SALT LAKE CITY: An explosion of new high-density housing throughout Salt Lake County over the past decade has not resulted in a reduction in the value of single-family home ownership; in fact, it even resulted in a slight increase in value, according to a report released Monday.
The results were the result of a study conducted by the Kem C. Gardner Institute of Policy at the University of Utah that sought to find out how massive high-density housing projects affected the values of houses during the 2010s. Higher density development was seen as “a politically controversial issue” in town halls due to fears of how they might negatively affect existing housing values.
“According to our analysis, what we find, in particular, is that apartments have had a positive impact on single-family home values,” said Dejan Eskic, a senior researcher at the Gardner Policy Institute and lead author of the study.
The development effect
Among the report’s main findings is that Salt Lake County homes located a mile from miles of new apartment complexes experienced an average annual increase of 10% of the average value compared to 8.6%. from homes furthest from projects.
The report also indicated that households located half a kilometer from new apartments also had an average average value per square meter of 8.8% higher. This is despite the fact that households in this category were, on average, 11.1% smaller and seven years older than those more than half a mile away.
“This implies an additional 1.4 percentage points in annual price appreciation for homes closer to new apartment buildings,” the report states. “Similar results are seen in most of the county, and new apartment construction is likely to bring new demand and new dollars to a community and redevelop an older property, bringing more vibration and“ animation ”to the area. “.
Researchers also found that the only real decline in housing near apartments built in the early decade; however, researchers determined that the housing crisis that unfolded in the late previous decade was to blame for this.
Eskic explained that the project began by studying price acceleration, as county-wide home values have continued to rise since 2012. Because housing trends were similar across the county during this time. time, allowed the research team to examine what caused some rates to perform 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 analysis of 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 is due to looking more at the suburban areas of the county. He left the team with 9,600 apartments to analyze even when removing these sections.
They also divided the research into four quadrants. Of the four, the highest value went to Salt Lake County “West.” This includes places like Rose Park, West Valley City, Kearns, Taylorsville and Magna. The researchers found that values increased 13.7% annually for households located half a mile from new apartments in these communities, compared to 10.5% for more remote homes.
The highest discrepancy was reported in the northeastern part of the county, which was known as the “Early Suburbs.” This is an area that includes Sugar House, South Salt Lake, Millcreek, Holladay and Murray. The newspaper stated that it was probably due to the fact that “some of the largest and most expensive houses are in the Sugar House and Holladay areas.” However, households in the region closest to the new apartments experienced larger increases in value 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 experienced an annual increase in property value. . The difference was 7.3% for households located more than half a kilometer away, compared to 6.8% for households less than half a kilometer away from the new high-density development.
Eskic explained a section of single-family homes near State Street and I-215 in the area that include some of the atypical values of the data. He said it is not clear why this was, although it is possibly due to its proximity to heavy 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 located near the main arteries.”
What the findings mean for future growth
The researchers wrote that their findings almost reflected previous academic literature on the issue in different parts of the country over the past few decades. That is, there is no substantial adverse impact as a result of high-density housing projects.
“Public perception of high-density housing continues to be a point of contention in growing communities in Utah and the country. Although there are many stereotypes and generalizations about the negative impacts on public environments, the development of ‘high density does not appear to depress home values,’ the researchers wrote.
In analyzing the development, Salt Lake County Mayor Jenny Wilson described most of the county as “wall-to-wall” in development, with the exception of the county’s canyons and western sidewalk. the latter is the current site and future housing.
County officials are left looking for new ways to add housing, as the demand from people who want to settle in the county still far exceeds the supply of homes.
“I think we’ve had to refine our practices and build on the evidence,” he said, adding that it provides community leaders with more difficult evidence on one aspect of high-density housing they can provide. to the components.
“Once again, times have changed. With so little land, we need to consider these decisions,” he continued. “I’m glad the data helps us get rid of it. Maybe it’s not an issue.”
“That doesn’t end the discussion; it doesn’t end the concern, but it’s a lot of information that helps move the conversation in a very constructive way.”
–Dan Lofgren, CEO of developer 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 where some of the county’s top leaders and leading housing and development experts discussed the report’s findings.
He said the results also show that people want a wider range of housing styles than the previous stereotyped house with a white picket fence. This is not to say that newer houses like this will not be built in the future, but there would still be projects with more density.
Dan Lofgren, the executive chairman of developer Cowboy Partners, agreed with Wilson in this regard. He said the study could also move the needle for further development in the future.
“That doesn’t end the discussion, it doesn’t end the concern, but it’s great information to help move the conversation 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 it will not completely solve the problems of affordable housing, it will “adapt to affordability”. While the lack of housing density could make housing less affordable.
Some experts say the study provides evidence of a concern, but does not completely address the problem.
Matt Dahl, assistant director of Midvale City, said there are still important conversations that need to happen regarding future development. This starts with the other impacts that residents can see near new apartments.
“Our challenges are to make it hard for residents to feel that their home value appreciates 1.4 (percentage points) faster than people living in a different neighborhood, but they feel it when there is more traffic or parking on the road , even if that is parking and traffic are 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 developing 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, mostly because the state’s population is expected to double in the coming decades. Michael Gallegos, Salt Lake County’s director of Housing and Community Development, said the study helps end an argument about denser housing; this could remove an obstacle in a monumental housing task.
“With the cost of housing, the shortages of 35,000 units statewide, it’s a lot for us to respond to,” Gallegos said. “It’s going to take a certain amount of time, so I think (the study) removes the argument from 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 the Salt Lake City center was not included in the study.