Utah’s housing shortage already had the state on a troubling trajectory. Then the pandemic hit and accelerated prices even more, putting the state on the map as one of the nation’s hot spots for homebuyers.
The year 2020 remains Salt Lake County’s top year for home sales, and 2021 was a historic year for home price increases. As 2022 heads into spring, housing experts have warned rising interest rates are likely to only slow price growth, not stop it. That means even more Utahns will likely be priced out of the market.
Thus, housing affordability is one of the biggest issues facing the Beehive State. So what should be done about it?
Should state and local governments act? Or should the market be left to sort itself out?
Utahns have wide-ranging opinions, with answers that run the gamut — from rent control to doing nothing — but no one stand-out solution, according to a new Deseret News/Hinckley Institute of Politics poll.
The survey showed Utah millennials are more inclined to favor passing rent control laws at the state or local level (unsurprisingly, considering many older Utahns likely bought their homes years or decades ago when prices were far lower). Those who identified as “very liberal” also favored the rent control option more.
On the other hand, those who identified as “very conservative” had more of a tendency to favor the “do nothing” option.
Here’s how the results broke down:
- Sixteen percent of Utahns said zoning restrictions should be adjusted to make it easier to rent out parts of their home, like their basements or spare rooms. (The Utah Legislature did pass a law aimed at this in 2021, HB82, which prohibits cities from restricting certain accessory dwelling units with some exceptions.)
- On the other hand, 15% say state and local governments should do nothing and let the free market play out. The most support for this came from those who identified as “very conservative,” of which 23% picked “do nothing.”
- Another 15% say zoning restrictions should be adjusted for manufactured housing, tiny homes and other nonconventional construction methods in order to build homes more quickly.
- Another 15% said Utah should expand funding to subsidize low-income housing. (The Utah Legislature over the past two years has approved a record amount of funding for housing and homelessness programs, including about $50 million in 2021 and another $70 million this year, though housing advocates have said it’s still far from enough.)
- What about rent control? That’s an option favored by 13%.
- As for more high-density, high-rise residential development, 7% picked that option.
- Only 5% said state and local government should adjust zoning restrictions to allow for quicker construction.
- Thirteen percent answered “other.”
The poll of 804 registered voters across Utah was conducted April 5-12 by Dan Jones & Associates. It has a margin of error of plus or minus 3.46 percentage points.
So clearly Utahns’ answers are all over the place on what to do about housing costs — and to Senate President Stuart Adams, R-Layton, that’s indicative of the complexity of the problem.
“The reason we have so many different answers is because it is such a difficult and complex issue, and there doesn’t seem to be one obvious solution,” Adams said. “If there were we probably would have done it a long time ago.”
Favoring the free market
Adams, who is also a partner in the real estate and construction firm Adams Company, said over-subsidizing housing “actually create(s) more demand, which makes prices rise.” So the solution, he said, is to rely “on the free market” while also upping inventory to relieve demand pressures, whether that’s letting more people rent out their basements or helping developers get their subdivisions approved faster.
“Trying to streamline the regulatory process, I support. Trying to reduce the regulations, I support. And it sounds to me like the public’s really keyed in on that,” Adams said.
Adams, along with most of Utah’s Republican-controlled Legislature, has not been receptive to rent control proposals.
“Those types of controls have been tried in different (cities) and they’ve all, it seems like, created more problems than solutions,” Adams said. “The best rent control is to have too many (units). And that drops the price really fast.”
Local solutions
Housing experts have said zoning issues — as well as combating NIMBYism, the “not in my backyard” mentality — are a needed piece of tackling Utah’s housing shortage and affordability issues.
James Wood, the Ivory-Boyer senior fellow at the University of Utah’s Kem C. Gardner Policy Institute, and Dejan Eskic, senior research fellow at the Gardner Policy Institute, wrote in a 2018 report there are some “municipal measures” that can be taken to help Utah’s housing shortage. Those included:
- Waive or reduce fees for affordable housing.
- Adopt inclusionary zoning that provides a wide range of housing types and prices.
- Adopt accessory dwelling unit ordinances.
- Exercise restraint in impact and permit fee increases.
- Change building codes to encourage more affordable housing.
- Explore new funding models and public/private partnerships for affordable housing.
- Facilitate in-fill development.
- Target more transit-oriented development projects for very low income households.
However, Wood and Eskic acknowledged in their report many of the causes of housing price increases are “beyond the control of policymakers. Labor shortages, Wasatch Front topography and material and labor costs are three of the most important causes unrelated to public policies.”
“But one potential source of cost control,” Wood and Eskic wrote, “is the policies and ordinances of local government.”
Utah’s housing crisis has been top of mind for cities and counties across Utah, especially as it’s sharpened in recent years, said Cameron Diehl, executive director of the Utah League of Cities and Towns.
He said the poll results validate that Utahns “recognize that housing policy is complicated, that state and local government have very little influence over market forces that drive up the cost of housing.”
“There’s no real consensus about what we have to do, and that’s because there is no silver bullet,” Diehl said, “because of market forces and because every community is unique.”
Diehl said there are “limited tools that cities have to address housing,” and yet Utah cities over the past three years have permitted more housing units than any other three-year period in their history.
“We are seeing unprecedented amounts of new housing permitted,” he said, noting last year cities permitted a record high of more than 40,000 new housing units. A majority of those, he said, are multifamily.
“Now, density doesn’t equate to affordability,” Diehl acknowledged. “But it’s interesting that you’re seeing more multifamily housing built than ever before in state history, yet we still have all these market pressures and challenges.”
The underlying issue of the housing shortage is Utah’s population growth, Diehl said. Utah was the fastest-growing state in the nation from 2010 to 2020, and in recent years it’s been seeing an uptick in in-migration. Still, in-state births remain the biggest contributor to Utah’s population.
“So really the bigger question is how do we as a state and as a government, as well as private sectors and residents, work together to plan for population growth?” Diehl said.
A survey conducted by Envision Utah earlier this year found Utahns are more concerned about growth now than they ever have been in the state’s history. This year, Diehl said the league was “successful” in working with the Utah Legislature and Gov. Spencer Cox to fund a statewide engagement strategy on growth.
“To me, that’s really the bigger issue here. What is Utah going to look like five, 10, 20 years from now? ... Housing is a piece of that,” Diehl said. “How do we collectively work together planning for growth in a way that plans for a variety of housing types ... but preserve (Utah’s) quality of life?”