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SALT LAKE CITY – An explosion of new high-density housing in Salt Lake County over the past decade has not resulted in a reduction in property values for single-family homes; in fact, it even translated to a slight increase in value, according to a report released on Monday.
The findings are the result of a study conducted by the Kem C. Gardner Policy Institute at the University of Utah, which sought to determine how high-density housing projects impacted home values over the course of 2010s. Higher density developments were considered “a politically controversial subject” by city councils because of fears of their negative impact on existing housing values.
“Based on our analysis, what we’re finding, in particular, is that apartments have had a positive impact on single-family home values,” said Dejan Eskic, senior researcher at the Gardner Policy Institute and senior author of study.
The development effect
One of the report’s key findings is that Salt Lake County homes within half a mile of new apartment complexes experienced an average annual increase of 10% in median from 8, 6% of houses further from the projects.
The report also found that homes within half a mile of new apartments also had an 8.8% higher average median per square foot. And this despite the fact that homes in this category were, on average, 11.1% smaller and seven years older than homes over half a mile away.
“This implies an additional 1.4 percentage point of annual price appreciation for houses closer to new apartment buildings,” the report said. “Similar results are seen across much of the county, the likely driving force being that new apartment construction brings new demand and dollars to a community and redevelop an older property, bringing more vibrancy and ‘buzz’ to the region. “
The researchers also found that the only real drop in housing near apartments built at the start of the decade; however, the researchers determined that the housing crisis that developed at the end of the previous decade was to blame for it.
Eskic explained that the project started by examining the acceleration in prices, as home values across the county had continued to rise since about 2012. Since housing trends were similar across the county during this time period. , this allowed the research team to examine what made some tariffs work better than others.
The team compared the values of single-family homes in Salt Lake County from 2010 to 2019 with data on new apartments built between 2010 and 2018. This allowed for a look at both short and long term impacts. The data omitted downtown Salt Lake City and a strip of land near the University of Utah; Eskic said this was due to being more interested in the county’s suburbs. He left the team 9,600 apartments to analyze even with the removal of these sections.
They also divided the research into four quadrants. Of the four, the highest value occurred in the “west” county of Salt Lake. This includes places like Rose Park, West Valley City, Kearns, Taylorsville, and Magna. The researchers found that values increased 13.7% per year for homes within half a mile of new apartments in these communities, compared to 10.5% for homes further away.
The largest difference was reported in the northeastern part of the county, known as the “early suburb”. It is an area that includes Sugar House, South Salt Lake, Millcreek, Holladay and Murray. The newspaper said this was likely due to the fact that “some of the more expensive and larger homes are located in the Sugar House and Holladay areas”. Yet homes in the area closer to new apartments have seen larger increases in value on average.
Southeast Salt Lake County – including places like Midvale, Cottonwood Heights, Sandy and Draper – was the only area where homes more than half a mile from apartments saw annual increases in property values. The difference was 7.3% for homes located more than half a mile away, compared to 6.8% for homes located within half a mile of a new high density development.
Eskic explained a section of single-family homes near State Street and I-215 in the area that includes some of the outliers in the data. He said it was not clear why this was, although it may have been due to its proximity to major traffic.
“That’s the only thing that stands out,” he says, “whereas in the rest of the county you didn’t have as many single-family homes located near major thoroughfares.
What the results mean for future growth
The researchers wrote that their findings almost mirrored previous academic literature on the issue in different parts of the country over the past decades. In other words, high density housing projects do not have a significant negative impact.
“Public perception of high density housing continues to be a point of conflict in growing communities across Utah and the country.” Although many stereotypes and generalizations about negative effects are brought up in public places, high density development does not actually seem depressing. the values of the house, ”the researchers wrote.
Looking at today’s development, Salt Lake County Mayor Jenny Wilson described most of the county as almost “wall to wall” developing, with the exception of the canyons and West County Bank. , the latter being the future housing site.
County officials have remained on the lookout for new ways to add housing, as demand from people looking to relocate to the county still far exceeds the supply of housing.
“I think we’ve had to refine our practices and become more evidence-based,” she said, adding that this provides community leaders with stronger evidence on one aspect of high-density housing that they can provide. to voters.
“Again times have changed. With so little land, we have to think about these choices,” she continued. “I’m glad the data is somehow helping us get rid of it – maybe that’s a non-issue.”
“It doesn’t end the discussion; it doesn’t end the worry, but it’s good information to help move the conversation forward in a very constructive way.”
–Dan Lofgren, CEO of developer Cowboy Partners
Wilson spoke at a virtual panel discussion hosted by the Gardner Policy Institute after the report was released on Monday afternoon. It was a small event where some of the county’s top leaders and experts in housing and development discussed the report’s findings.
She said the results also show people want a wider range of housing styles than the previous stereotypical house with a white picket fence. That doesn’t mean new homes like this won’t be built in the future, but even higher density projects could be on the way.
Dan Lofgren, CEO of developer Cowboy Partners, agreed with Wilson in this regard. He said the study could also move the needle for more development in the future.
“It doesn’t end the discussion, it doesn’t end the worry, but it’s great information to help move the conversation forward in a very constructive way,” he said. “I am grateful to have this information as part of the conversation.”
He added that he believes that while this will not completely solve the affordable housing problems, it will “facilitate affordability.” Whereas a lack of housing density could make housing less affordable.
Some experts say the study provides evidence for one concern, but does not fully address the whole issue.
Matt Dahl, Deputy City Manager for Midvale City, said there were still important conversations that need to take place when it comes to future development. It starts with the other impacts that residents near the new apartments might see.
“Our challenge is that it’s hard for residents to feel that the value of their home is appreciating 1.4 (percentage point) faster than people who live in another neighborhood, but they feel it when it comes down to it. there is more traffic or parking on the road, even though that parking and traffic is well below the capacity of the affected street, ”he said. “The experience of change in these neighborhoods is important and must be taken into account when we seek to develop our policy.”
That’s why he said it was important for cities and developers to be able to show residents the benefits of a new development early on.
Meanwhile, some see the study as a game changer for future housing development, especially as the state’s population is expected to double in the coming decades. Michael Gallegos, director of Salt Lake County Housing & Community Development, said the study potentially helped to end an argument over higher density housing; this could overcome an obstacle in a monumental housing task.
“With the cost of housing, shortages of 35,000 units statewide, that’s a lot of things we have to address,” said Gallegos. “It’s going to take a while, so I think (the study) takes the argument off the table and we can start moving forward.”
Correction: A previous version of this article indicated that downtown Salt Lake City was included in the study. The researchers later clarified that data from downtown Salt Lake City was not included in the study.
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