Lawsuit Filed Against Las Vegas Short-Term Rental Regulations

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A picturesque view of short-term rental properties in Las Vegas.

News Summary

A group of short-term rental property owners in Las Vegas has filed a lawsuit against Clark County and Nevada state, arguing that new regulations infringe on their constitutional rights. The lawsuit claims the restrictions, resulting from Assembly Bill 363, hinder their leasing capabilities and have led to substantial financial burdens. Many applicants face severe delays in obtaining licenses, with fewer than 180 permits issued amidst over 500 pending applications. Critics argue these regulations threaten affordable housing and quality of life in neighborhoods, intensifying the dispute as legal challenges unfold.

Las Vegas – A collective of short-term rental property owners in Las Vegas has initiated legal action against Clark County and the state of Nevada, contending that newly imposed regulations on short-term rentals infringe on their constitutional rights. The lawsuit was filed by the Greater Las Vegas Short-Term Rental Association in the U.S. District Court for Nevada.

The plaintiffs argue that the regulations, which stem from Assembly Bill 363 passed in 2021, unconstitutionally restrict their ability to lease and operate their residences on a short-term basis. The regulations were officially introduced in September 2022, and under the new rules, Clark County is mandated to formulate ordinances governing short-term rentals.

Jacqueline Flores, the founder of the Rental Association and one of the plaintiffs, asserts that she has incurred over $7,000 in licensing costs while grappling with complex application requirements, including warrantless inspections of properties. The lawsuit seeks a federal court’s declaration that the current regulations violate constitutional rights, as well as reimbursement for costs incurred through these challenges.

Among the plaintiffs are various homeowners and two limited liability companies (LLCs) with rental properties, who are also contesting the legal standing of the new ordinances. A striking concern is that fewer than 180 permits have been issued to date, while over 500 applications remain pending, highlighting a significant backlog in processing applications that could take several years. Presently, the county’s regulations cap the percentage of residences eligible for short-term rental licensing at only 1%, which translates to several thousand potential licenses available. However, the sluggish application processing rate set at six per week has exacerbated the situation.

Critics of these regulations express concern that they could undermine affordable housing availability and diminish the overall quality of life in local neighborhoods. Many homeowners have reported waiting close to three years for responses regarding their licensing requests due to the complicated regulatory landscape. The Rental Association has also raised alarms over what they consider government overreach, citing instances of armed code enforcement officers conducting property searches without the necessary warrants.

The lawsuit claims that the regulatory framework violates several constitutional amendments, including the First, Third, Fourth, Fifth, and 14th Amendments, alongside specific sections of the Nevada Constitution. In addition to the homeowners, an important plaintiff, Airbnb Inc., a prominent short-term rental platform, is expected to join the lawsuit in solidarity against the regulations.

In conjunction with the ongoing legal challenges, Clark County Code Enforcement is implementing stringent measures against unlicensed short-term rentals, which may result in fines ranging from $1,000 to $10,000 per day. Since the establishment of the “Short-Term Rental Education Enforcement Team,” known as the STREET Team, over 5,700 cases have reportedly been opened, with an impressive 93% of these cases resolved without imposing fines.

Recent updates to the regulatory framework aim to expedite the licensing process while instituting stricter penalties for non-compliance, as the legal disputes unfold. In light of the growing tensions between property owners and local authorities, the situation over short-term rental regulations in Las Vegas continues to evolve as both sides prepare for the legal ramifications ahead.