Nowhere is Utah’s growth more pronounced than within the housing market. For the first time in 40 years, Utah has more families than our current supply of housing. Supply is not keeping pace with demand resulting in a shortage of over 54,000 housing units. This housing gap has left many Utah families struggling to find housing options that are affordable. Our state’s current home prices are 20% higher than comparable cities like Boise, Las Vegas and Phoenix; some of Utah’s top competitors in attracting new jobs and businesses. If left unaddressed, this housing affordability challenge will become a crisis.
WHERE IS THE GROWTH COMING FROM?
Utah’s population is growing faster than any other state, but unlike other rapidly growing states, Utah’s growth has been driven primarily by births rather than in-migration. Moving forward, trends indicate that in-migration will steadily increase to become a larger share of the state’s total growth.
“Utah’s looming housing affordability crisis is a great threat to our economic prosperity. Without a variety of housing options for our employees and their families, it’s possible they may choose to take their talent elsewhere. At WCF Insurance, we want our employees and their children and grandchildren to stay here, contribute to our workforce and continue to enjoy our state’s stellar quality of life.”
Ray Pickup, President & CEO, WCF Insurance
COMPONENTS OF THE HOUSING AFFORDABILITY PROBLEM
LOCAL POLICIES LIMIT HOUSING PROJECTS
The real impact on housing affordability starts with communities. Local officials are key to implementing informed land use policies that keep housing affordable in their communities. With limited developable land, these local policy decisions should incorporate density whether by apartments, mixed-use developments or smaller lots.
NOT IN MY BACKYARD
The inability to zone and make the needed land use decisions on a local level is often a result of residents’ opposition to change and growth. However, new housing developments will be necessary when these residents’ children and grandchildren enter the housing market.
DWINDLING CONSTRUCTION AND TRADES LABOR
For every five individuals retiring from the construction and trade labor force, only one replacement is being trained. This strained workforce creates risk for the homebuilding industry and results in increased housing prices.
SKYROCKETING CONSTRUCTION AND MATERIAL COSTS
The cost of construction materials has climbed 7.4% over the past year. This ongoing increase in hard costs, due partly to current tariffs, means the increase in costs will likely be passed on to the consumer.
HOUSING GAP COALITION
Established in May of 2018, the Housing GAP Coalition is addressing the challenges associated with housing affordability to ensure that the American Dream is kept alive for all Utahns by providing access to a variety of housing types for all income groups. This Salt Lake Chamber initiative brings together the state’s brightest minds from business, academia and government to tackle this very real threat to our long-term economic prosperity.