Geoffrey Lawrence is the director of research at Nevada Policy, where Anahit Baghshetsyan is an analyst.
Jeffrey Hagen has built a career over two decades as a licensed architect in California. When a longtime client asked Hagen to draw some plans for a potential remodel of a home across state lines in Nevada, the architect jumped at the opportunity, describing it as the “simplest thing” he has been tasked with in his career.
The client, satisfied with the designs, asked Hagen to move the project forward into the permitting phase. Hagen then submitted the plans to Las Vegas’s building department, clearly indicating that he held a California architectural license. Two weeks later, Hagen applied to the Nevada State Board of Architecture, Interior Design and Residential Design for out-of-state licensure reciprocity. However, the board charged Hagen with practicing architecture without a Nevada license because he had submitted his designs before filing for reciprocity. It offered him a chance to settle the matter with a $2,300 fine, but only if he admitted criminal guilt.
Hagen refused to admit criminal guilt, so the architecture board held an administrative hearing overseen by its members and legal counsel. If you can have an in-house judge and in-house experts, why bother with a jury?
The architect was found guilty. He was fined more than $29,610 in total — including a reimbursement to the board for its attorney fees, a fine for practicing without a license and another fine for pretending to be a Nevada architect. Hagen has appealed the ruling to the state Supreme Court, alleging the board violated his right to due process and a jury trial.
Hagen had attempted to comply with Nevada’s rules, even if he got the timing wrong. The state’s response had the effect of preventing him from fairly entering the architectural marketplace. The regulatory struggle session he endured is far too common in the Silver State. Nevada’s architecture board is one of more than 300 boards, commissions and advisory committees that impose costly regulatory barriers for businesses and professionals. Occupational boards in particular have succeeded in turning Nevada into one of the most onerous licensure environments in the United States.
For example, Nevada is one of only a handful of states and territories that require a license to practice interior design. Apparently, state lawmakers believe that without an accredited multiyear university degree (or five years of equivalent experience), two additional years of experience and hundreds of dollars in fees, the color you pick for your client’s couch can become a safety hazard.
Much like the other occupational licensure bodies, Nevada’s architecture board illustrates a common dynamic. The state grants licensure authority to a board composed of existing competitors in the market. Just as with medieval guilds, these boards routinely create artificial barriers to entry for prospective competitors to safeguard the market for themselves. This regulatory capture bottles up dynamism in Nevada’s labor market, limiting entrepreneurship and social mobility. Consumers also have fewer providers to choose from in more than one hundred industries.
It’s reasonable to require licensure for a surgeon or pilot because their professions could endanger the public when not practiced by a skilled professional. But states require licenses for many areas of employment that don’t meet this standard. For instance, New York is the only state that requires a license for drama therapists. Iowa requires its barbers to undergo a minimum of 1,550 hours of education, 2,000 hours of work under the supervision of a licensed barber or a 2,000-hour apprenticeship program before seeking a license. And in Massachusetts, you cannot be a fortune teller without a license issued by your local government. It’s unlikely anyone would suffer irreversible harm if their barber spent fewer than 1,550 hours in a classroom or if their psychic did not register with the city council.
But apart from absurd licensure costs, Hagen’s case illustrates how governments and special interests often collude to the detriment of consumers and would-be service providers. When granted the power to regulate the supply of professionals in an industry, small groups of mostly entrenched gatekeepers will serve their own best interests — not those of consumers or an open market.
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