This week, Zions Bank hosted Breakfast Briefing discussion on the Challenges of Housing Affordability with Utah Foundation and Garbett Homes. Housing affordability has been a major topic across the country, and particularly in Utah because:
- Salt Lake City is one of the fastest growing housing markets in the county, in part because of the economic and population growth over the last decade
- Utah has shown the largest percent increase in both employment and population as compared to other states.
With urban areas expanding, the accompanying challenges cannot be ignored; especially when it comes to clean air, infrastructure, and social stability. As more people come to call Utah home, it is important we have all types of housing for all people. Here are a few targeted areas Utah can focus on to make the urbanization more efficient and effective.
#1. Promoting Efficient Land Use While Improving and Preserving Community Character
By providing a mix of complementary land uses and support of compact building design, this will help to strengthen and revitalize downtown commercial areas and “Main Streets.” Changing demographics and real estate markets are driving demand for high-quality, compact and walkable communities. Local governments should plan for a diverse range of land uses and development to sustain a diverse economy. Well-planned, efficient infrastructure needs to be integrated properly within existing communities making sure the opportunity for increased density is appropriate, as well as implementing parking management and traffic strategies.
#2. Expanding Transportation Options
Local governments can focus on developing transit near dense, mixed-use neighborhoods – or, more to the point, developing dense, mixed-use neighborhoods along transit lines. Transit-oriented development can enhance economic development by connecting multiple employment sectors and activities in a central location, which provides opportunities to improve quality of life for residents. With more convenient transit options, residents are able to spend less time in traffic and improve air quality by reducing traveled miles by car and the ability to walk or bike to destinations.
#3. Investing in Affordable Housing
Utah has seen record numbers of housing in volume and value. In 2018 home values increased 10% across the state, which boasted upwards of $20 billion in homeowner wealth. Over 125,000 households in Utah are currently facing severe housing cost burdens. An increase in rental rates threatens their economic well-being and increases their chances of eviction and homelessness. Additionally, increasing home prices can limit, if not exclude, homeownership opportunities for households below the median income. This forces families into the rental market without the opportunity for the wealth creation of homeownership (Gardner Policy Brief). With the increase in economic prosperity and population growth, apartments are becoming more and more desirable in metropolitan areas. Although the construction of apartment units and development has hit record numbers since 2014—over 27,000 units—vacancy rates remain low and rental rate increases are above 5 percent. Many of the new apartment communities target the high-end apartment market and have some of the highest average rents in the county. The demand for high-end apartment communities is driving up rental rates overall, thereby reducing affordability in the region’s rental market (Kem C. Gardner Institute).
Utah needs to preserve long-term affordable housing, that will stabilize low-income tenants as well as enhance livable, healthy and sustainable neighborhoods. Local governments should consider adopting inclusionary zoning ordinances that provide a wide range of housing types and prices.