Think housing costs are high? Study shows Utah could fall well short of demand by 2055

SALT LAKE CITY — Utah is on track to fall significantly short of the number of homes needed to meet market demand over the next 30 years, analysts told lawmakers on Wednesday.

During a meeting of the Economic Development and Workforce Services Interim Committee, representatives from Envision Utah and the Governor's Office of Economic Opportunity presented a Legislature-funded study painting a sobering picture of the state's housing market.

Specifically, the study found that Utah needs to build 842,515 new homes over the next three decades to meet expected demand. But the state is projected to have a shortage of 235,000 homes, meeting only about 72% of that projected demand by 2055, according to Jason Brown, CEO of Envision Utah.

"The biggest lever we can pull on housing affordability is simply increasing supply," Brown said. "If we come up 28% short of housing demand, that's going to have a much bigger impact on affordability than any specific details about any development or any housing type."

Kamron Dalton, managing director of operations at the Governor's Office of Economic Opportunity, added that the study represents a "road map" showing what will happen in the state if nothing changes.

"It is incumbent on you to decide where we go," he told lawmakers.

What can be done?

The study projected that about 50% of the new housing along the Wasatch Front should come from land that is largely undeveloped or vacant. However, while that land may be cheaper and easier to develop, it may also lack roads, sewer systems and other infrastructure.

That's why the study recommended lawmakers invest in infrastructure, along with redevelopment opportunities and transportation. Other recommendations included encouraging flexible development standards and water-efficient landscaping.

"Water-efficient landscaping can save … household water use by as much as two-thirds if we get it right," Brown said, "so that's definitely a big consideration to making sure that we have the water supply that we need moving forward."

Brown likened the state's future housing challenges to what Latter-day Saint pioneers faced when they came to Utah in 1847.

"I think we're going to need a lot of that same pioneer spirit moving forward," he said. "Some of that's going to be focused on redevelopment. We're going to have to look at our existing cities and say: 'We can build something here. … We can put more housing here.'"

Rep. Troy Shelley, R-Ephraim, called the study a "great vision," but he urged caution about infringing on local authority.

"I just want you to make sure that as you do this, that we don't overstep the elected officials that are there to make these decisions," he said.

New starter homes

Earlier in the day, Steve Waldrip, the governor's senior adviser for housing strategy, presented a report to a separate legislative committee on the progress the state has made toward implementing a statewide housing plan. Gov. Spencer Cox entered his second term in January with a focus on building at least 35,000 new starter homes before he leaves office in 2029.

According to Waldrip, the growth that has fueled demand for homes in Utah isn't all bad, and he expressed optimism that the state can continue to adapt to growth smartly.

"We have this great problem that Utah is awesome, and it's a great problem to have," he told the Political Subdivisions Interim Committee Wednesday morning.

Waldrip said the state is "well on the way" to accomplishing another of Cox's goals to build 40,000 new units in regional centers, but the goal of building 35,000 starter homes is proving tough.

"The starter home one is really, really difficult," he said. "And then overall, new housing units is also really difficult because we have market forces right now where — as we all know — costs have gone up, interest rates are still high, and it makes it really difficult, both on the development side and on the homeowner and acquisition side, to get deals to happen."

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