Wednesday, September 11, 2024
Affordability
Urban Living
Posted By Babs De Lay on September 11, 2024, 4:00 AM
Utah's housing supply is still facing several challenges with not too much hope in sight. Housing supply drives affordability, so like any commodity, when the supply is low, prices are high. Housing production in Utah has been declining for years, from 37,000 housing starts in 2021 to 19,000 in 2023. Estimates for 2024 suggest that we won't beat 2023's numbers.
Why, why, why is this happening?
Labor shortages: Builders say that labor shortages are a major factor in the lack of new homes. Damn. After the hottest summer on record, who is seeking out roofing jobs, exterior painting, window installs and the like?
Land prices: High land prices like we've never seen before.
Zoning laws: Municipal zoning, fees, and regulations make it difficult to build new homes.
Home prices: Home prices in Utah are high and wages are not keeping up with housing costs.
Housing affordability: Utah is trending as one of the least affordable states to buy a home.
In an attempt to increase the supply of "attainable" homes, the Utah Legislature created tools to encourage new home prices around $350,000 to $450,000. HB572 allows for the Transportation Infrastructure General Fund to create a three-year program to offer low-interest loans to developers building affordable housing developments in the state by allowing the state treasurer to tap into $300 million from the state's already existing funds.
Sadly, the $350,000-$450,000 price range is rare along the Wasatch Front, and according to the Wasatch Front MLS there are only 1,290 homes listed for sale statewide under an offering price of $450,000: 139 in Salt Lake County; 62 in Davis County; and 75 in Utah County. Summit County has 8 homes offered under that price point, with 6 in Wasatch County and 96 in Washington County and the St. George area.
This summer, U.S. Treasury Secretary Janet Yellen unveiled several housing proposals, including a $100 million fund for community development financial institutions to assist in financing new housing projects, and a plan to reduce the costs of state and local housing finance agencies that would allow them to borrow federal money at the same rate as the federal government, to help fund more FHA loans.
Yellen called on the 11 federal home loan banks to devote 20% of their net income to housing programs around the country, to help with down payment assistance for buyers as well as getting loans to developers.
We've got about two months until the presidential election. The two major candidates have vast ideas about solving the U.S. housing crisis. Both believe state and local regulations are what cause prices to rise and each are touting fixes like offering tax credits of $25,000 for new homebuyers and getting millions of federal dollars out into the communities struggling most with affordability.
If you think affordable housing is an important issue, please vote this November. Register to vote at: https://secure.utah.gov.
About The Author
Babs De Lay
A full-time broker/owner of Urban Utah Homes and Estates, Babs De Lay serves on the Salt Lake City Historic Landmark Commission. A writer and golfer, you'll find them working as a staff guardian at the Temple at Burning Man each year.
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