Utah Governor Spencer Cox admitted Thursday that state initiatives to lower housing prices have not been successful as demand continues to outpace supply. The admission comes as Salt Lake County recently reached a record-high median sales price of $645,000 for a single-family home, despite ongoing economic uncertainty and high mortgage rates.
Struggling Starter Home Goals
During a monthly news conference on Thursday, Cox conceded that recent legislative efforts and new initiatives have failed to significantly move the needle on housing costs. "Yeah, it totally indicates that, yeah, that we have not been as successful as we need to be," Cox said. He noted that the persistent high prices indicate that demand is still outpacing the available supply.
The Supply Gap
The governor's admission highlights the difficulty of meeting a major housing target established in 2023. Cox set a goal to facilitate the construction of 35,000 starter homes by the end of his second term in 2028. However, according to the latest data, progress has been slow, with just over 7,400 of those homes having hit the market.
Cox acknowledged the difficulty of the task, noting that he chose to set a high bar rather than a safe one. "I had advisors say, 'don't put that number out there because it's going to be really, really hard to hit," Cox said. "We put it out there anyway because... that's what a goal should be. I mean, that's what I'm trying to do. I might fail."
Statewide Housing Strategies
While the governor admitted he cannot control all market variables, he emphasized that state leaders are working to bring developers and local governments together. Current strategies include exploring the use of surplus state-owned lands for residential development. Additionally, Cox pointed to a similar initiative led by U.S. Senator John Curtis, R-Utah, which focuses on utilizing underutilized U.S. Postal Service land to create affordable housing opportunities.
Economic Drivers of Demand
The housing shortage is driven by a combination of factors, including a strong state economy and low unemployment. New data released Friday showed Utah's unemployment rate remained at 3.6% in July, unchanged from the previous month.
Dejan Eskic, a housing analyst at the Kem C. Gardner Policy Institute at the University of Utah, previously told KSL that the state's high prices are a result of strong demand meeting a supply that has long lagged behind, a trend that predates the COVID-19 pandemic and the recent shifts in remote work and interest rates.
The Role of Short-Term Rentals
While short-term rentals are often discussed in the context of housing availability, experts suggest they are only one small part of a much larger problem. According to a report from the Kem C. Gardner Policy Institute released on Oct. 23, 2024, short-term rental listings account for approximately 1.9% of all residential units statewide.
Eskic told reporters that even if all short-term rentals were banned across the state, a housing shortage would still persist. He noted that many short-term rentals are second homes and that banning them in specific areas, such as Summit County, might not significantly increase the local housing supply for residents.
Geographic Impact of Rentals
Despite their small statewide footprint, short-term rentals have a disproportionate impact on specific tourism hotspots. A 2024 study found that over 60% of Utah's short-term rental listings are concentrated in Summit, Salt Lake, and Washington counties.
In Summit County, which includes Park City, short-term rental listings make up 41.7% of the city's total housing units. In Grand County, home to Moab, these rentals consume 18.7% of the housing stock. In contrast, short-term rentals account for only 1.1% of housing units in Salt Lake County.
Legislative Debate Over Control
Legislative debate continues regarding how to manage these rentals. In August 2024, Rep. Neil Walter, R-St. George, expressed intent to re-evaluate HB253, a 2017 law that prevents cities from prohibiting residents from listing homes on short-term rental websites.
Walter characterized the regulation of short-term rentals as a critical local control issue, arguing that municipalities should have the ability to enforce zoning laws to protect their housing supply. He noted that in St. George, an estimated 1,277 homes are listed for short-term rental, representing about 4.3% of the county's housing stock.
