There is a lot of blather out there about why housing got so expensive so fast.
The finger-pointing is frequent and noisy, and the culprit in local dialogue is almost always the Bureau of Land Management. The bureau has become a scapegoat.
One developer recently called the agency the "Bureau of Land Manipulation," a charge so unfair and so disingenuous that it simply muddles the discussion. The problem isn't the land the BLM holds; it's the way we see the land the BLM holds.
The reasons for the rise of land costs are complicated. The cost of land is certainly a factor as is the skyrocketing cost of materials these days.
A major supplier recently told me that even if land stayed at the same price for the next 12 months, the cost of materials alone would drive housing prices up at least at the rate of the recent increase.
The most overlooked factor in the increase is the perception of scarcity of land. This is crucial, for perception is more important than reality, and it is that very perception that has driven land upward in recent years.
Land prices rose because developers perceived that the commodity was getting scarce. The idea of scarcity rather than scarcity itself has driven much of the upward tilt of late.
Growth in the Las Vegas Valley is governed by two separate and not necessarily intersecting footprints.
One is the BLM land disposal boundary, ultimately an artificial constraint set by legislation, which will allow a total of 110,000 acres to be developed.
The other is a legal restriction, the result of Clark County's innovative habitat species conservation plan that allowed us to comply with the Endangered Species Act. This remarkable agreement, by far the best of its kind in the nation and a model for other communities, allows a total of 135,000 acres in Clark County to be developed.
The two footprints do not fit atop each other perfectly, nor is there agreement over which prevails. Currently, we've developed about 30,000 acres in the county. The BLM has about 40,000 developable acres left inside its disposal boundary. The rest of the land is in various hands, including private ownership and state and local holdings.
In 2002, new studies suggested that the accelerating rate of growth had shrunk the number of years remaining before we ran out of developable land from about 20 to between eight and 12. This set off an incredible rush to get hold of developable land before it "disappeared."
Under the terms of the Southern Nevada Public Land Management Act of 1998, easily the best arrangement any American community has ever secured to mitigate the effect of federal action, land was sold at auction.
Five percent of the proceeds were directed to support education in Nevada, 10 percent went to the Southern Nevada Water Authority and the remaining 85 percent was set aside for special projects that promote regional quality of life.
Capital improvements, conservation initiatives, development of parks, trails and natural areas in the county and acquiring environmentally sensitive lands all became primary uses of that money.
The land act came into being because it solved a major problem: For a long time, everyone in the valley had been indirectly victimized by the countless in-lieu land exchanges.
Someone would secure a stunningly favorable appraisal on a piece of land that the federal government wanted, a private holding near Lake Tahoe maybe, and swap that overvalued parcel for developable BLM land in the Las Vegas Valley.
In a time when land values were artificially low here, this process became the ticket to quick wealth in development in the 1980s and 1990s.
Despite the fact that such exchanges almost always looked like fraud, they created a lot of short-term winners in the valley. Developers could get land for cheap, and they passed the savings on to their buyers.
Construction remained largely nonunion, with a lot of Spanish-only-speaking workers further tamping down costs. Land seemed abundant, cheap housing prevailed, and everybody smiled.
Scandals in the in-lieu process led to the land act and its mandated land auctions. For four years the process worked fine and land costs did not accelerate much faster than they had before.
When bidders bought into the idea of scarcity, they became willing to pay higher prices for raw land, risking higher costs to assure they had what they perceived to be scarce supply.
Most coveted were contiguous parcels of 2,000 acres or more, for they allowed the opportunity to design master-planned communities with amenities that commanded higher prices. The economy of scale in such developments made it possible to pay more for land and still succeed.
The result was a rush, and land costs rose, until Focus Group paid $510 million for 1,712 acres in February. Whether this purchase blew the lid off the market or simply represented a peak makes little difference.
It was a defining moment, the end of one era and the beginning of a more crowded and almost certainly more expensive future. At these prices, there are ways to make development work, but they require higher levels of density than we've seen in the past.
We'll see whether the increases can be sustained in early November, when BLM auctions off a nearly 2,100-acre parcel near Aliante in North Las Vegas. This coming auction will point the way to the future.
In the meantime, we need to look in the mirror. A significant portion of the rise in land prices is a mess of our own making.
The factors have lined up so that we pay not only the entire cost of land for the first time in our history, but also a premium based on our sense that it is running out.
The situation is making a new valley around us, one that will be more crowded and more expensive.
In Wednesday's Las Vegas Sun: Why the valley has reached a critical moment in dealing with traffic.
Hal Rothman, a history professor at UNLV, is a columnist for the Las Vegas Sun.
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