The Utah housing market is currently suffering a severe imbalance of record-shattering price spikes and an unprecedented shortage of housing units. The housing crisis is particularly acute for renters, where available apartment units are difficult to find. For tenants lucky enough to find a rental unit, they can anticipate regular and substantial rent hikes.

Renters in general, and particularly the lowest-income renters, have borne the brunt of the economic repercussions resulting from the COVID-19 pandemic. One of the most significant challenges for lower-income individuals and families is the short supply of affordable housing. Nationally, 24% of renters spend over half their income on rent — leaving very little money left over for necessary expenses like transportation, food and medical care.

There is a massive supply shortage of affordable housing units in Utah. According to the state’s Affordable Housing Report, released in 2020, there is currently a shortage of 40,725 affordable dwelling units in Utah. In March 2020, the National Low Income Housing Coalition estimated that Utah only had 31 affordable units for every 100 extremely low-income renter households.

The term “affordable housing” can be a misnomer for many people. At first blush, some think of depilated, inner-city, concrete, bunker-like “projects” as affordable housing. These same people might be surprised to know that the American Institute of Architects issues annual design awards for cutting-edge affordable housing projects. Similarly, the data supports the fact that affordable housing has no negative impact on surrounding home values.

The phrase “affordable housing” covers a wide range of household and personal incomes. According to the Department of Housing and Urban Development, “very low income” — is a four-person household with an income less than 50% of the local area median family income. In Weber County, for example, this would equate to $35,637 annual gross income for an individual. To put that number in perspective, starting salaries for schoolteachers in Weber County are not much higher.

The Low-Income Housing Tax Credit (LIHTC) program is the most important resource for creating affordable housing in the United States today. Created by the Tax Reform Act of 1986, the LIHTC program gives state and local LIHTC-allocating agencies the equivalent of approximately $8 billion in annual budget authority to issue tax credits for the acquisition, rehabilitation or new construction of rental housing targeted to lower-income households.

Aside from the altruistic benefits of LIHTC, the economic and tax benefits of this affordable housing program are tremendous. According to the National Association of Home Builders, the LIHTC program has generated $310 billion in local income and $122 billion in tax revenues and has supported approximately 3.25 million jobs over the last 30 years. In Utah, the economic impact generated by affordable housing is equally impressive.

Our development team just completed a 105-unit affordable housing project in Ogden — which is dedicated to senior citizens aged 62 and older. The development of this project supported 187 jobs, created an economic impact of $34,168,631 on the state and local economy and is estimated to have a $1,400,000 annual impact on local tax revenue. More importantly, the demand from prospective tenants has been astounding. Most affordable housing projects in Weber County have a two- to three-year waiting list for prospective tenants, and very few affordable housing projects are set aside for senior citizens.

The private sector, community leaders, elected officials and municipal staff must do more to address the unprecedented demand for affordable housing in Utah. Zoning restrictions, expensive permits and fees, and general attitudes surrounding affordable housing need an overhaul. If we want our schoolteachers, police officers, firefighters, college graduates and senior citizens to have safe, clean and affordable housing, we all need to prioritize how we best accomplish this goal.

Bill Knowlton is a fourth-generation real estate professional in Utah. He is a real estate attorney and land developer, with an emphasis on affordable housing.

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