Over the last few years, there’s been a surge of homebuilding in Utah. Unfortunately, Utah hasn’t been able to build houses fast enough to meet the demand of current residents.
It’s hard to imagine, but Utah is increasingly becoming like California. I remember the day, when a person living in California could sell their small house there and move here to Utah with enough cashed out equity to buy four bigger houses.
Fast forward to today, and everywhere you turn, it looks like home prices are trying to catch up to states like California.
Why is this happening? Where can someone find a home? What can be done about it?
These are all questions that both young buyers and seniors are asking.
As Utah’s only dedicated builder that focuses entirely on creating 55+ communities, we find this trend disturbing as well. We know why this is happening. There are things that can be done about it, but most people don’t want to address those things. Let’s dive into the economics of it.
Why are Utah’s home prices so high?
Not enough houses.
This may surprise some people, but even with all the high-density home projects happening, and all the other development that we’re seeing in places like Lehi, Herriman, Saratoga, and others, Utah is still building too few homes to meet the demands of our growing population.
When there aren’t enough homes to supply an area’s needs, two things happen. First, is that home prices rise. This is great if you already live in a home. The value of your house is appreciating quickly. This is not so great, if you are a first-time homebuyer or if you’re a renter, because the demand for housing is pushing you out of the market.
Why aren’t there enough homes?
There are several different factors that are keeping Utah housing below demand.
- Land available for houses is increasingly scarce. Sure, they’s land. Not all of it is prime for building on, either because it’s meant to be used for commercial projects, or because there is no water and other infrastructure to support houses there.
- When land is available, the neighbors often protest it. We hear more about this all the time. Neighbors banding together and protesting any new development that comes in near their neighborhoods. Almost always, they site traffic as a concern, even when the streets were designed to handle the additional traffic. Really, it’s a form of discrimination. They don’t like to see empty fields turn into more homes, and when they do, they don’t want to see housing that reflects the current needs of our times. Every time neighbors protest these sorts of things, they either delay housing developments or the shut them down entirely.
- Getting new housing developments approved through cities is a long and difficult process. Some cities are better at handing this than others, but some cities, due to lack of coordination or outdated procedures or some other reason, take ridiculous amounts of time to approve a new development. We’ve developed in cities where the process takes little more than 6 months to gain approvals, and then there’s been cities that take between 2 and 4 years! And that’s just here in Northern Utah.
What to do?
For many folks looking to move, they are left with a couple of options. First, is that they fork up the extra money to stay here where they’ve lived much of their lives. The other option is that they do what the Californians did ten years ago, and move to a state that is cheaper to live in.
For many of our homebuyers, this second option is out of the question. Much of their family still lives around here, and they want to be close to family. But if the housing crisis continues, then either seniors will be forced out of the state, or their kids will be forced out.
It takes a mental shift. Like it or not, Salt Lake and Utah counties are turning into bigger cities. If we want to keep Utah affordable, we need to not be afraid of development.
Leisure Villas is doing their part to build quality houses for folks 55 and older. We want to keep you here, where you love to live. I wouldn’t call us a high-density builder either, since most of our communities maintain a density at or below 5.5 homes per acre, but even then, we’ve seen the trend of anti-development groups gang up on home builders like us.
What they’re doing, is inflating their home values, by not allowing anyone else to move in. So while it’s in their best interest to block development in the short run, it ends up hurting our economy in the long run.
I don’t know where Utah will be in 20 years from now, but I hope that we are able to come together to tackle some of these big issues that impact us all.
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