Closing the Gap: Coalition Anticipating Housing Crisis That Affects ‘Every Industry, Every Profession, Every Generation’

BY ABBY OSBORNE

A serious gap faces Utah homeowners: the number of families or individuals needing housing and our supply of housing units available. This is not just a housing issue; it affects every industry, every profession, and every generation. Utah’s economy, and even our quality of life, is at stake.

  • Enter the Housing GAP Coalition, an alliance spearheaded by the Salt Lake Chamber that brings the brightest minds of business, academia, and government together to preserve housing affordability in Utah’s growing communities. By providing a variety of housing types across the Wasatch Front, we can keep the American Dream alive for Utahns of all income levels. The ultimate goal of the Housing GAP Coalition is to close that gap between the number of housing units available and total households.

    “Housing affordability is our state’s greatest unaddressed economic threat,” said Steve Starks, Housing GAP Coalition chair and president of Utah Jazz and Larry H. Miller Sports Entertainment. “That’s why it is so imperative that the business community leads the way in addressing this threat head on, just as we’ve found success in coming together to tackle other important community issues.”

    To address this economic threat, the Chamber commissioned a landmark study through the Kem C. Gardner Policy Institute, “What Rapidly Rising Prices Mean for Housing Affordability,” to better understand the seriousness of this housing gap and provide actionable steps toward solutions.

    According to this study, Utah has added four new households for every three new housing units since 2000. This represents a strain on all three housing

  • markets: rentals, existing homes and new construction.

    Not only is the gap between the number of housing units and the number of households growing, but the price of the median household has also seen exponential growth since the 1990s. For instance, the value of a $125,000 home in Utah in 1991 increased to $347,000 by 2017 — placing Utah fourth in the nation in housing price increase since 1991.

    The state’s relatively low cost of living has always been an economic advantage of living, working and operating a business in Utah. However, Utah’s home prices have already surpassed neighboring metropolitan centers by 20 percent. In fact, the typical Utah family may spend 50 percent of its income on housing in the next several years. This means families are struggling to find affordable housing at a reasonable distance from their workplace — and eventually get priced of the market.

    Hikes in housing prices stem from a variety of factors — from land constraints, local zoning ordinances and NIMBY (not in my backyard) mindsets, to rising costs in construction, labor and materials. Although Utah has ranked first in both economic and population growth since 2010, the construction labor force has experienced demographic changes, constraining the labor force while the demand for construction increases.

For the first time in 40 years, there are more Utah families than homes. Since 2011, the number of households in Utah has increased by 158,100, but only 114,600 new housing units have been built, leaving a shortfall of some 43,500 dwelling units. This housing gap is likely to expand in the next few years.

  • If this upward trend remains unchecked, Utah is on track to experience a housing crisis — much like San Francisco, San Jose and Seattle — in 2044. A median sales price of a home would be more than $700,000.

    The time to act is now … before it becomes a crisis. While aspects of the gap are difficult to change, the most impactful place to start is the local level.

    The Housing GAP Coalition is taking action by visiting city councils around the state and presenting the report’s findings, educating about the importance of planning for future growth and urging the passage of a resolution showing their commitment to address this issue.

  • Municipalities can start doing their part by evaluating general plans, moderate income housing plans, permit fees and lot sizes. The Coalition is also creating an impactful public awareness campaign to inform the public on the ominous crisis and pioneering the Build to Success program with the Ken Garff Foundation to encourage high school students’ interest in the potentially lucrative construction and labor trades.

    The business community knows that when we come together to openly discuss the issues affecting us all, we can find common ground and build solutions together — to close the housing gap, and hopefully build a better future for the State of Utah.

Abby Osborne is vice president of public policy and government affairs for Salt Lake Chamber.

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