Understanding the Nevada Land Market: A Tale of Tourism, Tumbleweeds, and Tax Incentives

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Understanding the Nevada Land Market: A Tale of Tourism, Tumbleweeds, and Tax Incentives

Bart Waldon

Nevada, the Silver State, is known for many things - the glitz and glamour of Las Vegas, wide open spaces dotted with sagebrush and Joshua trees, and its libertarian leanings. But how did this rugged western state become what it is today, and what factors drive its unique real estate and land development patterns? Grab your cowboy boots and straw hat as we dive deep into the world of the Nevada land and housing market here.

Early Exploration and Settlement Shaped Nevada’s Frontier Identity

Native American Tribes Inhabited the Land for Centuries

Long before Las Vegas was even a twinkle in the eye of Bugsy Siegel, Nevada was inhabited by Native American tribes like the Paiute, Shoshone and Washoe. Their way of living off the land set the stage for the state’s cultural identity. Tribes like the Paiute hunted, fished, and gathered plants across the rugged Nevada terrain.

Explorers Arrive Looking for Riches

When European settlers and explorers arrived in the 18th and 19th centuries, the landscape slowly began to transform. The 1806 expedition of French explorer Francois La Flesche was one of the first documented journeys by Europeans through Nevada. The Spanish also explored the area extensively, trading with Native tribes and searching for precious metals.

In the 1820s, American fur trappers like Peter Skene Ogden and Jedediah Smith were lured by the prospects of beaver pelts. Smith was the first American to cross the Great Basin and traverse the rugged Sierra Nevada range. Their travels helped bring Nevada to the attention of eastern settlers.

The California Gold Rush Ushers in New Migrants

The opening of the California Trail then ushered in settlers migrating west, who passed through Nevada’s corners on their journey. The trail brought wagon trains through the City of Rocks in eastern Nevada. The 1840s gold rush in California swelled the numbers heading west in search of fortunes.

Nevada was seen as desolate country to rush through enroute to the promised riches of the Pacific. But the influx of migrants laid the groundwork for future growth. The trails became major transportation and communication routes, exposing settlers to Nevada's potential.

Mormon Settlers Put Down Early Roots

Mormon settlers were among the first groups to establish permanent communities in Nevada starting in the 1850s. Led by church elder William Bringhurst, they founded Mormon Station, now the town of Genoa. Its charming historic buildings still stand today as a tourist attraction.

The Mormons were attracted to Nevada as an area where they could practice their religion in isolation. But conflicts with local Native American tribes like the Goshute over resources led to violence, demonstrated by the Genoa Massacre of 1857. Water scarcity ultimately hampered Mormon settlement in Nevada’s inhospitable terrain.

Mining and Ranching Boom in Frontier Nevada

Silver Strikes Lead to Mining Bonanzas

But the tide of change swept in rapidly when the 1859 discovery of the Comstock Lode sparked a frenzied silver mining boom. Prospectors flooded into Nevada when word of the fabulously rich silver deposits spread. Tent camps grew almost overnight into thriving mining towns like Virginia City, Gold Hill and Pioche.

Danger and lawlessness often prevailed in these hastily constructed settlements. But the mines were immensely productive, producing over $400 million worth of silver during their peak years of operation in the late 1800s. Hard rock mining shaped Nevada’s cultural identity and remains important today.

Virginia City was the epicenter of this silver bonanza. Located on the slopes of Mt. Davidson, it sprang to life with 30,000 residents during the Comstock Lode years in the 1860s. Mark Twain spent time there and later memorialized the wild mining town in books like Roughing It.

Cattle Barons Supply Meat to Mining Camps

Ranching also left an indelible imprint on the Nevada landscape in the 19th century. Vast cattle empires arose to drive herds up from Texas along trails like the Spanish Trail and the Mormon Trail to feed the growing mining camps.

Ranching families like the Haight, Pritchards and Tilford made their fortunes supplying beef to the Comstock Lode. The open range grazing practices depleted natural grasses and caused erosion over time. But ranching remains an enduring part of Nevada’s rural heritage and economy.

