SALT LAKE CITY – An explosion of new high-density housing in Salt Lake County over the past decade has not led to reduced property values of single-family homes; in fact, it even led to a slight increase in value, according to a report released Monday.
The findings were the result of a study conducted by the University of Utah’s Kem C. Gardner Policy Institute, which sought to find out how massive, high-density housing projects affected home values during the 2010s. The development of higher density is seen as a ‘politically controversial topic’ in the city councils due to the fear that it could negatively affect current housing values.
“Based on our analysis, it is in particular that apartments have had a positive effect on the values of single families,” said Dejan Eskic, a senior research fellow at the Gardner Policy Institute and lead author of the study.
The development effect
One of the key findings in the report is that Salt Lake County homes within a half mile of new condominiums are experiencing an average 10% increase in average value compared to 8.6% of homes further away of projects.
The report also stated that homes within a half mile of new apartments had an average of 8.8% higher median value per square foot. This is despite the fact that houses in the category were on average 11.1% smaller and seven years older than the houses more than half a kilometer away.
“This implies an additional 1.4 percentage point in annual price valuation for homes closer to new apartment buildings,” the report reads. “Similar results are being seen in most of the province, with the likely manager that the construction of new apartments brings new demand and new dollars into a community and redevelop an older piece of property, thus bringing more vitality and ‘buzz’ into it. bring the environment. “
Researchers have also found that the only real dip is in housing near apartments built at the beginning of the decade; however, researchers have determined that the housing crisis that developed at the end of the previous decade was to blame.
Eskic explained that the project began to investigate price acceleration because nationwide house values have been moving upwards since about 2012. As the trends across the country were similar across the country, this enabled the research team to look at what made some prices perform better. than others.
From 2010 to 2019, the team compared single-family homes in Salt Lake County with data on new apartments built between 2010 and 2018. It took a look at the short- and long-term impact. The data was omitted in downtown Salt Lake City and a piece of land near the University of Utah; Eskic said this was due to the more investigation into suburban parts of the country. This left the team with 9600 flats to analyze, even when the portions were removed.
They also divided the research into four quadrants. Of the four, the highest value occurred in ‘West’ Salt Lake County. These include places like Rose Park, West Valley City, Kearns, Taylorsville and Magna. Researchers found that values increased by 13.7% annually for homes within half a mile of new apartments in the communities, compared to 10.5% for homes further away.
The highest difference was in the northeastern part of the province, referred to as ‘Early Suburbs’. This is an area that includes Sugar House, South Salt Lake, Millcreek, Holladay and Murray. According to the newspaper, this is probably due to ‘some of the most expensive and largest homes in the Sugar House and Holladay areas.’ Nevertheless, houses in the region closer to new flats experienced 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 a mile from the apartments have higher annual property values. The difference was 7.3% for homes more than half a mile away, compared to 6.8% for homes within half a mile of new high-density development.
Eskic has outlined a portion of single-family homes near State Street and I-215 in the area, which include some of the outsiders in the data. He said it is unclear why this is, although it may be due to the heavy traffic.
“That’s the one thing that stood out,” he said, “while you didn’t have as many single-family homes near major arterial streets in the rest of the province.”
What the findings mean for future growth
Researchers have written that their findings over the past few decades have almost reflected academic literature on the matter in various parts of the country. There is therefore no material adverse effect due to high density housing projects.
“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 consequences in the public environment are raised, density is not “home values,” the researchers wrote.
In his research into today’s development, Salt Lake County Mayor Jenny Wilson described most of the province as ‘wall-to-wall’, with the exception of ravines and the western bank of the province, the latter of which home of current and future housing.
Land officials were therefore looking for new ways to add housing, as the demand from people wanting to relocate to the province still outweighs the supply of homes.
“I think we needed to refine our practices and base more evidence,” she said, adding that it provides community leaders with harder evidence on one aspect of high-density housing that their ingredients can provide.
“Again, times have changed. With so little ground, we need to be considerate about these choices,” she continued. “I’m glad the data is helping us erase it – it might be a problem.”
“It does not end the discussion; it does not end the concern, but it is a lot of information to help move the conversation in a very constructive way.”
–Dan Lofgren, President and 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 occasion where some of the province’s leading leaders and leading housing and development experts 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 a white peak fence. This does not mean that newer such houses will not be built in the future, but even more projects with a higher density may be on the way.
Dan Lofgren, CEO of developer Cowboy Partners, agrees with Wilson in this regard. He said the study could also move the needle for more development in the future.
“It does not end the discussion, but it is not an end to the concern, but it is a lot of information to help move the conversation in a very constructive way,” he said. “I’m grateful that this information is part of the conversation.”
He added that he believes it will be affordable, although it will not completely solve affordable housing problems. While a lack of housing density can make housing less affordable.
Some experts believe that the study provides evidence of one case, but that the whole issue is not fully addressed.
Matt Dahl, assistant city manager of Midvale City, said there were still major talks to take place regarding future development. It starts with the other consequences that residents can see near new apartments.
“Our challenges are that it is difficult for residents to feel that their home value is 1.4 (percentage points) faster than people living in another area, but they feel it when there is more traffic or parking on the road, though. is it parking and traffic is far below the capacity of the street in question, ‘he said. “The experience of change in these neighborhoods is important and it must be taken into account while we want to develop our policy.”
That is why he said it is important that cities and developers can show the benefits of new development to residents early.
Meanwhile, some view the study as an exchanger 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 could potentially help end one argument about higher-density housing; it can remove one obstacle in a monumental housing task.
“With the housing cost, the shortage of 35,000 units across the country, that’s a lot we can respond to,” 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 Salt Lake City downtown was included in the study. Researchers later explained that downtown Salt Lake City was not included in the study.