Among the unlikely treasures that have fallen into my possession through the years is my late father’s checkbook from 1962.
It’s a time capsule of sorts, much more illuminating than what people normally stuff in those things. Among other expenses I found from that pre credit-card-for-every-purchase era was a check for 50 cents, written on July 5 to something called Ice Treats Inc. Given that we lived in Phoenix, that made a lot of sense, and I’m sure I enjoyed it, being 3 at the time.
But there were a lot of serious bills to be paid, as well. Without going into monetary details, I was able to calculate that our family spent about 19% of its disposable income on housing costs, not counting utilities that averaged about $15 a month.
We had a nice house with a one-car garage in a decent neighborhood. So did a lot of people.
This week, the Salt Lake Board of Realtors released a midyear report with some startling figures. Among them: To afford a median priced house in Salt Lake County, a person would need a yearly salary of almost $187,000.
The report calls this housing market a “perfect storm” combining a housing shortage, comparatively high interest rates and record high prices. The median home price is now $645,000.
Also, Utah is projected to fall 153,000 homes short of the market’s demands by 2030, the report said.
Whenever people throw around figures such as these, it’s important to add a little perspective. Not every situation is the same. A lot of people have equity in their current homes and are able to use that to help move into a bigger place. Some may choose a starter home in a less-expensive neighborhood. A multifamily townhouse in South Salt Lake, for instance, would require an income of just over $100,000. Many households have dual income earners that could meet that threshold.
Others fall in an older age bracket, have paid off their mortgages and are enjoying large untapped wealth.
Many in that latter group are against any affordability push that might lower their own property values.
But still, a lot of young people look at the price of admission to the homeowner club and see nothing but hopelessness.
Here are some other statistics to consider. My dad was about average for 1962, a year in which the average household spent about 15% to 20% of its income on housing. Today, the figure is higher than 30% for both renters and homeowners, according to econofact.org.
That may not sound like a huge jump, but it makes a difference when trying to scrape together money for Ice Treats.
But while it’s fun to remember the blissful life in 1962, nostalgia doesn’t get us any closer to a solution.
Kudos to Gov. Spencer Cox, who acknowledged at his monthly news conference in August that his efforts to make housing more affordable had not worked. His goal was to build 35,000 new starter homes by the end of his term in 2028. KSL reported just over 7,400 have been built so far.
Cox said he doesn’t “control all of the levers” in the housing economy, which ought to be obvious. Local governments, the places where mayors and city council members might get booted from office for supporting high-density affordable housing projects, is ground zero.
Will Fischer, writing for the Center on Budget and Policy Priorities earlier this year, cited how making it easier to build more houses could reduce the upward pressure on prices. He cited Austin, Texas, where a recent building boom reduced prices by 11%.
Also, like many, he notes that tariffs, particularly those on Canada, are increasing the costs of materials.
Cities should reduce barriers to construction without allowing unsafe practices. The economy should improve to a level where interest rates can safely fall. Carefully crafted incentives should be strategically placed to make low-income housing more enticing to developers.
These all are good ideas that may not ever come to pass.
That doesn’t mean we shouldn’t keep trying. It also doesn’t mean a low birth rate won’t eventually change things dramatically, leading to housing surpluses some day.
In the meantime, while we may not expect to ever see 1962 conditions again, we also can’t afford to have today’s generation of young adults develop a cynicism that comes from seeing insurmountable barriers to the things previous generations took for granted.