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LEHI — Utah led as the fastest-growing state in the nation between 2010 and 2020 in terms of percentage increase, but its reign over other states has slowed down since the 2020 census.
It fell to ninth in percentage rate and 10th in numeric growth in 2023, and none of its counties, including the fast-growing Utah County, cracked the Top 10 in more localized growth categories, according to the Census Bureau's population estimates. It's a trend that has emerged in recent years, while Texas, Florida and other southeast states have surged to the top of almost every population growth category.
So what happened?
Utah Gov. Spencer Cox believes it comes down to the rising home costs that have suddenly made it harder to live in Utah. Utah's median home price returned to $542,500 in February, about a 66% jump from the median five years ago, according to Redfin.
"We're not the fastest-growing state in the country anymore, and that is because of the cost of living," Cox told reporters last week. "Either you don't have a job, or you have a job but you can't buy a house. Both of those make you leave, and it's not great. ... This is why we're trying to change that."
The first steps to reverse the situation may have come out of this year's legislative session.
The governor, along with a handful of lawmakers and other state officials, gathered at Lehi's Cold Spring Ranch housing development on Thursday to ceremonially sign a handful of housing and transportation bills that address the state's climbing housing and living costs.
"I truly believe this is the most aggressive housing package in the country, and they will move the needle in a very, very big way over the next five years," Cox said. "We're going to build 35,000 starter homes in the next five years — we're going to do that."
Utah's rising housing costs and shortage
Utah isn't alone in a population slowdown over the past few years. Lauren Bowers, chief of the Census Bureau's population division, noted earlier this month that the West's growth is "slowing down," pointing to Arizona and Idaho specifically.
While experts at the University of Utah's Kem C. Gardner Policy Institute declined KSL.com's interview request, they pointed out in December that migration continues to drive population trends. In general, Utah's population is still rising because more people are moving to Utah than leaving it, but thousands of people still leave Utah every year.
The data doesn't explain what's behind the trends, but cost is widely suspected to be a possible factor.
The rising cost of homes in Utah and across the nation can be explained by several factors, including high inflation, rising interest rates and not enough supply to fulfill the demand for homeownership.
Steve Waldrip, senior adviser for housing strategy and innovation to the governor, said Utah needs about 28,000 new housing starts each year to keep pace with growth. Housing starts peaked in the state at about 37,000 in 2021 but fell to about 19,000 last year. An often underappreciated factor in the slowing rate of building in Utah is the failure of several regional banks last year, which led federal regulators to cut back on how much banks can lend out.
In turn, this made it harder for builders to secure loans to move forward on new developments.
"We've got a housing deficit now of about 36,000 units. We were reducing it, and then we had interest rates rise, and then the other thing that happened is we had a number of banks in the United States and internationally failed," Waldrip said. "So the (Federal Reserve) wisely, I think, tightened up the lending criteria for lenders, and that created a liquidity crisis."
Tackling the issue
All of this is why Cox went into this year's legislative session with an ambitious ask for $150 million from lawmakers to build 35,000 new starter homes by 2028. While the Legislature didn't approve exactly what the governor had asked for, he's just as excited about the final result.
In response to the state's lack of liquidity, lawmakers approved a $300 million fund from the state treasurer's account to provide low-interest loans to developments where 60% of the homes are considered affordable, equivalent to about $350,000 for detached, single-family homes. To qualify, homes must also be owner-occupied for at least five years, which Cox said prevents large investors from buying them up to rent or flip.
"This is where we asked the Legislature for $150 million," Cox said. "We didn't have $150 million in the budget, and yet we found $300 million doing it this way. This is the creativity and uniqueness of our Legislature and our thought leaders in this space."
Anything as complex as the state's housing supply won't be solved overnight, but the governor is optimistic that the loans will allow builders to start chipping away at the housing deficit as early as this year.
"We're hopeful that as soon as this goes into law over the next two months, then this will open up liquidity and these houses will start to be built," he said. "It takes a while to build a home, but this time next year we're hoping to see those (homebuilding) numbers shoot up and then over the course of five years just drive those (housing deficit) numbers down."
Lawmakers did more than just invest in homebuilding and acknowledged that transportation investment is also key to mitigating the affordable housing crisis.
"One of the challenges that we face in these areas of incredibly high growth is a lack of transit, and as much as we want to build more and more roads ... we need alternative options," said Rep. Candice Pierucci, R-Herriman.
Pierucci was the sponsor of a bill aimed at improving transit by offering transit innovation grants to cities, which she said "will allow for cities to be creative" when it comes to meeting the transit needs of their residents.
Cox noted that the state currently has about 200,000 available lots to build on that lack basic infrastructure such as sewage systems, roads and sidewalks. Through HB13, developers can create a special financing district and receive lower interest rates from the bond market to build up the infrastructure necessary to turn those lots into new developments, according to bill sponsor Rep. Jim Dunnigan, R-Taylorsville.
Between these and other bills, policymakers hope to set Utah on a path toward better housing affordability, but there is likely still more work to be done. For all the state investment, cities control zoning laws that can restrict or limit housing density or affordable housing developments — meaning buy-in from local leaders across the state is essential to solving the problem.
State leaders worked closely with the League of Cities and Towns and elected officials from cities around the state during the legislative session, Cox said when asked if the Legislature should have done more on zoning reform.
He said lawmakers wrote laws "in such a way that cities will want what we're trying to do here, that they'll actually get these new tools that will incentivize them so that we can start to build more starter homes in their community. So, we're going to try this out for a year. We have their buy-in, we think we'll see more of these new starter home zones moving into our cities, and if not, we'll reevaluate next year."