You’re still likely to pass cattle meandering along the highways as you traverse the state’s basins and valleys. Ranch holdings represent a large portion of Nevada's private lands - an important factor shaping the modern day real estate market.

Water Dictates Nevada’s Development Patterns

Arid Climate Limits Growth

The most defining geographic feature of Nevada is its arid climate. Nevada is the driest state in the U.S., with an average annual precipitation of just 9 inches. With scant rainfall, access to water sources is perhaps the most important factor in determining land values and development patterns.

Urban growth centers have sprouted up along the Colorado River and other scarce water bodies. Wherever water flows, people and real estate development will surely follow. The few small rivers and streams that cross Nevada's vast empty quarters provide ribbons of life.

Much of rural Nevada remains empty due to lack of water needed for agriculture or other economic activity. Groundwater aquifers are tapped extensively but recharge slowly in the desert environment. Water politics dominates the state's land use debates.

Colorado River Drives Southern Nevada Growth

The primary water sources are the Colorado River Basin in southern Nevada and the Truckee and Humboldt rivers in northern Nevada. But Nevada’s allotment of Colorado River water is quite small compared to thirsty southwestern states like California and Arizona.

This makes access to groundwater aquifers and water rights a hot commodity. The Las Vegas metropolis grew around the Las Vegas Wash, which flowed from the springs that originally attracted Mormon settlers. The wash empties into Lake Mead, part of the Colorado River system that today supplies 90% of southern Nevada's water.

In the early 20th century, the Hoover Dam tamed the Colorado River and turned Las Vegas from a dusty desert outpost into an oasis. Today, tourism and hospitality drive the Las Vegas economy. But water supply challenges loom as competing demands strain the over-allocated Colorado River.

Northern Nevada's Truckee and Humboldt Rivers

Meanwhile, Reno’s growth has been nourished by the Truckee River, which originates at Lake Tahoe and sustains agriculture in northern Nevada before terminating in Pyramid Lake. Settlements grew up along the river’s banks.

The Humboldt River traverses westward across northern Nevada. This provided a lifeline for early pioneers following trails like the California Trail. But water demands from mining and agriculture have heavily impacted its flows. Keeping the Humboldt alive is key to sustaining rural communities.

Groundwater Supports Military Sites and Farming

Other areas rely extensively on groundwater. For instance, the moon-like landscape at Hawthorne, home to an important naval ammunition depot, is dotted with wells tapping into the local groundwater basin. And agricultural areas pump water from aquifers to irrigate crops and pastures.

Sustainably managing both surface water and groundwater will shape future growth. As one Nevada saying goes, "Whiskey's for drinking, but water's for fighting over." The truth of that has played out through Nevada's history.

The Gambling Capital of Las Vegas Takes Shape

From Desert Outpost to Mobster Playground

Of course, no discussion of Nevada is complete without talking about Las Vegas and the gaming industry. Today Las Vegas is the epicenter of Nevada’s population and economy. But it took ambitious visionaries to transform a dusty railroad town into a dazzling international resort destination.

Las Vegas started as a remote outpost, valued more for its springs than any economic potential. A Mormon fort was established near present day downtown in the mid-1800s, but soon abandoned. In 1905, an auction opened the land to railroad developers. The San Pedro, Los Angeles & Salt Lake Railroad laid tracks connecting Las Vegas to points east and west.

Like mushrooms sprouting after rain, saloons, boarding houses and other businesses popped up around the new railroad depot to serve surveyors, workers and travelers passing through the dusty desert settlement.

In 1931, Nevada legalized casino gambling, an industry scorned in much of the country at the time. This opened the door for developers with visions of creating a gambling and entertainment mecca in the desert. Gangsters saw an opportunity to build casino resorts away from the prying eyes of the law back east.

Bugsy Siegel’s Flamingo Lights the Fuse

In late 1946, mobster Bugsy Siegel opened the glamorous Flamingo Hotel, the first major casino hotel on the Las Vegas Strip. Despite initial operation struggles, it set the template for future resorts - exotic theme, decadent luxury, non-stop gaming and entertainment.

