Utah’s housing crisis may be more about shrinking paychecks than a shortage of homes.
As state lawmakers met Tuesday in advance of spending millions of pandemic-relief cash to encourage more affordable housing construction and other projects, a top analyst told them that a lack of supply isn’t the Beehive State’s most pressing housing issue and urged them to look also at ways of boosting incomes for Utah’s working families.
“We can’t build our way out of this,” David Fields, housing economist with the state Department of Workforce Services, testified on Utah’s Capitol Hill. “The housing market is more nuanced than the perceived condition of a housing supply constraint.”
When adjusted for inflation, median incomes in Utah have stayed all but flat since 2002 even as its economy has often thrived and expanded. At the same time, homes prices and prevailing rents climbed steadily skyward, Fields said, fueled in part by investors’ speculative buying in Utah’s residential markets.
Those combined trends have created what he called “a growing wedge” that is forcing residents to spend ever-larger shares of their pay on housing costs. And that widening chasm between the cost of available housing and what folks can actually pay is the underlying driver behind Utah’s current housing predicament, said Fields, not an actual lack of homes and apartments.
Data suggests the shrinking income crunch transcends lines between urban and rural Utah, Fields said, with large shares of Utahns shelling out 50% or more of their incomes on housing costs, defining them as “severely” cost-burdened.
“No matter where you go, there is a significant percentage of the population that are having housing insecurities due to housing not being affordable, even though there are a lot of vacant units and excess supply,” he told members of Utah House Political Subdivisions Committee.
Fields said that programs such as rental assistance, eviction limits, more generous unemployment benefits and low-income subsidies for child care and medical costs might help make Utah’s housing picture more equitable.
He also suggested ways of stabilizing renters who are struggling to keep up and living-wage laws that guarantee incomes for workers are adequate to meet basic living costs.
Utah lawmakers have a long history of opposing living-wage measures and have declined several times in recent years to consider bills raising the state’s minimum wage, including one that stalled in February to boost it to $15 an hour from its current level of $7.25 an hour.
Fields’ message drew instant skepticism Tuesday from several members of Republican-dominated Legislature, after years of discussion focused on what researchers say is a gap of 50,000-plus affordable homes in the state’s existing inventories.
“What you’re saying is just not true on the availability of housing stock,” said Rep. Calvin Musselman, R-West Haven and a real estate sales executive. He noted that home listings were currently being snatched up within five days of going on the market, down from 26 days less than a year ago.
“In 25 years, that is beyond anything I’ve ever seen, ever,” Musselman said. “The idea that there’s this overflow of vacant houses out there, it’s just nonexistent.”
He also pointed to rock-bottom vacancy rates in large apartment complexes across the state. “There’s a waiting list there, too,” the lawmaker said.
Rep. Matthew Gwynn said the state’s policies spurring economic growth and job creation and enticing new employers to relocate in Utah needed to also guarantee their workers’ incomes will grow.
“It is the policies we have in place now that are setting this up to be a problem,” said Gwynn, R-Farr West.
Housing advocates in Utah long have argued that incomes are not keeping pace with rising housing costs. But several also disagreed with Fields’ assertions, noting historically tight housing inventories in Salt Lake City, which saw the single largest decline in available homes for sale in December of any large U.S. city.
Homebuilders, meanwhile, have launched record levels of housing construction this year in hopes of expanding the housing stock, although escalating building costs, a lack of land and shortages of construction workers make it difficult to produce affordable homes.
James Wood, senior economist with the University of Utah’s Kem C. Gardner Policy Institute, said Utahns at lower incomes are the worst hit by the current housing pinch, leaving them one crisis away from homelessness.
“Those folks, you know, every day it’s a pitched battle for them with housing insecurity,” said Wood. “Anything happens — a medical event, auto accident, domestic violence, you know, they’re just in big trouble.”