Vegas boom brings jackpot to L.A. homebuilders: major hotels, theme parks spark new-home building.

Los Angeles County-based homebuilders, tired of waiting for the Southern California new-home market to rebound, are gambling on better odds in Las Vegas.

Inexpensive land, quick subdivision approval and Las Vegas' growing employment base are creating jobs so fast that contractors cannot keep up with the demand for new housing, said Las Vegas and Clark County planning officials.

Kaufman & Broad Home Corp. is the latest Los Angeles County homebuilder to enter the Las Vegas market.

Central to the Las Vegas housing boom are the 14,000 hotel rooms under construction, three theme parks in various stages of approval or development and Las Vegas' growing popularity as a place to retire, said Ron Lynn, the assistant director of the Clark County building department. Las Vegas is located inside Clark County and much of the development underway is taking place just outside the Las Vegas city limits.

Housing analysts estimate 4.5 permanent jobs are created for each new hotel room built, plus construction jobs generated during building, said Jay Moss, president of Kaufman & Broad of Nevada, a Las Vegas-based subsidiary of L.A.-based Kaufman & Broad Home Corp.

If those estimates hold true, and the new hotel rooms fill, Las Vegas will have 63,000 permanent job openings before long. And those job opportunities, are expected to fuel the local housing market.

Home buyers can purchase a three-bed, two-bath detached home in Las Vegas for $95,000 to $120,000, about 40 percent less than they would pay for a comparable home in Los Angeles County, said housing experts.

And while L.A. County continues to lose jobs, Las Vegas is in the midst of a huge expansion.

MGM Grand Inc., a hotel development and holding company, is developing a 35-acre theme park next to its new 5,000-room hotel. The Tropicana is expanding and building a Knotts Berry Farm-style park with three water rides, indoor roller coasters and theaters under one huge dome. Meanwhile, Circus Circus, another company that owns and operates hotels and casinos, is also building a theme park with roller coasters, water rides and a gondola under an 80-foot-high dome being built atop a multi-level parking structure, Lynn said.

Besides new job opportunities, Las Vegas is also drawing fans because it is located in a state that has no income tax and has fewer business regulations than California, boasted Nevada officials.

Consequently, Las Vegas appeals to companies that need a western distribution center but do not want to pay the high real estate costs and salaries typical of Southern California, Moss claimed.

Kaufman & Broad, which opened its Las Vegas division on Jan. 1, has already started developing two major subdivisions -- one designed for 116 homes and the other for 342 homes.

"And we are buying another parcel where we will build 215 units," Moss said.

All Kaufman & Broad residential buildings in Las Vegas, and elsewhere in Clark County, Nevada, are single-family detached homes that vary in size from 1,012 to 1,688 square feet. The asking prices for Kaufman & Broad's Las Vegas homes range from $95,000 to $119,000, Moss added.

"We plan to finish and sell 175 to 200 homes this year," Moss said.

Kaufman & Broad is far from the first L.A. homebuilder to turn its attentions to Las Vegas. Watt Housing Corp., a subsidiary of Santa Monica Based-Watt Industries Inc., has built 275 single-family homes in Las Vegas since opening a division there three years ago. It plans to build another 250 single-family detached homes there this year, reported Division President Ted Cox.

"Retired couples make up a significant portion of the market, but it is the construction of 14,000 new hotel rooms and their adjoining theme parks that are causing the growth," Cox said.

Along with the relatively cheap land prices and short approval process, Las Vegas imposes no school fees and seldom imposes other special district fees on homebuilders. The city and its surrounding municipalities are able to forego such fees because state and local governments in Nevada take in enough revenue from the gaming industry, Cox explained. By contrast, Los Angeles municipalities often require homebuilders to pay infrastructure and school fees. And those fees sometimes exceed the total cost of a moderately priced single-family home in Las Vegas, he said.

Another major Southern California homebuilder, Upland-based Lewis Homes, has been building homes in Las Vegas for 30 years. And Pardee Construction Co., the home-building division of Tacoma, Wash.-based Weyerhaeuser Co., has been building homes in Las Vegas for 20 years.

The economic boom in Las Vegas is clearly no secret among homebuilders. In 1992 alone, they built 11,454 homes in Clark County, where Las Vegas is situated, according to the Meyers Group, an Encino-based real estate market research company. Meyers is projecting that another 10,500 to 10,800 homes will be constructed in Clark County in 1993.

For the past five years, 85 percent of Clark County's burgeoning new housing stock has been detached homes, with the remaining 15 percent being condominiums and townhomes, said Glen Barton, director of Meyers' Las Vegas division. Approximately 40 percent of the county's new homes are being built in Las Vegas, 30 percent in neighboring Henderson, 20 percent in North Las Vegas and 10 percent in other areas of Clark County, he added.

The pace of Las Vegas home construction actually dipped to 4,386 single-family homes in 1992, down from 5,134 in 1991, City of Las Vegas records showed. However, that lull now seems to be over. In February, the city issued 572 single-family home permits, more than double the 225 permits it issued in January, according to Las Vegas building department records.

Las Vegas offers construction jackpot
                 (in millions)
Month             Permits issued         Value
Feb. 1993             1,168             $44.77
Jan. 1993               713              32.91
Feb. 1992               958              38.59
Source: Las Vegas Building Deparment