Where I Stand — Brian Greenspun: Can dream survive?

Saturday, Nov. 13, 2004 | 12:19 p.m.

Brian Greenspun is editor of the Las Vegas Sun.

WEEKEND EDITION

November 13 - 14, 2004

The new Las Vegas, gambling on the American Dream.

Everyone knows the incredible story of Las Vegas. How it grew from a Union Pacific whistle-stop to the gambling and entertainment mecca of the world in barely half a century.

That story includes some of the wildest success stories on the planet and some of the wildest stories. Period. And throughout our city's rise to the top of the All-American city heap, there was always the wondrous, yet untold, part of the story. We were not only the most affordable place in the country to vacation, we were also one of the most affordable cities in which to live.

That is why the grand experiment worked so well for so long. A basically service- oriented industry could afford to keep prices down and value high for those who visited our city because the people who worked within the industry could afford to live here in a manner they could only dream about. It was an American Dream come true.

We all know that nothing stays the same forever, and that is true of Las Vegas in the 21st century. With MGM Mirage's announcement this past week of a multibillion-dollar city within a city on the Las Vegas Strip, it is abundantly clear that whatever we are doing in this town, we are continuing to do it right. Even though it is very different from what Las Vegas used to be.

Inexpensive rooms and moderately priced meals and shows can still be found in Las Vegas for the value-conscious tourist, but that is no longer what drives the engine of this town. With hotels costing in the billions, restaurants serving food comparable to or better than the best in the world, retail stores we only read about just two decades ago climbing over one another to make sure they are represented here, and entertainment opportunities without peer, the cost of Las Vegas has gone up. And the people who come here have shown no unwillingness to pay for what they still believe is one of the best vacation values in the world.

That's the good news. The bad news is the kind of stories we read about like the one headlined, "Fewer in LV can afford to buy home." That story in Thursday's Las Vegas Sun told of our teachers, hotel workers and nurses who could no longer afford to buy a home in what was just a year or two ago one of the most affordable cities in America. It is good news, to be sure, for those of us who already own homes, because we have realized incredible appreciation in what for most people is their single largest asset. But for those who are new to Las Vegas, that would be some 5,000 people each and every month, the cost to buy into the Las Vegas dream has skyrocketed.

In the second half of 2004, 24 percent of Las Vegans could afford to buy a new home. That is down from 40 percent just one year ago. And that number keeps shrinking. According to Jennifer Shubinski's story, a median new home in Las Vegas requires a minimum annual income of almost $80,000! Now, I know that the bulk of the working people in this city are doing pretty well, but clearly not that well. And that means that as prices continue to move upward and incomes stay flat or tick up slightly, fewer and fewer people will be able to have a house they can call home.

For a very long time, the population of Las Vegas grew mainly from Southern California. People would sell their homes down there for enormous profits, buy brand new and much larger homes in Las Vegas for a fraction of the price, and live very comfortably on the balance, which they put in the bank and used to enjoy the benefits of our city. That is no longer happening, as our home prices keep rising, making the value proposition far less attractive.

But forget about those who move here tomorrow. What about all of our citizens who are here today, performing the important jobs that make our industry work, our schools function better and keep our health services growing to meet the needs of this burgeoning society? The answer seems to be that for them the American Dream will remain elusive. Simply put, those who could afford to buy a home yesterday can no longer do so.

I don't know what the answer is, because it is not a simple one. There is a lot that has to do with supply and demand. After all, the Bureau of Land Management releases relatively small amounts of land in the face of an ever-growing demand. And since federal land is the only readily available land in this city, until the government matches supply with our demand, prices will continue to go up. And Las Vegas is not like many others that can create affordable housing if people are willing to drive far enough to get it.

In Los Angeles, for example, people drive an hour or two each way so that they can live in affordable housing. Try driving an hour or two outside of Las Vegas. I suppose people can find very affordable housing in Baker, Calif., but do we really want the people we rely on in Las Vegas to have to make that drive every day?

One answer is moving on up. High-rise condominiums may provide an answer. People will have to give up the front and back yards, the 2,000-plus-square- foot homes and the relative privacy afforded by detached home living, but they will be able to own a small piece of a very high-rising dream. Another answer may be the emergence of places like Pahrump -- finally -- even though the time to get there and back is not something anyone around here is eager to experience.

A third answer, of course, is not a very palatable one. That would mean that employers would significantly increase the incomes of their employees. That might help in the short run but, ultimately, prices would go up and we would be in the same mess we find ourselves today. Like I said, I don't see any easy answers.

Las Vegas -- short of a disaster caused by the Yucca Mountain nuclear waste dump that would stop growth and solve the problem overnight -- is going to keep growing. MGM Mirage's latest announcement is just the first in what will be the next phase of this incredible growth story.

MGM Mirage and those companies that will build after them know the stakes are high if they cannot encourage the right kind of employees to move here to give life to their billion-dollar imaginations. And the answers they and all of us come up with will determine whether Las Vegas continues to be the place where dreams are not only fulfilled but also lived every day.