West Haven • In recent years, home prices in the Beehive State rose to become the least affordable in state history and the number of families who experienced homelessness for the first time grew.
Gov. Spencer Cox is trying to flip that trend with what he is calling “a very audacious proposal.”
The governor wants the state to build 35,000 new starter homes in the next four years, he announced Tuesday in western Weber County from a new development where farm fields sprawled a decade ago.
“That’s the number of starter homes that we will need just to meet demand over the next five years,” Cox said.
That goal is the “centerpiece” of his fiscal 2025 budget and relies on a series of proposals that will have to get legislative approval during the upcoming session that starts in January.
“The fact is, the single greatest threat to our future prosperity, the American dream and our strong communities is the price of housing,” Cox said. “Our kids will never be able to call Utah home if we don’t start building starter homes again.”
The median home price in Utah hovers around $500,000 — about $50,000 less than the homes Cox stood in front of Tuesday when announcing his budget proposals. Cox said the area was one of the few places in the state he could find new builds that would qualify as starter homes.
According to the University of Utah’s Kem C. Gardner Policy Institute, Utahns need to make $150,000 annually to afford the mortgage payment on a median priced home. Only 15% of renters in the state make enough money to buy a home on the lower end of the spectrum, priced between $300,000 and $400,000.
“Imagine a world where an entire generation of people never have the opportunity to own a home,” Cox said. “What does this state look like 50 years from now when a generation of Utahns never get that opportunity? Think about wealth creation, about retirement.”
(Rick Egan | The Salt Lake Tribune) Gov. Spencer Cox talks to reporters after announcing the housing affordability portion of his budget in West Haven on Tuesday, Dec. 5, 2023.
Dubbed “Utah First Homes,” Cox’s budget proposal includes adding another $50 million to the First-time Homebuyers Assistance Program created by the Legislature last session. The program gives new buyers access to as much as $20,000 to help with a down payment or closing costs, but the funds can only be used toward a “newly constructed but not yet inhabited home” that doesn’t cost more than $450,000.
Much of the $50 million allocated to that program last year hasn’t been spent yet, Cox told reporters, because there aren’t enough newly built homes to buy. To boost construction, the governor is also proposing adding $75 million to the State Infrastructure Bank to bring down the cost of new developments.
To make the 35,000 homes more accessible to low- and middle-income Utahns, Cox also wants to expand “sweat equity” programs — which allow buyers to do manual labor to reduce their down payment — and community land trusts. The latter allows people to purchase homes without owning the lot they’re built on, drastically shrinking the cost.
Under Cox’s plan, Utah would establish a Starter Home Innovation Fund with $5 million to incentivize finding solutions to the state’s housing affordability crisis. The governor also wants to use existing programs — like tax credits — to recruit an off-site home manufacturer to the Beehive State to offer another low-cost housing option.
While some of the new homes will certainly include condo units and town houses, Cox said the state needs to “get the government regulation piece of this right” to “see many, many more single-family detached starter homes.” He will also likely need to work with the Legislature to implement other desired restrictions on the programs, like preventing corporate entities from using the homes as an investment and purchasers from using the properties for short-term rentals.
“Just a message to our mayors and city council members out there, and to the to the good people of Utah: we all, every single one of us, needs to be involved in making this happen,” Cox said. “I know every city is different, every city is unique. Some cities are mostly built out, but there’s infill opportunities within those cities.”
Housing affordability varies widely throughout the state and demand is highest near urban centers, where most jobs are located. In order for the state to achieve the goal of 35,000 new homes, it will likely need the help of pricier locales in and around the Salt Lake City metropolitan area.
Cox has taken aim at municipalities that aren’t willing to come to the table to solve the housing crisis before, saying at his October monthly news conference, “You’re not unique and you’re not different. You have to find more supply and you have to do it quicker.”
In a meeting with The Salt Lake Tribune editorial board Monday, mentioned the potential need to incentivize cities that make space for affordable housing.
“I hope that there will be a little less NIMBY (not in my backyard)-ism around around these neighborhoods where there are starter homes for our kids and grandkids,” Cox said Tuesday. “Every single one of us started in a place like this.”
Another challenge for the Cox administration could be getting developers on board with the governor’s plan. As Cox pointed out at the news conference, large homes and rental properties, such as apartment buildings, are often more profitable for builders.
To help overcome those barriers, Cox appointed former state lawmaker Steve Waldrip as his housing innovation adviser. Waldrip has overseen real estate development himself and has also worked as a consultant in the industry.
“We’re asking [developers] not to lose money, but potentially not to make as much money and to still be profitable, but not to maximize profit to the detriment of our state,” Waldrip said. “And I think that’s an ask that is not hard for me to make, to say this is for the benefit of our community.”
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