SALT LAKE CITY — Utah's residential housing market is among the hottest in the nation, but for some, particularly renters, the increasing cost of apartment living is weighing heavily on their household bottom lines.
Wasatch Front resident Garrett Cooper, 34, is among the growing number of Utahns coping with the economic realities of paying rising rental rates while trying to balance other personal financial obligations. Following a divorce, he now shares custody of his son while renting an apartment in Millcreek.
"It's very tough," Cooper said. "It's difficult. I find every year that I have to make cuts and sacrifices on different things as the rent goes up year to year."
He pays approximately 35 percent of his gross monthly income for rent, but more than 50 percent of his net monthly household income, he noted. Dedicating such a large portion of his wages to rent has been challenging, he said, and the cost has gone up significantly over the past several years.
Sometimes his household budget cuts involve discontinuing a movie streaming service, while other "belt-tightening" choices force him to look for the "best bargain" when shopping for necessities, he said.
"It can be a real struggle," he said. "I get paid biweekly, so there are times when I'll get paid almost a full two weeks before the rent is due and won't get paid again until after the rent is due."
He said those times are particularly tough.
"(I'll be) at the point where I have to decide which bills to skip or which groceries to skip," Cooper explained. A number of his friends and family members have found themselves in similar circumstances, he said, due in large part to rising rental rates.
According to the 2018 Cost Burden Report, nearly half — 49.5 percent — of all renter households nationwide are "cost-burdened." The report stated that moderately burdened households spend 30 percent to 50 percent of household income on rent, while severely burdened households spend more than half their income on rent.
In the U.S., the number of rent-burdened households in 2017 was 3.1 million greater than in 2007, the report stated, with Florida registering the highest cost-burden rate at 56.4 percent. A household earning the median renter income would be burdened by the median rent in 20 of the nation’s 25 largest metro areas, explained report author Chris Salviati, senior economist for Apartment List.
"Half (of all renters) are cost-burdened, and 1 in 4 are severely cost-burdened — spending more than half their income on rent," he said. "When you're spending that much of your gross income on rent, it really doesn't leave much for even covering basic necessities, let alone planning for the future."
A major factor in the rising rents has been the increase in the number of renter households while homebuying households have declined, Salviati noted. Additionally, the number of high-income renter households has grown as well.
"Keeping the higher income households in the rental market are driving rents up, and making it even tougher for people that are at the lower end of the (overall) income distribution," he said.
That dynamic is occurring in Utah as well, he noted. Last year, the overall rate of cost-burdened renters in the Beehive State was 44.3 percent — 5.2 percentage points below the national average. The percent of moderately cost-burdened renters was 25.3 percent, virtually even with the national average, with the rate of severely cost-burdened Utah renters at 19 percent — 4.9 points below the U.S. rate.
Despite the state's below-average rent-burden rates, the data still points to a larger challenge confronting renters.
"You could be doing much better than the national average, but still be facing a severe and overwhelming issue," Salviati said.
Housing affordability is a growing concern in Utah, said Mary Jane Fine, chief operating and financial officer with Utah Nonprofit Housing Corp. — a Salt Lake City-based organization that helps low- and very-low income individuals and families find decent, affordable housing.
"Because of the shortage of rentals, people are really, really increasing the rents," she said. Noting the average one bedroom apartment rental rate in Utah is just over $1,000, she said people making minimum wage are hard-pressed to afford such accommodations.
"This is what the populations that we deal with are facing every day," she said. "Sometimes you find yourself, in order to afford housing, working two and three minimum wage jobs just to survive."
The 2018 Salt Lake City Multi-Family Report by commercial real estate firm CBRE showed the average Wasatch Front rental rate was $1,101, up from $1,059 last year and $994 in 2016. The rising rental rates can be attributed to increasing construction costs and the state growing population, said Eli Mills, CBRE senior vice president of Capital Markets.
He noted that 46 percent of Utah’s population increase is due to in-migration — people moving into the state. Much of that growth is from new employment opportunities, he said.
Meanwhile, local families continue to grapple with the expensive realities of trying to afford a decent place to live.
Utah County newlywed Hanna Miller, 21, lives in an apartment with her husband, who attends Utah Valley University and also works part time. While Miller has a full-time job, the couple spends nearly half of their income on rent for a one-bedroom unit.
"Honestly, it's something we kind of accepted because we wanted something that wasn't broken," she said with a laugh. "An apartment that was actually decent to live in and didn't have any problems."
She said their first rental was an old unit that was drafty and had mold, so they vowed to avoid a similar circumstance in their next place. Keeping that promise to themselves has come at a cost, she added.
"We found a place that had a pretty good base rent and then the fees started adding to the cost," she said. The base rent was $1,029, but the monthly cost also included fees for parking, an electronic security system and other expenses, she said.
"All of those fees added up to another $300 or $400 more," Miller said. "And it was mandatory!"
Utilities also add to the monthly cost, she noted.
One thing she would like to see is cities encourage developers to build more affordable units so that families like hers don't have to pay half their monthly income just to keep a roof over their heads.
"People are being forced into paying more than 30 percent of their income, which is not allowing them to save (anything)," Miller said. "I honestly think there is a lack of affordable housing and nobody is doing anything about it."