Salt Lake City, Utah is apparently a great place to live. It is one of the few cities of its size seeing steady population growth year after year. People are flocking to SLC because of its job opportunities, quality of life, and culture. Unfortunately, it is getting harder to find affordable housing there.
Meanwhile, city leaders are now debating a controversial zoning change that would allow for in-fill development. New zoning would reduce minimum lot sizes to accommodate more multi-family dwellings alongside tiny houses and in-law cottages.
It turns out that the debate is not unique to Salt Lake City. Leaders in cities across country are having similar discussions. And with the coronavirus crisis still front and center, some cities worry that the pandemic’s ongoing economic impacts will only make it harder for city residents to afford housing. They see an urgency to adjust zoning now.
The Salt Lake City Environment
Data shows that Salt Lake City’s population growth has continued relatively unabated since 1950. In the years between 1950 and 1980, annual growth exceeded 3% annually. Growth has been about half that since. In 2010 there were just over 1 million people who called Salt Lake City home. In 2020, that number was up to 1.16 million.
CityHome Collective, a local real estate brokerage and interior design firm, says that area home sales reflect what census data indicates. For many years there has been a steady and consistent demand for housing. Moreover, demand has not been limited to new builds. Resales have remained strong as well.
The practical impact of population growth on housing is higher pricing. Whether you are talking luxury homes, condos, lofts or affordable single-family dwellings, real estate is based almost entirely on supply and demand. Higher demand always increases prices if supply doesn’t keep up. Such is the case in Salt Lake City.
The City’s Proposed Solution
City leaders want to attack the affordable housing issue by making it easier for people to build smaller, cheaper houses. They envision a future in which larger lots with single-family homes also feature cottages and tiny homes in the back yard. They envision fewer single-family dwellings on large lots and more multi-family dwellings on smaller lots.
As the thinking goes, this should make housing more affordable. But it only works if landowners and developers agree to build affordable housing. The fear is that it will not happen. The fear is that landowners will tear down single-family homes and replace them with multi-family structures with higher rents.
It is a reasonable fear. Just like sale prices are determined by supply and demand, so are rents. City leaders should expect rental rates to increase commensurate with demand, regardless of whether or not they give the okay to higher density development.
On the other hand, the plan could work if the majority of city property owners leave their existing homes intact and just built cottages or tiny homes on their properties instead. Of course, this stipulates that they rent out those cottages or tiny homes at affordable rates. But will they?
A Problem in Need of a Solution
There is no denying that affordable housing is a problem in need of a solution. There is also no denying that the problem is not isolated to Salt Lake City and a few other up-and-coming metropolitan regions. It is a problem all across the country.
What we have to decide is whether or not rezoning and in-fill development are effective solutions. There are legitimate reasons to believe they are not. And if they aren’t, then what is the best solution?