Lyon County moves to allow multifamily housing on commercial land

Lyon County NV – October 8, 2026

By Rachel Dahl

Lyon County is moving to change its development code to comply with a Nevada law requiring counties and cities to allow certain multifamily and mixed-use housing developments on commercially zoned property.

The Lyon County Board of Commissioners introduced the proposed ordinance Oct. 1 in response to Assembly Bill 241, approved by the Nevada Legislature in 2025.

Community Development Director Gavin Henderson told commissioners the law requires local governments to allow qualifying multifamily housing or mixed-use development with a residential component on property zoned for commercial use.

Industrial property is excluded, along with certain airport-related property and land governed by the Tahoe Regional Planning Compact.

For Lyon County, the practical effect would be to make multifamily housing a permitted use in several commercial zoning districts where it previously was not automatically allowed. County code defines multifamily housing as three or more units.

Henderson said the change could speed the development process. Projects that might previously have required a conditional-use permit and a public hearing before a board could instead be handled administratively if they meet county standards.

District 4 Commissioner Robert Jacobson asked whether the change would create additional work for developers.

“No,” Henderson said, explaining that the legislation was intended to expedite multifamily development by making it a permitted use rather than requiring a board-level decision.

“So this should speed it up,” Jacobson said.

“Yes,” Henderson replied.

Jacobson also questioned how the law would affect utility providers such as the Silver Springs General Improvement District and whether those systems would be required to accept new developments.

Henderson said they would not.

A utility provider could still determine that it does not have capacity to serve a proposed development, he said. Developers would also be responsible for the cost of utility connections and infrastructure improvements.

The county’s proposed ordinance would require new multifamily developments to be served by public water and sewer. Projects adjacent to existing service areas would have to seek annexation into those systems and comply with the requirements of the utility provider.

Commissioner Scott Keller raised broader concerns about how the statewide law could affect rural communities, particularly Silver Springs.

“In my opinion, it’s probably one of the stupidest laws that they enacted,” Keller said.

He pointed to commercial property along Highway 50 in Silver Springs, saying some highway frontage had been placed in commercial zoning partly because of concerns about residential development in flood-prone areas.

Keller also questioned whether allowing residential development on commercially zoned land could create problems for families living near major highways or reduce land available for future commercial development.

He asked what restrictions Lyon County could still place on qualifying developments, including setbacks, sound walls and density limits.

Henderson said existing setbacks would remain in effect and the county could consider additional development standards.

Lyon County currently allows up to 18 multifamily units per acre in its multifamily residential zoning district, he said, and commissioners could consider establishing a lower density limit for multifamily projects on commercially zoned property.

However, Henderson cautioned that the county cannot adopt standards that conflict with the state law.

“The hard part about this Assembly bill is to have that provision that anything that would go against it would automatically be void,” Henderson said.

He said most jurisdictions have taken a relatively simple approach by changing their land-use tables, while Lyon County is proposing an additional public water and sewer requirement.

Keller said the law illustrates the importance of counties following legislation as it moves through the Nevada Legislature.

“I understand why Clark County, Vegas, Reno and Carson would want to do that, but I don’t know any other county that’s happy with this,” he said.

The county’s proposed ordinance would change its development tables to allow qualifying multifamily and mixed-use residential developments on commercially zoned property while requiring new multifamily projects to have public water and sewer service.

Developers would remain responsible for applicable utility connection, capacity and infrastructure costs.

The Oct. 1 action introduced the ordinance as Lyon County begins the process of bringing its development code into compliance with the state law.