The voter-approved growth cap in Douglas County was upheld Thursday by the Nevada Supreme Court.
In reversing a ruling overturning the initiative, justices left the door open for further legal proceedings.
The Sustainable Growth Initiative was approved by 53 percent of the county's voters in 2002 and mandates the county allow no more than 280 new dwellings be built each year.
The opinion by Chief Justice Bob Rose states that the initiative "is not so inconsistent (with the master plan) as to require us to strike down the will of the people by holding it invalid."
He was joined in that opinion by Justice Michael Douglas and Senior Justice Miriam Shearing.
"Douglas County residents were concerned with maintaining, conserving, preserving and protecting their way of life and, as such, the majority of Douglas County residents voted to keep the rural character of their community," Rose wrote. "We conclude that, based upon the evidence before the district court, the SGI is substantially compliant with the master plan to survive summary judgment and, as such, we will not upset the will of the people by holding the SGI invalid."
The majority ruling remanded the case back to District Judge Michael Gibbons, who overturned the initiative in 2003, for further proceedings.
Gibbons' clarification of his ruling last year cleared the way for the Supreme Court to rule in the issue.
Gibbons found the initiative violated the county's master plan and was an administrative matter not appropriate for a ballot question.
Justices Ron Parraguirre and Nancy Becker disagreed with the majority ruling, saying the initiative "will lead to many unintended consequences" incompatible with the master plan and is, therefore, in direct conflict with that plan.
The remaining justices, Mark Gibbons - whose brother issued the Douglas County ruling - and Jim Hardesty recused themselves from the case.
SGI co-chairman John Garvin said he wanted to examine the ruling.
"The caveat is that it was remanded to the district court, so we need to find out if we are going back for some sort of trial."
Douglas County Building Industry Association attorney Kelly Chase said he would have no comment until after he had consulted with his clients.
The ruling was posted Thursday afternoon on the Supreme Court's Web site.
After the measure's approval by voters, Douglas County joined a number of local entities, including Jumpers LLC, Century 21 Clark Properties Inc., and the Douglas County Building Industry Association, charging SGI was invalid because of its inconsistency with the master plan.
