Las Vegas housing crisis pushes plan to build tens of thousands of homes

The Las Vegas Valley faces a mounting housing crisis, with a new joint analysis from the American Enterprise Institute and the U.S. Chamber of Commerce estimating a need to add about 58,100 homes to meet demand. Nevada as a whole is short roughly 81,000 homes, and the nation could require anywhere from 4 million to 8 million houses to close the broader shortage, according to the report. It frames housing as central to the American dream and the economy, while noting a stubborn supply-demand imbalance that has driven up prices and limited workforce mobility.

The crisis in Las Vegas goes beyond a simple shortage of listings. Even where homes exist, buyers have been sidelined by high prices. Home prices in the valley hover near record highs, rents remain elevated, and residential construction and sales have slowed. The valley’s land supply is constrained because a large share remains under federal control, and higher construction and labor costs burden builders trying to fill the gap.

To unlock more supply, the report outlines four paths. First, increase flexibility with lot sizes to allow townhouses and condos on smaller parcels, a change the authors say could add up to 18,600 homes. The report notes that from 2000 to 2024, townhomes accounted for 13 percent of new homes built in Las Vegas subdivisions and use only about 39 percent of the land needed for a typical detached home, underscoring land-efficiency gains from denser types of housing.

Second, the study envisions splitting larger lots into smaller ones, which could add as many as 1,700 homes. Third, it suggests permitting housing on land currently zoned for commercial use. Fourth, it recommends making more public land available for residential development. Taken together, the options aim to translate available acreage into usable homes while addressing the valley’s land constraints.

The housing push comes as Las Vegas’ tourism-reliant economy shows signs of strain. The Las Vegas Convention and Visitors Authority reports visitor volume in June fell 11.3 percent from a year earlier, and the first half of 2025 posted a 7.3 percent decline in visitors overall. On the gaming side, revenue has remained resilient, but spending on dining, entertainment, and shopping has cooled. Strip hotel occupancy was 85.3 percent in May 2025, a drop of 3.2 percentage points from a year before, and average room rates declined from about $198.20 in May to $163.64 in June, an 11.3 percent year-over-year decrease. Nevada as a whole generated nearly $100 billion in tourist-related revenue last year, underscoring the sector’s outsized role in the state economy.

Experts say the combination of high prices, land constraints, and slower construction activity threatens the region’s ability to sustain its growth and preserve the “American dream” of homeownership for a growing workforce. The report’s authors emphasize that deliberate policy choices will be required to expand supply without pricing out essential workers, while local leaders balance development with preserving quality of life in a city increasingly defined by its housing affordability challenge and evolving tourism dynamics.