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Commentary: Too much land in federal hands stunts Nevada’s economic growth

Guest commentary by Michael Chamberlain
Americans for Prosperity

Posted 4/2/2013

Nevada – Travelers through the state of Nevada notice vast expanses of wide-open spaces. Though this land lies within its borders, the state’s residents have no control over it.

Most of the land in Nevada doesn’t belong to private owners or even to the state itself. Nearly all of state’s land – more than 80% – is owned by the federal government.

Decisions regarding how this land is to be used are made by politicians and bureaucrats thousands of miles away. At times this has proven catastrophic for the Silver State.

One theory to at least partially explain the reason Las Vegas experienced a larger housing bubble than elsewhere in the country (and a larger crash when the bubble burst) is rationing of land by the federal government. The federal Bureau of Land Management (BLM) controls virtually all land in the Las Vegas valley beyond what is currently developed. In the prior two decades, as the population of Las Vegas grew at a staggering rate, one of the few sources of large parcels of land for development was the BLM.

As with all rationing schemes, a shortage resulted. This shortage caused rapid increases in prices for raw land around Las Vegas. Prices tripled in just a few years, which helped push prices for houses higher. When combined with easy capital for home purchases, this provided even greater force inflating the local housing bubble, and greater force behind the collapse.

Not only could federal ownership of such a large portion of the state’s land be partially responsible for its residents being hit harder by the recession, it has also made economic recovery much more difficult.

Mining is one of the state’s largest and most important industries. But, even as the prices of the minerals mined from Nevada land have skyrocketed, the shackles of red tape prevent the state from taking full advantage of the opportunities available.

It can take up to ten years to obtain the permits required for a mine on federal land, twice as long as on state-owned or private land. Mineral prices are notoriously volatile and a project that may be feasible at today’s prices may not be if prices fall too far. The uncertainty of having to predict so far in the future in a volatile environment adds additional risk that makes miners more hesitant to invest their time and money in new projects.

Whole communities can feel the pain as well. Lyon County suffers from the highest unemployment rate of any county in the state, still nearly 15%. Meanwhile, the city of Yerington within Lyon has been attempting to obtain a parcel of federally-owned land adjacent to the Pumpkin Hollow Copper mine.

The planned development could create hundreds of jobs in a job-starved community. But because the land is owned by the federal government it literally takes an act of Congress to make it happen. Even with bipartisan support for a purchase agreement, Yerington has been waiting years for such a deal and current snags with the legislation could delay it even further.

Federal ownership of such large portions of Nevada’s land may have contributed to the depth of the state’s downturn and certainly is hindering the recovery. While the bureaucrats in Washington may approve, it does not serve Nevadans well.

-Michael Chamberlain

Michael is an investigative blogger with WatchDog Wire-Nevada

In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. [Ref. http://www.law.cornell.edu/uscode/17/107.shtml]

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