Siegel met an untimely demise, but his vision lived on. Over the next few decades, businessmen like Howard Hughes and Kirk Kerkorian expanded the Las Vegas Strip northward from the Flamingo. Megaprojects like Caesars Palace and The Mirage helped cement Las Vegas as the “Entertainment Capital of the World.”

Rat Pack Glamour and Reinvention

Las Vegas’ image was further enhanced by the “Rat Pack” entertainers like Frank Sinatra and Elvis Presley. Their headline shows brought excitement to the Strip in the 1950s and 60s. But behind the glitz, casinos and the mob maneuvered for power.

Howard Hughes helped clean up Las Vegas’ corrupt image when he arrived in 1966 and bought up Strip properties. He ushered in the era of large corporations running casinos. The mob-tainted past was replaced by family-friendly attractions and opulent architecture aiming to attract tourists from around the world.

An Economic Heavyweight Rises in the Desert

This explosive growth powered Las Vegas’ evolution from a dusty town to a global destination. The population soared along with ever more extravagant casino resorts. Today, tourism and hospitality drive the Las Vegas economy, valued at over $56 billion annually.

The metro area now holds about 72% of Nevada’s population with over 2.2 million residents. Real estate development continues briskly as the Valley expands. Gambling may have ignited Las Vegas’ rise, but savvy reinvention of its tourism engine keeps the city’s outlook bright, whatever economic headwinds arise.

Life Beyond the Neon Lights

Ranching on the Open Range

While Las Vegas and Reno dominate the popular notion of Nevada, a different lifestyle persists in the rural expanses. The sagebrush seas and soaring mountain backdrops harbor ranching traditions dating back to the 19th century.

Cattle ranches still utilize large tracts of leased federal grazing land. The ranching way of life represents an important piece of Nevada's cultural heritage, centered around hard work and tough self-reliance. But pressures from developers seeking to carve out private lands are growing.

Ranchers fought extensive battles with federal land agencies over grazing rights and land stewardship. Conflicts flare up over issues like wild horse management. Maintaining access to public lands remains critical for generational ranch families seeking to preserve their livelihoods and lifestyle.

Ghost Towns Frozen in Time

Occasionally while driving the state's lonely highways you may chance upon quirky mining towns like Virginia City, Pioche or Goldfield that feel frozen in time. These were boom towns in the 19th century, sprouting up when gold, silver or other minerals were discovered nearby. They boomed as prospectors rushed in, hoping to strike it rich quick.

But most busted as fast as they boomed when the mines petered out. Their weathered remains stand as monuments to the fleeting nature of quick mining fortunes. Virginia City remains the most lively, kept going by tourism. But most others are true ghost towns, uncomfortably preserved in their decaying state by the dry desert air. Their empty streets evoke the romanticized spirit of the Old West.

Native American Reservations Battle for Resources

Native American tribes also retain significant land holdings across Nevada, mostly in remote areas. The 27 tribal reservations make up about 1.2% of Nevada's land. Tribes like the Moapa Paiute and Pyramid Lake Paiute have fought extensive legal battles to protect their land rights and water resources.

Mining, military and railroad expansions displaced tribes and destroyed ancestral lands starting in the mid-1800s. Restoring tribal self-sufficiency and cultural identity remains an ongoing struggle. Casinos have provided an economic boost for some reservations near population centers. But isolation and lack of resources hampers development for more remote tribes.

Stirrings of Technology-Driven Growth

While much of rural Nevada may seem trapped in the past, stirrings of a more modern economy have taken root. Attracted by low taxes and cheap land, tech companies like Tesla, Google and Apple established facilities just outside Reno. Battery factories, data centers, distribution hubs and manufacturing plants arrived.

The pandemic accelerated this as people untethered from offices sought space, recreation and affordable housing. Rural populations swelled with work-from-home migrants from expensive cities. New residents are transitioning rural communities for the future while preserving their distinctive pioneer spirit.

Reno - Small Town Gaming Births a New Economy

Railroad and Mining Origins

While Vegas steals the limelight, Reno also has gaming and tourism roots. It started in the 19th century as a rest stop along the Central Pacific Railroad crossing the Sierra Nevada mountains. Mining activity in the surrounding mountains helped fuel early growth.

