Geoffrey Lawrence is the director of research at Nevada Policy, where Anahit Baghshetsyan is an analyst.
Louis Koorndyk is fighting two battles.
One is against cancer. The other is against Nevada’s largest and most powerful county commission.
Like thousands of Nevada homeowners, Koorndyk relies on supplemental income from his rental property. Yet, after the Clark County Commission enacted its licensing system for short-term rentals in 2022, he found himself facing fines for operating without a license. Because Koorndyk is a retiree, his two rental properties are crucial to his finances — and his health. “I have Stage 4 cancer, and this is really helping with affording my treatments,” he told local reporters.
The Silver State has become a poster child for overregulating short-term rentals. Koorndyk is one of many Nevadans who have found themselves in a fight with their local government over whether they can legally rent properties.
Nevada lawmakers have long sought to protect large hotels from competition, including from locals seeking to take advantage of the stream of tourists visiting Sin City’s casinos and music halls. In 1998, Clark County — the home of Las Vegas — outlawed short-term rentals in unincorporated areas. More than 40 percent of Clark County residents live in unincorporated land, which encompasses much of the Las Vegas Valley, including the famous resorts on the Strip.
Many homeowners defied the ban, due to growing demand and limited enforcement by county officials. Online platforms like Airbnb and Vrbo do not make exact addresses of each rental publicly available and did not take listings in the county off their platforms, making the ban difficult to enforce. In an attempt to crack down, the county went so far as to pay investigators to visit properties that prompted complaints during holiday weekends.
State lawmakers took action in 2021 by requiring Clark County to create a regulatory framework for legalizing short-term rentals. The following year, the county published a licensure pathway, but the new framework functions as a ban in all but name.
Unlicensed rental owners could risk liens and fines of up to $10,000 per day. Residents were limited to one license per person in unincorporated areas, became subject to county inspection without notice and could face criminal liability for misplaced trash or on-street parking. Rentals could not be within 2,500 feet of a hotel, and there could be no more than one within any 1,000-foot radius. The new rules also required platforms like Airbnb to delist properties operating without a license.
There are more than 13,000 Airbnb listings in Clark County. As of May, the county has issued only 220 active permits and more than 300 have been denied. That leaves at least 12,000 properties in legal limbo.
The Greater Las Vegas Short-Term Rental Association, co-founded by Koorndyk, challenged the constitutionality of the county’s licensing regime in federal court along with Airbnb. In December, District Judge Miranda Du issued a temporary injunction preventing Clark County from enacting any additional measures or requiring Airbnb to remove unlicensed listings. Dufound substantial evidence that the licensing scheme violated the 14th Amendment’s provision that no state may “deprive any person of life, liberty, or property, without due process of law.” Homeowners have a right to use their property, and regulators cannot impose restrictions that are unworkable. Du also issued an injunction s that platforms like Airbnb can’t be forced to regulate third-party content on their website. The Clark County Commission voted unanimously to appeal the ruling.
Nevada’s relentless effort to overregulate the short-term rental market is not confined to Clark County. Officials in Carson City, the state capital, spent months designing an even more burdensome short-term-rental ordinance. Approved in May, the new rules require a public hearing and extensive operational requirements for every homeowner seeking to rent properties short-term.
Operators must navigate neighbor-notification requirements, occupancy restrictions and a growing list of other administrative obligations. Properties will also be subject to an 8 percent property tax, instead of the 3 percent residential rate, as well as a room-rental tax. Moreover, homeowners must apply for a business license and an administrative permit before they can rent their property for a single night.
Short-term rentals are not some runaway nuisance in Carson City. Staff from the city’s planning commission were able to identify only a few dozen rental units within city boundaries.
Both Clark County and Carson City have created licensing systems that regulate Nevadans out of their property rights. This imparts a broader lesson about how governments create administrative complexities to achieve goals with special interests in mind: They don’t have to ban an activity outright if they can create enough hurdles, costs and uncertainty to discourage participation.
Short-term rentals happen to be the target today. Before that, it was at-home day care. Tomorrow it could be home-based businesses or mom-and-pop restaurants. Americans rely on small entrepreneurship not as a hobby but as a source of income and economic security. Local government should be lowering barriers for entrepreneurs like Koorndyk, not erecting more of them.
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