How To Solve The Housing Crisis In Utah
There’s no doubt about it: housing has become quite the hot button topic throughout our state. According to the Housing Gap Coalition, Utah currently has more households than available housing units. And those available housing units are ever increasing in value, making them unaffordable to a percentage of the population. This has led many to speculate that the next generation will face a bonafide housing crisis.
According to Mary Street, an executive vice president and associate broker at Colliers International, the housing issue is not as simple as saying there aren’t enough homes. To her, the housing shortage is actually a shortage in housing that is attainable, affordable, and desirable. If we’re going to build a strategy to ensure the next generation has access to homes, we need to keep those things in mind.
And though there are definitely steps our state needs to take to support a growing population, many of those steps will be positive ones. After all, we can’t expect to keep doing the same thing, generation after generation. Our environment is changing, and the individuals who live in that environment are changing. Here are a few things Utah’s housing market needs to do to support our state’s population growth.
Build Desirable Homes By Planning For The Next Generation
When I got on the phone with Ms. Street, she told a haunting tale. Recently, a woman in front of her at a grocery store was complaining to a friend about her daughter. She said that she had helped her daughter buy a beautiful home, only to find that her daughter took no pride in it. She never weeded her flower beds, and so the mother had to go over to her daughter’s home and weed them herself.
According to Ms. Street, this is exactly the sort of cautionary tale the housing conversation needs to consider going forward. Millennial and Z generations have very different desires than their Baby Boomer parents. They don’t want large homes in suburban housing developments with expansive yards that they’re left to water and weed. They want small homes near friends, restaurants, and yoga studios. They want high-speed internet and access to open space. And they definitely don’t want to spend time weeding their flower beds.
As Ms. Street says: “It’s my dream to have a garden. Not my kids’ dream.”
I have to agree. When my husband and I moved from the Bay Area four years ago, it wasn’t that we couldn’t find a home, it was that we couldn’t find a home we wanted to buy. We weren’t looking for square footage, a cookie cutter housing community, or IKEA kitchens. We wanted to walk to good restaurants, to be able to ride our bikes to trails from our home, and to have a dishwasher (we didn’t have one in California). Ultimately we found a home we love in the 9th and 9th neighborhood, within walking distance to restaurants, yoga studios, and Liberty Park. And we’re planning on installing an artificial lawn next summer.
Build Attainable Homes By Considering The Psychology Of Today’s Home Buyers
“It’s not just a supply and demand question,” Ms. Street says. Supply and demand economics, she says, assume that if we increase supply, prices will go down, thereby allowing more houses to become available at more affordable rates and solving the housing crisis altogether. But that also assumes buyers are going to make logical decisions. And that’s not always the case.
People who grew up during the Great Depression, she says, developed a number of psychological quirks. They became frugal, they bought things with cash and avoided taking out lines of credit or investing in the stock market. The millennial generation too has their quirks, they grew up during the Great Recession.
“The largest group of people entering the housing market are the millennial generation,” she says. “And the millennial generation has seen several good curves in the economy.” Not only did they see the country at a time of financial crisis, but they also saw the bounce back from that crisis. They were able to attain good, high paying jobs. They’ve experienced wage increases and a time of great financial prosperity, and that has affected the way they buy homes.
Build Affordable Homes By Getting The Local Government Involved In The Conversation
Robert Vernon is the CEO at the Provo City Housing Authority, and he’s dealing with a similar conundrum. “Developers will build as big and as expensive as they can,” he says. Because they can make more money on a million dollar home than they do an $80,000 home, the market has become driven toward more expensive homes.
The same concept has driven up rents. “[Apartment buildings] require investors, and those investors expect a certain return… If they build an 80-unit complex and charge $1,200 a unit, returns are going to be much higher than if they charge $1,000 a unit.” Because of this, more than 125,000 households spend 50 percent of their income on rent, leaving little remaining for food, vehicles, or children.
The only way to change that, Mr. Vernon says, is to make up for that $200 gap at the state or city level. Zoning requirements can help by limiting lot size, thereby causing homes to be smaller, and prices to be lower. Housing vouchers, tax breaks, or incentives can also help fill the gap between what developers would make at a market rate, versus what they would make below it.
And maybe it wouldn’t be a bad idea to get the younger generation involved in those governmental decisions. According to Ms. Street, there’s a big disconnect between the generation that’s enacting housing legislation, and the generation that’s actually buying the housing. “The folks who are most impacted by this shortage will have to weigh in. They’re going to have to run for city council. They’re going to have to volunteer in their communities and give counsel about what it means to make good, healthy communities. Because as long as we have a debate between one generation’s perception of what’s desirable, and what the generation entering the market actually want, it will never work. You can’t just build more units and solve it.”