SALT LAKE CITY — In his State of the State address, Governor Spencer Cox reiterated something he said last month to some of Utah’s most powerful business and community leaders.
"I believe the single largest threat to our future prosperity is the price of housing. Period," said Cox.
And those are not idle words.
"Housing attainability,” said Cox, “is a crisis in Utah and every state in this country."
"For more than a century,” he continued, “home ownership has been the cornerstone of the American dream. It is the key to financial independence, and the ability to break away from government support. Homeownership is also the key to family and community."
He says people who own homes care more about their neighbors, local politics, and have more financial and social capital. The Governor said recent polling indicates the two biggest issues for Utahns right now are inflation and the high cost of housing. And those two issues have far-reaching tentacles.
The historic rule of thumb has that roughly 30% of your income should go toward housing. But Dejan Eskic, Senior Research Fellow for Housing, Construction, and Real Estate at the Kem C. Gardner Institute at the University of Utah said, "If you pay more than 30%, you're considered cost burdened. And so in Utah, if we look at renters, about half of them are cost burdened, meaning they pay more than 30% of their income on housing."
Eskic said 15 percent of Utah renters are now paying 50% of their income to housing. “So the more burdened your population becomes the less they have an opportunity to spend money elsewhere. So this is why this is a big challenge for us," said Eskic.
And for renters who are trying to someday buy a home, the American Dream has become more of a pipe dream.
"It's a source of frustration for a lot of Utahns right now," said Steve Waldrip, Senior Advisor to Governor Cox on Housing Strategy and Innovation. He said a large portion of the rising generation, for no fault of their own, find themselves still living with mom and dad.
"And they can't fledge, they can't get out of the nest, because they don't have the opportunities that that once existed, that have come to define the American Dream, the opportunity to to go out and create your own wealth by purchasing property," he said.
He continued, “Property ownership is really the bedrock of our of our nation in our society. And it has been for a very, very long time, and that's in jeopardy right now."
Which is why Governor Cox has called for 35,000 new starter homes over the next five years. But there is so much more to solving this huge problem than just building more starter homes.
The financial markets, city planning and zoning commissions, the legislature, developers, and potential homeowners themselves all have roles to play in making it possible for wealth to be passed on to the next generation.
