Las Vegas Apartment Sector Counting on PUA

Las Vegas—a market driven by entertainment, hospitality and retail—has relied on the pandemic unemployment assistance, an additional $600 weekly unemployment benefit. The additional benefit expired at the end of July, and many residents and apartment owners in Las Vegas are waiting for a permanent replacement solution. Without it, there could be decreased occupancy and increased broken lease agreements, especially for the lower end of the apartment market.

“The impact has been mixed. Interestingly, in the midrange $1200-plus per month to high-end luxury $2000-plus per month apartment units, there hasn’t been much impact so far, as most of those tenants have been employed through the pandemic and now work from home,” Lisa Song Sutton, a Las Vegas-based real estate investor and broker, tells GlobeSt.com. “Unfortunately, the greatest impact has been in the lower range apartments that cost $900 per month or less.”

While Congress has yet to pass a permanent replacement plan for the expired unemployment benefits, The Federal Emergency Management Agency is providing a temporary $300 per week benefit to bridge the gap until a more permanent solution is found. “I think any funds are better than no funds, so $300 will help more than $0 would, however this is not a long-term solution,” says Sutton. “It’s a small bandaid over a much larger issue. The longer our Governor keeps the Las Vegas strip and our #1 economic driver, the hospitality and bar industry, on a short, chokehold leash, the worse the economic impact will be.”

Without additional stimulus, Sutton says that there will likely be consequences for the apartment market in Las Vegas. “I think we would have seen more tenants breaking their leases and moving sooner,” says Sutton. “In particular, workers from the entertainment industry have been out of work since mid-March. Some have been successful in obtaining unemployment assistance and some have not.”

Additional stimulus in the market will be needed as long as the pandemic is impacting the entertainment and hospitality market in Las Vegas. “Our number one industry in southern Nevada is hospitality and tourism,” says Sutton. “The longer that the Las Vegas strip isn’t able to fully function and operate due to state-mandated regulations, the longer the market will require UE benefits. We must get businesses back open and people back to work.”

Already, the apartment market has been dislocated by the event. “Some complexes closer to the strip and in the southwest of Las Vegas that housed casino industry performers, workers and tech crew have seen an exodus of renters leaving the city,” says Sutton. “The reality is that, at this point in time, much of their work and the Las Vegas shows aren’t slated to begin again through the rest of 2020. Other complexes in the suburbs have seen families try to do the best they can as they adjust to working and teaching school from home.”