to pay $1,000 a month," said Michael Belnick, a real estate broker and a member of the board of directors of the Nevada Apartment Association.

Why are rents going up so much?

"It's called the law of supply and demand," Belnick said.

In simple terms, the supply of apartments has remained relatively fixed in recent years, and demand increases every month as thousands more move to Las Vegas seeking jobs and a favorable climate.

"You have to balance everything with economic factors," Belnick said. "We're looking at 40,000 more hotel rooms (by the year 2,000) and 100,000 new jobs. That means we're pretty well going to be an active economy for the next five years."

In active economies, rents tend to increase.

Belnick noted that another factor causing many local landlords to raise rents is the recent increase in the cost of doing business.

"All costs are going up," Belnick said. "Water rates went up 20 or 30 percent in January, and rents have to go up to give the landlord a decent return on his investment."

One thing that might help stabilize rents in the near future is the development of new apartment complexes.

"We have approximately 124,000 apartments in Clark County," Belnick said. "We're expecting to see another 8,500 to 9,000 units this year."

The construction of new apartments translate to an increase in supply and -- renters hope -- a decrease in demand, and stabilized rents.

But they shouldn't get their hopes up too high.

After all, what's 9,000 new apartments compared with more than 5,000 residents moving into Clark County every month?

True, some of these people will purchase new homes, but many more are families who have loaded up the U-Haul with all their belongings and have scrimped and saved just enough to rent an apartment.

What good news can we offer to these people so that they will not have to endure rent increases as high as 10 percent each year?

The possibility of rent control?

Fat chance.

"It's not even contemplated in this area," Belnick said. "We have a well-balanced economy in this area with a lot of growth. With rent control, you're looking at a tight market without a lot of growth."

In Clark County, the turnover rate for apartments is 100 percent, which is significantly higher than the national average.

This means that an owner of a four-plex will average four vacancies each year. And the owner of a 100-unit complex will average 100 vacancies each year.

The vacant apartments are rapidly filled, which helps to account for the area's occupancy rate of 95 percent.

But still, a vacant apartment for any length of time always means more work and more expenditure on the part of the landlord and less income.

The apartment must be cleaned. Often it must be painted. Sometimes, the rugs have to be changed.

So it stands to reason that a landlord who goes out of his way to keep a good tenant happy will also make life easier for himself.

Which brings us back to Grace, who has lived in her southeast Las Vegas complex for several years.

"I never give them any trouble. I always pay my rent on time. I thought I was a good tenant."

Grace uses the past tense to describe her tenancy, because next week she plans to serve the manager of her complex notice that she will move in 30 days.

"I've got so much stuff to move. There's so much packing to do. But it's worth it," Grace said. "I've already found another place."

One wonders if the manager of Grace's complex also will think it's worth it to lose a good tenant, to clean and paint the apartment, and to take a chance on an unknown tenant -- all for the sake of a $30 monthly rent increase.