This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.
Walk around downtown Salt Lake City and it can be hard to believe Utah is in the midst of a housing shortage.
New luxury apartment towers dominate the landscape and they all seem to be advertising open apartments ready to lease. If the theory of supply and demand holds true — doesn’t that mean renters in SLC should be feeling some relief soon?
The answer is: Sort of.
If you want to learn more and better understand the strange rental market landscape we’re in right now, The Salt Lake Tribune, in partnership with the Kem C. Gardner Policy Institute, is hosting a community forum on this topic at the Thomas S. Monson Center in Salt Lake City. In-person attendance registration is no longer open. But a livestream function is available here, from 8 a.m. to 9:30 a.m. on Thursday, April 6.
There has been a boom in rental housing construction in downtown Salt Lake City and thousands of new apartments will be completed and available this year, bringing a bit of relief to renters, explained Dejan Eskic, senior research fellow at the Gardner Institute.
“We had a lot of momentum with construction,” Eskic explained. But as the federal reserve continues raising interest rates, developers “took a pause.”
That means the relief coming to some parts of Salt Lake City may be temporary as the population keeps growing. “I still expect our housing shortage to worsen,” Eskic said, “because this year we’ll have 40% less units than we built in 2021.”
A policy brief published by the Gardner Institute in February noted that in the last five years “rental rates grew twice as fast as renters’ income.”
Adding to that pressure? Families and individuals who want to exit the rental market and buy a home might not be able to right now.
Luann Lakis, a realtor with Keller Williams Utah in Salt Lake City, has been working in the sector for the past 33 years and says she has “never seen a market like this.”
“There are fewer buyers for homes over a certain price range,” Lakis said, but home prices still remain stubbornly expensive and finding a single family home for under $500,000 is a challenge.
“It is hard to buy a house and it didn’t used to be that way,” Lakis said. “And I don’t see anything easing up much because people are moving to Utah, along the Wasatch Front, because there are good job opportunities here.”
Although there are plenty of problems with housing affordability in Utah, some solutions are in the works.
This past legislative session Utah upped its contribution to a federal low-income housing tax credit program incentivizing developers to build more affordable housing. Lawmakers also allocated funds to help first-time home buyers with down payments. Salt Lake City is providing developers with $8 million in low-interest loans to build eight different projects that will include rent-subsidized housing.
Plus, Eskic said, the more expensive luxury rentals coming online could entice higher-income earners to move and open up spots in buildings with fewer amenities, but more manageable rental rates.
“There is a freeing effect,” Eskic. And hopefully, “we all move up a little bit.”