New Study on Housing Affordability Focuses on Local Land Use Practices

December 15, 2020 by admin
Policy/Legislative

On Wednesday, the Kem C. Gardner Policy Institute at the University of Utah released its research study on housing affordability.  The study focuses on the role of local and state government, mainly land use planning and regulation as well as fiscal policies, and their role in the state’s housing affordability crisis.  The study’s release comes just as the next state legislative session is set to begin.  Legislators, policy groups, and legislative committees have been engaged in discussions during the past year about possible measures that might be taken during the session to address the issue.  Several bills have already been pre-filed, and others are likely coming, on the topic.

The Gardner Institute study highlights five “best practices” for local and state officials to consider.  Notably, this study does not address other factors that affect housing affordability such as land prices, construction material and labor costs, and financing.

Some of the key findings and recommendations from the study:

“Land Use Regulations Determine the Effectiveness of All Best Practices—Land use regulations control what type of housing gets built, where it gets built, and its affordability. Without accommodative land use regulations, there is little chance a city’s housing policies can influence prices, provide diverse housing types, or meet changes in homebuyers’ preferences. Recently, housing preferences have moved toward multifamily housing (condominiums, twin homes, townhomes, and apartments). From 2000 to 2009, multifamily units accounted for only 27% of all new residential units in Utah, but from 2010 to 2019 the share of multifamily units increased to 44%, and in the last three years, it climbed to nearly 50%. Zoning ordinances, in many cities, do not reflect the shift in preferences to higher density, more affordable housing.  Zoning often lags changes in market preferences.”

“Leadership and Political Will—Progress on the housing crisis needs continued state and civic leadership. Without it, today’s children, Utah’s next generation, will face an even greater scarcity of affordable housing and more burdensome housing prices.”

“Zoning ordinances, in no small measure, control the supply of housing through land use, density, and design regulations. These regulations, more than any other local policies, govern the annual supply of single-family and multifamily housing. In recent years, the supply of housing has not met the demand. Since 2009, the number of Utah households has increased by 220,720, while the number of dwelling units has increased by 185,334, a shortfall of 30%.  The housing shortage has driven-up housing prices and rents and created a serious housing affordability problem. The shortage has also excluded many from homeownership, added to substantial increases in doubling-up of households, delayed marriages, and discouraged young people from forming new households.”

“Developed residential acreage in Salt Lake County is heavily concentrated in single-family lots. High-density, multifamily acreage represents a little less than 10% of developed land. To accommodate shifting preferences for affordable, high-density housing, the future share of developed multifamily acreage will likely (need to) increase.”

“The level of participation in housing issues by the Utah Legislature, cities and counties, the Salt Lake Chamber, nonprofit organizations, and corporations is unprecedented. The convergence of three issues has prompted this engagement: (1) the homeless crisis, (2) the housing shortage, and (3) the housing affordability challenge. These related issues pose near- and long-term threats to the economic well-being of Utah households, individual opportunity, and the state’s economic prosperity. But given the more favorable political and civic environment, the chances of meaningful local land-use revisions, to mitigate these threats, are the best in years.”

“Less restrictive zoning is a necessary condition for improved housing affordability and increased housing production. Complementary policies that would enhance less restrictive zoning includes streamlining and standardizing the uncertain and time-consuming approval process and adopting form-based code for selected zones.”

“The 2019 Utah Legislature passed S.B. 34 Affordable Housing Modifications. The bill enacted new policies for cities to encourage local officials to plan and zone for affordable housing. The legislation provided a list of 23 strategies to encourage housing affordability. Cities are required to select at least three strategies to be eligible to apply for $700 million in state transportation funds. While outcomes of policy changes will not be documented until 2021, it’s encouraging that three of the four most frequently selected strategies applied to zoning.”

You can see the entire study at https://gardner.utah.edu/wp-content/uploads/Best-Practices-Dec2020.pdf

Wilf Sommerkorn

Co-Chair, APA Utah Legislative Committee