Wednesday, Nov. 2, 2005 | 6:56 a.m.
Rising prices for single-family homes are leading many people who prefer owning over renting to buy less expensive condominiums. And a lot of people today prefer condominiums anyway. Many are comparable in square footage to smaller detached homes, expenses for upkeep of common areas are shared and often there are amenities such as swimming pools and exercise rooms.
When it comes time to sell, a condo's value will likely have appreciated commensurate with rising home values, and the owner can take away some equity.
For these and other reasons, the popularity of moderately priced condominiums in the Las Vegas Valley has been increasing over the past several years -- and not just among buyers. Apartment owners have seen the trend and have been getting approval from local governments to convert their rental units into condominiums. They see this as a way of maximizing the value of their properties.
Because apartments are generally located in areas zoned for condos, approvals for the conversions have been issued with little controversy.
Las Vegas, for example, has approved 20 conversion applications over the past two years. But now the City Council is beginning to realize the social cost of such approvals. During those two years, 7,029 apartments were either converted or received permission to convert. That is nearly 12 percent of the city's estimated 59,000 apartments.
The City Council fears what will happen if conversions continue at this rate: With supply short, demand for apartments will increase. Rents will increase with demand, and soon there will be few moderately priced places left to live in the city.
The concern is legitimate. But we believe a possible solution on the agenda for discussion at this morning's council meeting is off base. The council will consider whether to impose a six-month moratorium on approving apartment-to-condo conversions. During the six months, the council would consider new rules that it could impose on the owners of apartment buildings, such as requiring them to obtain a special-use permit if they want to convert their apartments to condos.
This would give the council more authority to deny a conversion. Now, a conversion is generally denied only if it would not meet various city codes. A special-use permit could be denied if the council decided it would not be good for the community.
In our view, a lack of affordable housing is a problem that the city should solve without denying an owner rightful use of his property. In the case of a special-use permit being denied, an apartment owner would have a good argument under the Fifth Amendment that the value of his property was diminished without just compensation.
Affordable housing is developed through efficient use of federal grants, local incentives to builders, the purchase of federal land at below-market cost and even city-backed bond issues.
We believe these are methods that should be discussed long before any proposal to force apartment owners to alone sacrifice private income for the greater good of the community.
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