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Natural outdoor beauty, countless recreation options, strong families, connected communities, and a vibrant economy are just some of the things that make Utah special. And what makes Utah great is also what makes Utah grow.
State and local leaders recognize the need to plan for the challenges that come with growth and welcome suggestions and input from the public through the recently launched Be Heard campaign.
Utahns' biggest worry
Many Utahns worry about the impacts of population growth, and rising housing costs top the list, according to Envision Utah's 2021 Values Study. Prospective first-time homebuyers in Utah are especially impacted by increasing home values. Residents wonder whether their children and grandchildren will be priced out of the market and forced to move to other states.
"It's a big concern," said Christina Oliver, director at the Utah Department of Workforce Services Housing and Community Development Division. "Families that have lived here for generations now see their children and grandchildren unable to purchase homes. Parents worry their kids will have to leave Utah to afford home ownership."
As communities work to address housing issues, they must weigh many development options and their impacts. For instance, should new housing be placed on the edge of existing communities or within them? Or would it be better to direct development near town centers and public transportation? Would slowing growth altogether by restricting new housing be worth the smaller inventory and higher prices?
It's important to understand the why behind Utah's increasingly expensive housing so we can pinpoint the best options for curbing this trend.
Supply, demand and mortgage rates
Housing affordability is largely a story of supply and demand. Supply shortages, driven by market and labor conditions, regulation, infrastructure gaps, and lengthy construction approval processes, result in price increases. As of 2021, Utah needed an additional 31,000 housing units to meet demand, according to the Kem C. Gardner Policy Institute (Gardner Institute). This unmet demand means there are not enough housing units for all the people attempting to buy or rent in Utah. As a result, multigenerational households are increasing.
And rising mortgage interest rates haven't helped the situation.
"Over the last year, mortgage interest rates doubled to further erode housing affordability," James Wood, Gardner Institute Ivory-Boyer senior fellow said. "For the more than 300,000 renters in Utah, the dream of homeownership has become less attainable, which limits wealth-building opportunities."
The Housing Prices and Affordability policy brief, published by the Gardner Institute in February 2023, revealed the median sales price of a single-family home along the Wasatch Front rose from $522,000 to $550,000 between October 2021 and October 2022, while the median monthly mortgage payment for a Wasatch Front home increased from $2,921 to $4,276.
In 2022, the salary required to finance a median-priced home was $183,257, yet, according to the U.S. Census Bureau, the median income for a Utah family of four in May 2022 was $101,146. And, while the March 2023 median home price statewide dropped by 6.2% compared to March 2022, the decrease is still below what would be needed to compensate for previous rises in home prices and currently rising mortgage rates.
What about rent?
Rising housing costs are not limited to home ownership. Utah rental costs have also increased substantially. This burden impacts many Utahns who spend early adulthood living in a rental property. In fact, according to Pew Research Center, nearly two-thirds of U.S. adults below the age of 35 live in rentals. Most Utahns have likely rented at some point in their lifetime.
"Traditionally we've looked at rent as the solution for those who cannot afford to buy homes," Wood said. "But both renters and first time homebuyers are struggling with housing affordability."
The Gardner Institute Housing Prices and Affordability policy brief also described how the median income for renters, as tracked by the U.S. Census Bureau, grew by 19 percent between 2018 and 2023 while rent along the Wasatch Front increased at roughly double that rate. This burden surpassed national levels, as outlined in the Gardner Institute Utah's Rental Market 2023 fact sheet, which showed the percentage of Utah renters in 2021 who were burdened by housing costs was higher than the national average, 45% compared to 40%. The rental situation in Utah is alarming.
The 'missing middle'
House size in Utah has increased since World War II. Before then, home construction included many more townhomes, duplexes, fourplexes, and row homes. This more affordable "middle housing" culture provided ownership opportunities and the ability to generate personal wealth for more people.
The majority of Utah's housing inventory consists of single family homes and apartment buildings, but not much is being constructed in this "middle" range. Homes in the "missing middle" are critical for those who work in the public sector and often earn too little to purchase a market-rate home, but too much to qualify for government assistance.
This often includes teachers, healthcare workers, and public safety officers. The Utah Foundation issued a report specifically outlining how returning to the "middle housing" approach can be done in a way that complements neighborhood aesthetics. Increasing the state's "missing middle" housing stock will require a multi-faceted approach. Current barriers include housing market forces, the types of products offered by housing developers, and local regulations.
The impacts of housing variety and location
While many Utahns recognize the need for more housing options, they sometimes oppose such development in their own neighborhoods. This perspective is often driven by the assumption that more housing in a smaller area results in decreased home values, increased crime rates, and worse traffic. A 2021 study by Weber State University, The Impacts of Affordable Housing: A Literature Review, refutes these misconceptions. In reality, most studies show that affordable housing constructed in an aesthetically pleasing way with adequate public safety measures either has no effect or a positive effect on crime rates and property values. These studies also report a drastic improvement in quality of life for residents who secure stable housing in areas where it did not exist before.
Quality of life is connected not only to housing costs but also to location. Where people live impacts the time and money needed to travel to jobs and destinations. By building more housing variety in more areas, more Utah families have the option to live closer to jobs and public transportation, which can lower household expenses. Fewer people driving long distances means less time spent on the road, which alleviates traffic and air quality issues for everyone.
Guiding Our Growth
State and local leaders are committed to looking ahead, proactively gathering public input, and planning for the future. That's what Guiding Our Growth looks like. It's having a statewide conversation about the impacts of Utah's population growth and working together to preserve Utah's unique quality of life.
