Skyrocketing rents in northern Nevada have pushed some to start advocating for policies such as rent control. But do local governments in the Silver State have the legal authority to artificially limit rent increases?
It's a longstanding legal debate with no easy answers — and it depends on who you ask.
The debate has resurfaced in recent months as Reno rent prices continue to break records. The average rent in quarter 1 of 2022 was $1,633, according to Johnson Perkins Griffin.
THE CITY'S POSITION
City of Reno leaders declared on the record in February that they believe they do not have the legal authority to impose rent control.
"A true rent control ordinance is not, at this juncture, a thing that we believe we have the legal authority to pursue," said city manager Doug Thornley, responding to questions from councilwoman Neoma Jardon.
Thornley also provided News 4-Fox 11 with a 2017 city attorney's office opinion, where assistant city attorney manager Jonathan Shipman agreed.
The memo references two bills passed by the Nevada legislature in the 2015 session, which sought to clarify language surrounding Dillon's Rule. Dillon's Rule is a legal principle under which local governments can only exercise powers expressly granted to them.
Senate Bill 29 and Assembly Bill 493 clarified that counties and cities, respectively, do in fact have the legal standing to enact policies that are 'matters of local concern.'
Shipman cited those bills in his 2017 opinion and wrote that the housing shortage is not a 'matter of local concern,' and therefore policies such as rent control couldn't be enacted by local governments.
"Since the shortage of affordable housing is a regional, statewide and national problem, it cannot be classified exclusively as a 'matter of local concern,'" Shipman wrote.
Lacking express legislative authorization, it is doubtful that the City will prevail in a lawsuit challenging the City's legal authority to implement rent control.
THE STATE'S POSITION
But the state of Nevada disagrees. Kevin Powers, the general counsel for the Nevada Legislative Counsel Bureau, sent his opinion on the matter to News 4-Fox 11.
Powers cited the passage of those 2015 bills and said they clarified that local governments are empowered to enact policies like rent control and inclusionary zoning.
"To be 100% clear, the LCB believes that local governments, including counties AND cities, do in fact have authority to pursue housing solutions such as inclusionary zoning and rent control?" News 4-Fox 11 wrote.
Powers replied simply with "Correct."
That position was echoed by Democratic Governor Steve Sisolak, who told reporters at a housing roundtable in March that he believes local governments do have such authority.
THE BOTTOM LINE
Since lawyers for the state and the city disagree over who has the authority, it would take a local government body passing a law to resolve the question once and for all. If the city attorney's office is correct, a legal challenge would be filed, sending the matter to a judge to decide.
But that would require local leaders pushing for rent control. As of now, top local government officials have yet to embrace rent control as a possible solution, instead focusing on boosting supply by working with developers and investing money into affordable projects.
Reno Mayor Hillary Schieve said it's hard and painful when she hears of landlords 'holding their tenants hostage,' but expressed skepticism that rent control would be the best way to address it.
"There's a lot of policies with rent control that can actually backfire," she said in an interview with News 4-Fox 11. "A lot of landlords will not invest in that property and then they end up becoming incredibly dilapidated."
RENT JUSTIFICATION
Perhaps this thorny legal question could have been resolved over 40 years ago, when the Reno city council passed a so-called rent justification ordinance law in 1978.
Barbara Bennett organized a coalition of mobile home renters looking to cap rents, later pushing the city council to pass rent justification, journalist Andrew Barbano said.
The policy would've required landlords to go before a rent justification board to justify any increase in rent when availability of rental units dropped below 5%, he said.
But before it went into effect, the city council sent the measure off to the courts to determine its legality.
"Judge James Guinan basically told the city of Reno, you've got to be kidding. I'm not making a decision on this. He bounced it out of court," Barbano said.
By that time the city of Reno had gotten so much pressure from the business establishment, they didn't go any further with the ordinance they had passed and they repealed it.
Email reporter Ben Margiott at bjmargiott@sbgtv.com. Follow @BenMargiott on Twitter and Ben Margiott KRNV on Facebook.