How not to get Las Vegas building: Hike building fees 70 percent

Victor Joecks

Although the city of Las Vegas has one of the worst housing/building markets in the country, the Las Vegas City Council has a plan – to make things worse. A city council subcommittee is now considering a proposal to hike building permit fees by up to 70 percent.

The proposed ordinance calls for an increase of 65 percent to 70 percent in the fees for plan checks, building permits and inspections. Those fees pay for the work of the Building and Safety Department.

While the city says construction trade groups are reluctantly on board, at least one entity is sharply critical, saying “bloated” salaries should be cut before fees are increased.

Building permit activity is one-third of what it was in 2004 and the Building and Safety Department has adjusted by shedding staff, paring a 124-person staff to 49 employees.

Further staff cuts are “impossible” if the city wants to continue providing adequate services, Chris Knight, the building department’s director, said at a recent hearing to discuss the ordinance. Without a fee increase, however, more cuts would be necessary, he added.

If the city actually wanted to encourage growth instead of just protecting government jobs, it would lower taxes, cut red tape and loosen zoning requirements.

And what about the National Association of Industrial Office Properties’ Southern Nevada Chapter claim that salaries are “bloated”?

Well, TransparentNevada shows that Chris Knight, director of the Building and Safety Department, made over $250,000 in 2009 in salary and benefits, so I’d say there’s at least a case to be made.

Regardless, hiking building fees by 70 percent in the midst of a serious economic downturn (especially for builders) is the height of economic foolishness.

This chart shows how raising taxes (or fees, in this case) affects supply and demand.