SALT LAKE CITY — The demand for rental housing along the Wasatch Front has led to a jump in the number of high-density apartment and condominium units throughout the area.
And while some residents worry the large projects could diminish nearby home values, a new study indicates the opposite is true as prices for rental and single-family properties continue to climb.
A report released by the Kem C. Gardner Policy Institute at the University of Utah found that apartments built between 2010 and 2018 have had no adverse effects on the value of nearby single-family homes in suburban Salt Lake County. In fact, housing prices over the last decade have accelerated even as the residential real estate market has transitioned to the development of denser housing in a bid to slow the trend.
The study noted that existing residents often fear that densely developed housing will negatively impact their property values. However, the report shows that single-family homes located within half a mile of new construction apartment units saw higher overall price appreciation than houses located farther away.
Speaking Monday during a virtual roundtable discussion hosted by the Gardner Institute, senior research fellow Dejan Eskic said 9,600 rental units were built within the eight-year period of the study. Houses near those developments saw appreciation to their worth.
“When we look at the median market value per square foot of a single-family home, we see that homes that are within half a mile of the new apartments tend to have a higher per square foot value,” he said.
Homes located within 1/2 mile of a new apartment building experienced a 10% yearly increase in median value between 2010 and 2019, while those located farther away rose by 8.6%, he said.
The southeast area of Salt Lake County was the exception, with homes more than 1/2 mile away from new apartments experiencing higher average price appreciation than those situated less than 1/2 mile, the report states.
With high demand as one of the major contributing factors for the higher home values, a similar impact is felt in the overall rental market as more people look for apartments to live in. To that end, the state’s most populous county is working to develop solutions to address the growing issue of housing affordability.
“We work with local communities and developers in helping to finance some of the housing or at least try to fill the gap that developers need to make the units more affordable for a number of households that fall below 80% of (average median income),” said Michael Gallegos, Housing and Community Development director for Salt Lake County.