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SALT LAKE CITY — Everywhere you look in Salt Lake City, it seems a new apartment building is going up. In fact, the city is in the middle of a building boom — but rents are not going down.
Ashley and Cameron shared their thoughts as they left another apartment complex downtown.
“The places all look nice, but nothing is really standing out yet,” said Ashley.
“I think it’s more competitive. There’s a lot more people looking here, and if you want it, cool, if you don’t, we’ll find somebody else,” said Cameron.
And competitive is right.
“The demand has for sure increased,” said DJ Benway, research analyst with the Kem C Gardner Institute at the David Eccles School of Business at the University of Utah.
Benway says the market is attempting to meet the demand. The vacancy rate is estimated to be around 3 to 5 percent, which is very low.
“We are building apartments for people who are here and want to be here anyway,” said Benway.
Benway says construction lagged behind the recession and recovery, but it started to pick up, and then the city had a moratorium on impact fees and the number of permits nearly tripled.
“We’ve seen more apartment permits than ever before in Utah’s history in Salt Lake City,” he said.
At city hall, they say they can’t keep up with the number of people who want to live in Salt Lake City.
“This is all market-driven,” said Melissa Jensen, director of housing and neighborhood development in Salt Lake City.
“To have a healthy city, we need good a combination where your income meets a certain housing type,” she said.
One of those new apartment buildings is on 400 West. They have 1,000 new residential units coming. No one from the development wanted to talk to a reporter, but online they list a one-bedroom for $1,500 a month and a three- bedroom, 3 ½ bath unit for $4,455 a month. Other downtown buildings vary, depending on their amenities, luxuries and location.
Rent is a concern for Ashley and Cameron as they looked at one complex: “They are on the pricier side,” they acknowledged.
Utah Non-Profit Housing Corporation says the average one-bedroom apartment rental rate in Utah is just over $1,000. CBRE says the average Wasatch Front rental rate is now $1,100 a month. It was $994 two years ago.
Abby Osborne, Salt Lake Chamber vice president of government relations and public policy, says many people can’t afford those rents. And despite all the recent building, there’s still not enough supply.
“For the first time in 40 years, we have more household formations than housing units. We have a gap. We have a 54,000 shortage. It’s the adage of supply and demand. We have intense demand and not enough supply in the market,” said Osborne.
The chamber’s Housing Gap Coalition is asking cities around Utah to be smarter in how they grow and plan.
“We need to plan for that access to opportunity, that area where people can live work and play is so important,” said Osborne.
Jensen says Salt Lake City’s 5-year plan does include affordable housing of all types and other cities need to do more.
Benway only sees this building boom continuing.
“There are a lot of proposed units out there still. I don’t expect this apartment boom to stop in Salt Lake City quite yet,” he said.