Though being squeezed by high gas and grocery prices, one of the biggest challenges faced by Utahns is that of housing affordability.
“Salt Lake City is becoming increasingly more challenged. Demand is increasing, and supply is not keeping pace, says Matt Schwartz, CEO of Domain Companies. “It’s becoming difficult to create housing in Salt Lake given where costs are going, both construction and operational. Interest rates are also rising, and capital is becoming more scarce—that supply and demand imbalance is growing and impacting affordability levels,” says Schwartz.
Those in Utah are undoubtedly familiar with double-digit compounding increases in both home prices and rents over the last few years, he says. However, external factors outside of housing driven by inflation— such as general costs of living, when people can find housing, the location of said housing, and the proximity to transportation—have made the affordable housing situation even more difficult to address.
Producing more affordable housing is one solution, says Schwartz, but doing so is a challenge in any urban environment for a variety of reasons. Ramping up production in the affordable sector is a place to start, but producing more homes in all housing types is the ultimate solution. “But you need to drill down how to make that happen,” he says. “I think [it all] boils down to creating public/private partnerships that produce housing, and the volume necessary that meets the criteria—those are essential to making that work.”
The importance of these partnerships to sustainable development
One example of a good public/private partnership is The Exchange, a Domain Companies project which utilized tax-exempt bonds and housing tax credits. “We worked with the state to make those programs work in a way that we were more friendly to mixed-income,” says Schwartz. That project didn’t have tax incentives per se, but it was built on city land, so there was a subsidy. Schwartz mentions how projects like these provide another avenue for cities to pursue in terms of affordable housing and creative reuse. The site of The Exchange, for example, was previously unused until the Domain Companies got involved.
Schwartz says cities and states need to think about how to create more programs, like the one The Exchange used, that are programmatic and meant to be scaled. “If housing is really going to be produced in a volume, [more public/private partnerships] would move the needle in terms of impacting affordability positively.”
Additionally, Schwartz says that developers have a responsibility toward the communities they serve and how they go about creating their products. The product they create makes up the landscape of communities—developers need to consider that and their impact, which starts with the quality of architecture and planning.
“People want to live in buildings they know are healthy and sustainable, but it’s the right thing to do and the right way to go about doing what we do."