Price hikes, high occupancy squeeze Vegas renters

LAS VEGAS (AP) — Las Vegans seeking new digs or out-of-towners relocating here have called upon apartment hunter Pat Stanley since 1989.

Stanley and her employees at Apartment Finding Service typically had little trouble placing people in a community in which constant building kept rent prices low and supply steady despite a booming population.

Then, last spring, that trend came to a halt.

"It's a different world than it has been for the last 15 years," Stanley said. "We're having just a terrible time trying to accommodate people, and when we can, they're looking at serious rent increases."

A confluence of factors has gripped the Las Vegas apartment market and, in an echo of the red-hot housing market, sent supply plummeting and rents soaring.

Escalating costs for land, materials and permits have all but stopped apartment construction in favor of more lucrative homebuilding.

Simultaneously, thousands of existing apartments are being turned into condos to accommodate buyers who can't afford rapidly rising housing costs.

With the apartment market shrinking, locals displaced by condo conversion are competing for a place to live with thousands of people moving here each month.

Not surprisingly, apartment complexes have seen their occupancy rates swell from about 92 percent six months ago to 98 percent. It's suddenly a landlord's market.

The monthly rent on the average Las Vegas apartment increased from $739 in early 2000 to $768 in late 2003, according to market research firm CB Richard Ellis. That's an average rent increase of only $7.25 a year, or less than 1 percent annually.

Rents this year have been rising at more than four times that pace, increasing 2 percent in the first six months of 2004 alone, to an average $784.

Landlords and property managers are almost giddy about demand that will allow some to raise rents at double-digit percentages.

"I have never seen anything like it. I'm just ecstatic," said Karen Mordue, regional marketing director for Camden, which has about 10,000 units in 17 complexes. "We're trying to take advantage of it, but obviously we don't want to gouge our residents."

Complex operators foresee rent increases from 8 percent to 12 percent this year and in 2005, said Bruce Monzulla, president of Realty Management Inc., which manages more than 18,000 apartments in Las Vegas, about 10 percent of the market.

As for incentives such as a free month's rent, forget about it.