A recurring complaint from residents opposed to new apartments in their neighborhoods of single-family homes is that high-density housing brings down property values.
The opposite appears to be true.
Homes in Salt Lake County located within a half-mile of a newly constructed apartment building rose by 10% in median value per year between 2010 and 2019, University of Utah researchers have found. Those farther away rose by 8.6%.
Homes closer to multifamily housing also had an 8.8% higher median value per square foot than those beyond a half-mile away, even though the houses tended to be slightly smaller in size, about seven years older on average and had smaller lots, according to a new study by the U.’s Kem C. Gardner Policy Institute.
That pattern held true countywide in a decade of rapid price acceleration in Utah’s most populated county and in three of four subregions, the only exception being its southeastern suburbs — Midvale, Cottonwood Heights, Sandy and portions of Draper — where home values farther from new apartment construction appreciated slightly faster.
“While many stereotypes and generalizations about negative impacts are brought up in public settings,” the U. study states, “high-density development does not actually appear to depress home values.”
The findings, released Monday, come at a time of intense demand for housing along the Wasatch Front, especially in Salt Lake County, and a dire shortage in the supply of homes. Those trends have shifted construction patterns since 2010 toward more density, including apartment complexes, town homes and condominiums.
These movements have spurred “not in my backyard” opposition in many communities, with neighbors complaining that denser housing would lower their property values, among other concerns over impacts such as traffic, water, school capacity, quality of life and other growth-related worries.
Salt Lake County Mayor Jenny Wilson, a self-described proponent of higher-density development, welcomed the study’s findings, saying they contributed “to a better toolbox for communicating with neighbors concerned about these issues.”
“The data helps us weed out what is perhaps a nonissue,” Wilson said Monday of property value worries. The study’s results, she said, will also help to inform better decisions on future development, especially as available land on the Wasatch Front continues to shrink.
“We have to build differently,” said the mayor. “We will continue to have multi-acre parcels, and we will continue to have suburban feel in our community. But we also have to be smart about where and how we build, and we are going to need to embrace density in our communities.”
Dan Lofgren, with the Holladay-based development firm Cowboy Partners, also called the results “encouraging” as government officials and the private sector grasp for policy approaches that may ease Utah’s shortage of affordable homes.
“It pulls back one of the blanket assumptions about both density and the renting lifestyle,” Lofgren said, “that the occupants of those rental apartments and the density are somehow harmful to the community.”
Monday’s study, conducted in partnership with Salt Lake County planners, is at least the second published in recent months by the policy think tank aimed at dispelling community resistance to housing density.
Researchers published a set of “best practices” in December, encouraging, among other strategies, the practice of rezoning land within municipal borders to allow for new kinds of higher-density development.
The institute’s work on Utah’s housing gap, backed by the Salt Lake Chamber, has highlighted what experts and elected leaders on Capital Hill say is a shortage in Utah of at least 53,000 homes affordable for the average wage earner.
“The challenges of housing affordability are not going away anytime soon,” senior research fellow at the Salt Lake City-based institute Dejan Eskic writes in the latest study. “While density is a solution to alleviate costs, zoning is the mechanism that allows or denies it.”
The new analysis of property records over the 10 years since the Great Recession — and several similar studies nationally — indicates denser development either has no impact or actually boosts single-family residential values.
The likely driver, according to the U. paper: “New apartment construction brings new demand and new dollars to a community and redevelops an older piece of property, thus bringing more vibrancy and ‘buzz’ to the area.”
A Virginia Tech University study with like conclusions suggested new apartment construction served as a sign of economic growth; increased an area’s pool of future homebuyers; and often brought mixed-use development to a neighborhood, with new amenities.
Other research cited in the Gardner Institute study indicates that boosting housing density reduces traffic instead of increasing it, since apartment and town home dwellers typically own fewer vehicles. Traffic concerns often rank high among concerns from existing neighbors near controversial residential developments, including Olympia Hills near Herriman.
While also heralding the study’s findings, Matt Dahl, Midvale’s assistant city manager, said that pointing to modest yearly price gains for houses close to apartments may do little to assuage concerns of existing homeowners over other impacts.
“It’s hard for residents to feel that their home value is appreciating 1.4% faster than people who live in a different neighborhood,” Dahl said. “But they do feel it when there’s more traffic or parking on the road, even if that traffic or parking is well below the capacity of the affected street.”
Dahl said the study may serve to “change the conversation” and steer the public focus more squarely onto ways to improve access to affordable housing and transportation.
The U. study reviewed data on homes in what are Salt Lake County’s longest established suburbs — in Salt Lake City, South Salt Lake, Millcreek, Murray and Holladay — as well as those in southeast, southwest and western corners of the county. Apartment construction has surged across all those areas since 2010, with at least 7,754 new units built.
Yearly price increases for homes within a half-mile of new apartments were between 2 and 3 percentage points higher than for those father away, except for southeast Salt Lake County, where homes farther away rose in price by 7.3% a year as opposed to 6.8% for those closer.
Homes in southeastern areas that were near apartments also tended to be closer to large retail developments than in other regions, which researchers said may have affected their price appreciation.