High demand creates tightest rental market in the history of Salt Lake County
Sandy — The Utah Apartment Association says demand for apartment units is at an all-time high, with overall vacancy rates below 2 percent.
“People cannot find places to rent,” says Paul Smith, executive director of the Utah Apartment Association. “In some cases, renters are giving notice to leave and then asking their rental operators if they can extend their stay because they can’t find a new place to live.”
According to a report released in earlier this month by the Kem C. Gardner Policy Institute at the University of Utah, the Salt Lake County rental market has approximately 148,500 rental units, and only 3,000 units are vacant.
The high demand for rental units has pushed rental rates skyward. The average rent in Utah for a two-bedroom unit climbed to $1,710 in February according to Rent.com. In Salt Lake City, the average rent for a two-bedroom unit increased to $2,157 in February.
Many renters have put their home buying dreams on pause due to increasing home prices, bidding wars, and rising mortgage interest rates. However, just finding a rental unit can be challenging, Smith says. “There are multiple applicants for every available unit,” he added. “Clearly, demand is exceeding supply.”
Smith says there are challenges for rental operators as well. “Any time there is a vacancy, we are inundated with calls, texts, and emails. It’s hard to respond to all of them.”
Despite a record number of apartment units receiving building permits in 2021 – 6,672 units – the current market is the tightest apartment market in Salt Lake County’s history, according to the Gardner report.
“For many households, the only housing option is renting,” the Gardner report says. “High housing prices have excluded them from homeownership. Although rental rates have experienced a substantial increase since 2010, the rate of increase has been slower than housing price increases. Since 2010, the annual increase in rental rates has been 5.5 percent compared to a 7.9 percent annual increase in the median sales price of a condominium/townhome and an 8.5 percent annual increase for single-family homes.”
The rise in rental rates means higher housing cost burdens for renters. The Gardner report noted that 41 percent of renters in Salt Lake County must spend more than 30 percent of their income on housing and utilities, and nearly 19 percent of all renters spend more than 50 percent.
About the Utah Apartment Association
The Utah Apartment Association (UAA) is a non-profit trade association designed to protect, educate, connect, and grow the rental industry in the state of Utah. We represent roughly 3,500 rental operators and more than 132,000 units. Our members range from basement apartment owners to large management companies. If you are in any way involved with the rental housing industry, we invite you to discover how membership with the UAA can support you and your business.