An association representing vacation rental owners in Southern Nevada is asking a judge to enjoin the state and Clark County from enforcing what it says are unconstitutional regulations imposed last month on the so-called ‘Airbnb’ industry, and to declare the state and local laws unconstitutional .
A state law passed in 2021 required the county, which had largely turned a blind eye to the estimated 10,000 to 12,000 short-term rentals (STRs) operating illegally in its jurisdiction, to impose regulations.
The county, under an ordinance that went into effect last month, is poised to license 2,850 units, a fraction of those currently operating.
The county is slated to begin accepting applications for six months. After that, a lottery will determine the applications that proceed. Properties within 1,000 feet of a licensed property will be ineligible, as will properties within 2,500 feet of a casino resort.
The Greater Las Vegas Short-Term Rental Association contends that the governments’ interference in a previously unregulated sector is random and will deprive owners of their properties’ income potential.
The suit was filed this week by Hutchison and Steffen, the law firm founded by former Republican Lt. Gov. Mark Hutchison.
Democratic Assemblywoman Rochelle Nguyen, who championed the state legislation, did not respond to a request for comment. Clark County also did not respond to requests for comment.
Opponents of STRs say they have transformed neighborhood homes into mini-hotels and exacerbated the region’s affordable housing crisis by increasing prices and taking already scarce units from the market. Las Vegas is among the most profitable markets for STR owners, and a popular location for private and institutional investors.
The suit says GLVSTRA, which has about 700 members, does not oppose regulation or the fees and taxes that go with it. But it says the ordinance exceeds “reasonable and permissible government regulation” under the state and federal constitutions.
It alleges the application and enforcement provisions of the ordinance are arbitrary and capricious and violate the Due Process Clause of the Nevada Constitution, as well as Amendments to the US Constitution.
The ordinance requires applicants to file a completed application just to be eligible for the lottery.
“Whether or not they receive a license depends on chance,” the suit says. “Not qualifications. Not a timely application. Not a complete application. Not compliance history. Not paying fees. Those could be stellar, yet an applicant could be randomly denied the opportunity to earn income or use their own property.”
It goes on to say that even those fortunate enough to have their number drawn “would nevertheless be denied an application if by happenstance a neighbor who lived within 1,000 feet from their home also received a license.”
The suit says a 2,500 foot distance requirement between licensed properties and resort casinos is arbitrary, noting it’s more than twice the 1,000 foot separation required between marijuana dispensaries and resorts.
GLVSTRA alleges that the ordinance violates takings clauses of the state and federal constitutions because the regulation deprives owners of the economic benefits of their properties.
The new law, according to the suit, also violates the right to privacy of occupants, whose outdoor activities could be surveilled via sound monitors required at licensed properties, and by allowing regulators access to properties.
“The sum effect of these provisions is that Clark County—a government entity—will have unfettered access to view all individuals who enter and exit a home, what they do behind a fenced front or back yard, and, even more egregious, may enter the home without cause or advanced notice…” the suit says.
Similar suits are playing out throughout the country, especially in tourism-rich locations, as communities grapple with the debate over the right to lodge visitors in homes.
Last month, a Hawaii association of STR owners soud to block a law limiting new vacation rentals on the island of Oahu.
Austin, Texas, which amended its ordinance in 2016 to grandfather in some 17,000 existing STRs, has defied court orders to issue more permits.