SALT LAKE CITY – An explosion of new high-density housing in Salt Lake County over the past decade has not reduced property values in single-family homes; in fact, it even led to a slight increase in value, according to a report published on Monday.
The findings were the result of a study by the Kem C. Gardner Institute of Policy at the University of Utah, which sought to find out how massive high-density housing projects affected housing values in 2010. was seen as a “controversial political issue” in city councils because of fears about how they could have a negative impact on existing housing values.
“Based on our analysis, what we find, in particular, is that the apartments had a positive impact on the values of the single-family house,” said Dejan Eskic, principal investigator at the Gardner Policy Institute and lead author of the study.
The development effect
Among the key findings of the report is that Salt Lake County homes located half a mile from new apartment complexes saw an average annual increase of 10% in average, compared to 8.6% of homes further away from projects.
The report also said that homes half a kilometer from the new apartments also had an average value of 8.8% per square foot. This is despite the fact that homes in this category were, on average, 11.1% smaller and seven years older than those more than half a kilometer away.
“This implies an annual price increase of 1.4 percentage points for houses closer to new apartment buildings,” the report said. “Similar results can be seen in most of the county, probably the driver being the fact that new apartment buildings bring new demand and new dollars to a community and rehabilitate an older piece of property, thus bringing more vibration and” buzz ” in the area.”
The researchers also found that the only real decline in housing near apartments built in the early decade; however, the researchers found that the housing crisis that developed at the end of the previous decade was to blame.
Eskic explained that the project began by analyzing price acceleration, as housing values across the county continued to grow since about 2012. As housing trends were similar across the country during this time, it allowed the research team to analyze what which determined the performance of some rates better than others.
The team compared the values of the single-family home in Salt Lake County from 2010 to 2019 with data on new apartments built between 2010 and 2018. This allowed a look at both the short-term and long-term impact. The data omitted downtown Salt Lake City and a portion of land near the University of Utah; Eskic said this was because he was looking more at the suburban parts of the county. The team left the team with 9,600 apartments to analyze even when it removed those sections.
They also decomposed the research into four quadrants. Of the four, the highest value occurred in Salt West “West” County. This includes places like Rose Park, West Valley City, Kearns, Taylorsville and Magna. The researchers found that the values increased annually by 13.7% for houses located half a kilometer from the new apartments in those communities, compared to 10.5% for houses further away.
The biggest discrepancy was reported in the northeastern part of the county, which was called “Early Suburbs”. This is an area that includes Sugar House, South Salt Lake, Millcreek, Holladay and Murray. The newspaper said it was probably due to “some of the most expensive and largest houses in the Sugar House and Holladay areas.” However, houses in the region closer to new apartments have seen higher value increases on average.
Southeast Salt Lake County – including places like Midvale, Cottonwood Heights, Sandy and Draper – was the only region where homes more than half a mile from apartments saw higher annual property value increases. The difference was 7.3% for houses more than half a kilometer away, compared to 6.8% for houses half a kilometer away from a new high-density development.
Eskic explained a section of single-family homes near State Street and I-215 in the area, which include some of the outliers in the data. He said it was not clear why this was happening, although it was possible due to the proximity to major traffic.
“It’s the only thing that stood out,” he said, “while in the rest of the county you didn’t have as many single-family homes near the major arteries.”
What the discoveries mean for future growth
The researchers wrote that their findings almost reflected previous academic literature on the subject in various parts of the country in recent decades. That is, there is no substantial negative impact as a result of high-density housing projects.
“Public perceptions of high-density housing continue to be a point of contention in growing communities in Utah and across the country. While many stereotypes and generalizations about negative impacts are brought into the public context, the development of high density does not seem to actually depress home values, “the researchers wrote.
Regarding development today, Salt Lake County Mayor Jenny Wilson described most of the county as almost “wall-to-wall” under development, except for the canyons and the west bank of the county. the latter being the current location and future dwellings.
County officials remain looking for new ways to add housing, because the demand for people who want to move to the county far exceeds the supply of houses.
“I think we need to refine our practices and become more evidence-based,” she said, adding that it gives community leaders more difficult evidence of one aspect of high-density housing that can provide the building blocks.
“Again, times have changed. With so little ground, we need to pay attention to these elections,” she continued. “I’m glad the data helps us get rid of it – it’s probably a non-essential issue.”
“This does not end the discussion; it does not end the concern, but it is excellent information that helps to move the conversation in a very constructive way.”
–Dan Lofgren, CEO of Cowboy Partners
Wilson spoke at a virtual roundtable hosted by the Gardner Policy Institute after the report was released Monday afternoon. It was a small event in which some of the county’s top leaders and experts in housing and development discussed the report’s findings.
She said the results also show that people want a wider range of housing styles than the previous stereotypical house with white picket fence. This does not mean that such newer houses will not be built in the future, but there could be more projects with higher density.
Dan Lofgren, CEO of developer Cowboy Partners, agreed with Wilson on this. He said the study could also move the needle for further development in the future.
“This does not end the discussion, it does not end the concern, but it is excellent information that helps to move the conversation in a very constructive way,” he said. “I am grateful to have received this information as part of the conversation.”
He added that although he would not completely solve the problems of affordable housing, it would “allow accessibility”. While the lack of housing density could make housing less affordable.
Some experts say the study provides evidence of a single concern, but does not address the whole issue completely.
Matt Dahl, assistant city manager for Midvale City, said there are still major conversations that need to take place when it comes to future development. It starts with the other effects that residents near the new apartments might see.
“Our challenges are that it’s hard for residents to feel that the value of their home is up 1.4 percent (faster) than people living in a different neighborhood, but they feel it when there’s more traffic or parking on the road,” even though parking and traffic are far below the capacity of the affected street, “he said.” The experience of change in these neighborhoods is important and must be taken into account as we seek to develop our policy. “
That’s why he said it’s important for cities and developers to be able to show residents the benefits of new development from the start.
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 helps finalize an argument about higher-density housing; which could remove an obstacle in a monumental housing task.
“Given the cost of housing, the shortage of 35,000 units nationwide, there is a lot for us to answer for,” Gallegos said. “It’s going to take a while, so I think (the study) is taking the argument off the table and we can start moving forward.”
Correction: An earlier version of this story 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.