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What the Wasatch Front needs is more basement apartments

September 30, 2020 by admin
Housing, Planning News, Policy/Legislative

I have relatives who recently built a house along the Wasatch Front, in a city known for lenient ordinances about basement rentals. Their builder fashioned a nice basement unit with a separate entrance off the driveway.

In spite of this, they have run into nit-picking city planners with rulers and yardsticks who are making the permitting process difficult.

I’m being deliberately coy about the city’s name because the issue could apply to several cities in the greater Salt Lake area, and because the entire area is facing a housing shortage of monumental proportions. That shortage is leading to a spike in home prices and rents that shows no sign of leveling out.

A lot of people want to move here, but there aren’t enough places for them to live.

I had a different, retired relative try to move here a couple of months ago from an expensive coastal city. He found buying an existing home too challenging.

Many of these sell before the “for sale” sign can be planted. Buyers don’t have time to think. You either make an offer on the spot or you miss your chance.

Many newcomers want to build, but that can take several months. In the meantime, a basement rental could come in handy.

But most cities don’t make that easy, and some outlaw it completely.

Rising home prices are a simple matter of supply and demand. To stem the tide, the Wasatch Front needs an unprecedented building boom, along with less restrictive (although still thoughtful and intelligent) rules about basement units and high-density construction.

In the case of my relatives with the new home, they have watched neighbors rent out basements without bothering with a permit. Excessive regulations can lead to black markets. In the case of rentals, this raises a host of concerns and potential legal liabilities and safety for renters.

City planners and inspectors exist for good reasons, but if they are too cumbersome, they will be ignored while people try to take advantage of a market need.

I’ve written about this every year for at least three years now, but the problem keeps getting worse. And the pandemic seems to have accelerated it.

Local politicians have to deal with voters who don’t like high-density housing, and who often would prefer to keep newcomers out because they add to traffic woes and overcrowded schools.

On Tuesday, the Deseret News published a report from Robert Charles Lesser and Co., which does data analytics and strategic planning for the real estate industry. It said Utah has a 3.3-month supply of new homes. The pandemic is giving some workers more flexibility in where they live and interest rates are low.

The U.S. Census Bureau reports that sales of new single-family homes are up 43.2% since last September, pushing the demand for new housing to historic levels. The Salt Lake Board of Realtors said sales in Salt Lake County set a record in July.

Zillow reports that the median price of a home in the Salt Lake metro area is $405,189, a 7.9% increase over this time last year.

It may seem silly to try to compare the Wasatch Front to San Francisco, where the median home price is $1.4 million, according to Zillow. But San Francisco’s prices are up only 0.6%. The pandemic is allowing high-tech workers to move away from there while keeping their jobs. Utah is a beneficiary of this, at least until rising prices and a housing shortage push people elsewhere.

Last year, the American Enterprise Institute published what it calls a “carpenter index.”The idea was to measure whether the people who build houses — carpenters with modest incomes — can afford to buy an entry level one.

Out of the top 100 metropolitan areas in the United States, Salt Lake County came in as the eighth least affordable, and one of only nine where the average carpenter could afford less than 20% of entry level homes. Provo was even worse, ranked fifth.

Being a local politician isn’t easy. A lot of people in existing neighborhoods don’t like basement apartments next door.

But these may be the easiest and least expensive ways to begin solving a supply and demand problem that shows no sign of easing.


By Jay Evensen, Deseret News

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