Monday, Jan. 22, 2007 | 7:12 a.m.
When North Las Vegas' newest master-planned community starts filling in 2008, it will resemble other developments, with its parks, schools and corner grocery stores.
But there will be something missing in Park Highlands' neighborhoods: "For Rent" signs.
That's because North Las Vegas inserted a clause in its agreement with developer Olympia Group that prohibits house, condo and town house owners from renting their properties for the first 24 months. The same curb on rentals will be included in the covenants, conditions and restrictions of the homeowners association. Only apartments can be rented.
Triggering the restriction is the concern that rental homes can sit vacant and aren't as well maintained as owner-occupied homes.
"The people who live there day to day have to suffer the consequences," said North Las Vegas Councilman William Robinson. "It leads to depreciation. It also creates problems with renters who have moved, and you have an empty home sitting there for six months. You worry about vandalism, and it creates an eyesore in our community."
Henderson, Las Vegas and Clark County do not have similar restrictions.
A Nevada Supreme Court ruling in 2006 said homeowners associations can't retroactively impose no-rental rules once properties have been sold by developers, unless unanimously approved by the association's members.
But builders can put such a rule into place before homes are sold.
Olympia Group partner Guy Inzalaco said North Las Vegas' no-rentals clause is a reaction to the number of investors in the marketplace over the years.
He said builders in North Las Vegas are concerned that the new restrictions will place sales obstacles in their way that they don't face elsewhere. But conversely, he said, there are some positives about the 24-month no-renter stipulation.
"It creates a healthier community knowing that the people buying are going to be living there," Inzalaco said. "You are trying to create a sense of community and that people living there actually have a stake in the community."
Some builders wouldn't sell homes to investors in 2004 and 2005 when there was a frenzy of buying, said Richard Lee, vice president of First American Title, and North Las Vegas' move is a reaction to when there were more investors in the marketplace than there are today.
Builders were concerned that too many investors were buying homes and then reselling them and competing against them. Others, however, say investors create a much-needed buzz in the market to stimulate sales when a community is launched, Lee said.
No similar restrictions exist in Henderson, where Focus Property Group is starting construction on its Inspirada master-planned community. Focus partner Andy Flaherty said the North Las Vegas restriction is triggered by lower home prices there.
"Homes in North Las Vegas have more for-rent signs because investors look for lower-priced homes that are more attractive to rent for cash flow," he said.
Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, said the rental restrictions will have serious consequences for renters.
"This constricts the supply of rental property, which means rental prices will rise," she said.
Dennis Smith, president of HomeBuilders Research, said the restrictions are a mixed bag - calling it extreme but beneficial for homeowners who don't want renters in their neighborhood. It could attract buyers who realize there won't be any speculators, but that will be offset by keeping investors away, he said.
Clark County has no plans to follow North Las Vegas' lead and restrict rentals in its new subdivisions, County Planning Manager Chuck Pulsipher said.
"We generally don't interfere with the ability to own and sell property," Pulsipher said. "They can use it as they see fit. We are concerned about land use and compatible uses. So long as they are using it as it was designed for, we are not concerned about things like that."
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