There’s a ticking time bomb in Utah that, if left unchecked, threatens to demolish the state’s economic vitality.
It’s the affordable housing crisis, the depths and severity of which were illustrated in shocking detail in a report last week by James Wood, a housing economist at the University of Utah’s Kem C. Gardner Policy Institute.
It’s a problem that has compounded year after year, becoming so severe it is perhaps the most dire threat to Utah’s continued growth.
For example, since 2011, Wood wrote, the number of households has risen nearly 50 percent faster than the number of new housing units, with roughly 111,500 units for 162,300 households.
The rental vacancy rates across the Wasatch Front are at, or near, 10-year lows, as is the supply of new homes.
The scarcity means Utah has seen the fourth-highest increase in housing prices in the United States, more than twice the rate of neighboring states like Nevada and New Mexico.
Reporters are notoriously bad at math, but even I can see that, if we stay on that trajectory, the situation is bound to get much, much worse.
In fact, a child born today could realistically see the median housing price as high as $1.3 million by the time he or she is in the market to buy a home.
“This is probably the one topic that no one is talking about that is really our biggest economic threat,” Abby Osborne, the vice president of government relations for the Salt Lake Chamber, told my colleague Mike Gorrell. The Chamber commissioned the study.
Salt Lake City and Salt Lake County have been grappling with the shortfall and getting some results by incentivizing affordable housing projects.
Salt Lake City Mayor Jackie Biskupski has developed the city’s first housing plan in years and has proposed a half-cent sales tax increase with the proceeds earmarked to affordable housing, transit and infrastructure projects.
Salt Lake County Mayor Ben McAdams can rattle off a series of housing projects the county has partnered with during his tenure — 258 units in South Jordan, 136 units for low-income seniors, special projects aimed at people with behavioral or mental health needs, or women needing refuge from abusive situations.
“We’re doing a lot … but it’s obviously a drop in the bucket when you’re looking at a 48,000-unit unmet need,” he said. “All the work we’re doing means it’s getting bad more slowly.”
The budget bill recently passed by Congress contains one of the first increases in affordable housing spending in years and, in the near future, federal funding could begin flowing to projects in state-designated “opportunity zones.”
But it’s going to take state leaders and state resources being brought to bear to solve the problem.
“We’re in a huge crisis and we need to start thinking about housing as infrastructure,” said Tara Rollins, executive director of the Utah Housing Coalition. “We need to have the state start investing in housing. That’s the only way we’re going to be able to jumpstart this.”
Other states pump millions into affordable housing, she said, but Utah has typically only put about $2 million toward such projects.
In the recent legislative session, Rep. Joel Briscoe, D-Salt Lake City, proposed having the state borrow $100 million to invest in affordable housing projects, but the hefty price tag kept it from passing.
But that’s the kind of big thinking needed at the state level.
“We’ve been short units for so long it’s hard to catch up,” Rollins said.
The hole is so deep that building out of it will only get you so far; you have to grow your way out, too, and that means looking at labor-friendly policies to drive up Utah’s historically low wages.
For decades, Utah’s strategy has been one of fostering a business-friendly environment to the point that it has been negligent and even hostile to workers. Nationally, but also in Utah, high-income executives have seen their wages grow robustly, while middle- and low-income workers have slogged along with stagnant pay.
Over the past 26 years, Wood found, housing costs in Utah have grown nine times as fast as wages. The high prices and likelihood of higher interest rates in the near future will price middle- and low-income Utahns out of the housing market.
That means looking at minimum-wage increases; promoting paid family leave and child-care subsidies that could help families — and women in particular — stay on the job; incentivizing worker retraining and education; and fostering competition in the workplace by ensuring portability of insurance and getting rid of noncompete clauses.
And the state could stop or even roll back some of the steps it has taken to discourage unionization and collective bargaining for workers.
Even with aggressive steps, we are likely looking at years of scarce housing and higher costs. But hopefully Wood’s report drives home the point that the price of failing to act will be far worse.