Las Vegas’s high land prices would make a lot more sense if the area were surrounded by water.
Last year, the average price for an acre of residential land in the Las Vegas Valley was around $514,000. If that sounds extremely high, you’re right. In 2020, land costs were at about $250,000 an acre.
That adds up. The price to secure a lot of 6,000 square feet — a bit under 1/7 of an acre — jumped more than $35,000 in one year. Builders have to pass on the costs of land that they use for a development’s roads and parks, too.
This is one of the major factors pricing many families out of the housing market. The median price of previously owned single-family homes hit $450,000 in February. The median price of a new home was $453,000 last month, a jump of 19.2 percent from a year ago.
In a healthy economy, the best way to reduce these prices is to build new houses rather than to impose counterproductive rent-control measures. The collapse of the current housing bubble could lower prices, too, but that’s not a path that many people want to repeat after 2008.
Land prices are so high that developers are looking at projects in outlying areas such as Pahrump, Mesquite and Laughlin, where real estate is much cheaper. The Review-Journal found parcels available at $58,000 an acre in Pahrump and $180,000 an acre in Mesquite.
This all makes sense from a supply-and-demand perspective. Those areas are an hour or so away from Las Vegas, which makes them less desirable. That means the price is lower.
But here’s what doesn’t make sense. Think about what’s between the Las Vegas Valley and those outlying areas. Nothing. It’s dirt and the occasional cactus. There’s plenty of room to build houses.
So why aren’t developers buying land a few miles away from outlying suburbs? Surely, it would be more desirable to be five minutes away from the outskirts of Las Vegas than 45 minutes away.
But if you look at maps of Clark County that focus on land ownership, the Las Vegas Valley looks like an island — except the “water” is land owned by the federal government. Clark County has more than 5 million acres of land. The federal government controls around 90 percent of it.
That makes some sense. Military bases and training ranges have to go somewhere. It’s fine for the feds to own some acreage around places such as Lake Mead and Red Rock.
But the vast majority of the Washington’s land ownership isn’t justifiable or productive. Federal bureaucrats are just sitting on it. They’ve turned a deaf ear to the warnings of county officials that developable land in Clark County is quickly running out. The current plan for more developable land requires a literal act of Congress.
The government has made the desert surrounding the Las Vegas Valley as inhospitable to development as the water surrounding an island. But instead of waves and beaches, we just have high prices.