Reno provided an outlet for adventurers flocking to California and Nevada’s mining districts. Its red light district gained notoriety as a haven for pleasures forbidden in more conservative communities nearby. This libertarian streak persists today.

Establishing an Early Tourism Niche

In the early 20th century, Reno started marketing itself as the “Gateway to Lake Tahoe.” Resorts like the Riverside Hotel began catering towards Hollywood celebrities seeking quickie divorces taboo back home. Through the Depression, Reno cultivated its image as an anything-goes playground and retreat from societal norms.

After World War II, Reno became a haven for postwar families now able to travel to vacations. The gaming industry grew along with tourism, although never attaining the grand scale of Las Vegas. Reno’s remote location far from major cities was a limiting factor in its development.

Embracing its “Biggest Little City” Quaintness

Rather than compete directly with Vegas in glitz, Reno embraced its quirkiness. Downtown hotels maintained their old-school casino ambiance. The city sold itself on convenience and nostalgic charm for older generations. Reno also provides access to Tahoe’s outdoor attractions, which grew in appeal.

The population of the Reno metro area now approaches 500,000 residents. While gaming still features, Reno’s economy has diversified. It is attracting tech and manufacturing companies, drawn by low taxes and affordable housing. Reno aims to stake its future on quality of life as an antidote to congested, costly cities.

Nevada’s Pro-Business Policies Attract Investment

Leveraging Low Taxes to Drive Growth

Nevada’s low-tax policies play an important role in shaping its land use and attracting new residents and businesses. The state has no personal income tax and no corporate income tax. It relies heavily on gaming and tourism for tax revenues.

This makes Nevada attractive for companies and individuals looking to reduce tax burdens. It provides a competitive edge for attracting firms shopping for new locations. Generous tax incentives help seal the deal to lure relocating companies.

Perhaps the biggest coup was landing Tesla’s massive Gigafactory through over $1 billion in tax breaks and subsidies in 2014. Other tech firms like Apple, Google and Microsoft have established major data centers in the Reno area, drawn by low taxes and affordable power.

Controversy Over Corporate Giveaways

But the strategy of corporate tax incentives faces criticism as well. Some contend Nevada gives away too much money without getting enough economic growth in return. The taxes saved by incoming companies leaves revenue gaps that must be balanced through higher taxes and fees on existing residents.

However, the low-tax, pro-business approach is deeply ingrained in Nevada's political DNA. Luring new firms by leveraging low taxes will remain a go-to strategy for spurring investment from targeted industries. How this shapes future land use depends on the type of companies attracted.

The Future of the Nevada Land Market

Accommodating Growth in the Desert

While history shapes perceptions, Nevada’s future landscape will likely transform in complex ways. The ideal of frontier freedom still exerts appeal. But some trends point towards major changes on the horizon.

Nevada’s population is projected to continue growing, likely passing 3 million residents before 2040. Much of this growth centers on the Las Vegas and Reno metro areas, which will drive demand for housing, services and infrastructure.

Accommodating the influx of new residents will strain scarce water resources. There will likely be pressure for privatizing more public lands for residential and commercial usage, cutting into Nevada's wide open ranges.

On the other hand, the pandemic accelerated migration to affordable areas with recreation and space. This amenity-driven growth brought many new residents to Reno and rural counties. More remote work could allow further dispersion away from big cities.

Preserving Open Spaces

Balancing growth and preservation will shape Nevada's land use future. Maintaining access to public lands for grazing, recreation and resource use remains critical for rural communities. More friction with federal land agencies seems inevitable as pressures mount.

Nevada also markets its pristine wild areas and pioneering spirit, which rely on protected open lands. Growth that damages the natural beauty and biodiversity that draws new residents and tourists would be counterproductive. Careful land use planning is needed.

Water constraints must also be addressed. Climate change threatens to shrink Nevada’s already limited water resources. Sustainably managing both surface water and groundwater is crucial for supporting future development.

The Next Chapter

The Silver State's landscape has been continuously reshaped since the days of Native tribes and pioneers. Undoubtedly it will transform further in ways we can't foresee today. But the frontier spirit of Nevada’s forefathers persists and will echo into the future.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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