Many Utah homebuyers feel there is nothing to do but wait until the housing market stabilizes, but patience is a luxury not everyone can afford. For some, neither is rent.
According to RentData.org, Salt Lake City’s median rent for a one-bedroom apartment has increased 11% from $1,001 to $1,112 over the past year, a rate significantly higher than the norm. Combined with wage stagnation, rent hikes are straining renters’ budgets.
“Income isn’t increasing as fast as rent is increasing,” explained Tony Milner, director of Salt Lake City’s Housing Stability Division.
Utah’s minimum wage has remained at the federal level of $7.25 per hour, where it has sat since 2008. Most employers pay employees a higher wage than the minimum, Milner said, but when considering the state’s low rate of unemployment, a stark truth is made clear.
“Everyone’s working, but they still can’t afford rent,” Milner said.
Rents are skyrocketing in large part due to the scarcity of rental properties across the Salt Lake valley. Milner said Utah’s vacancy rates, which were already low, have plunged down to nearly 1%.
This can make it a challenge to find a place to live.
“I spent over a year apartment hunting,” said Paige Ney, a marketing student at Salt Lake Community College who shares an apartment with three roommates. “It was really difficult to find any place that was affordable.”
While Ney doesn’t have plans to move any time soon, she acknowledges there will come a day when she has to reenter the housing market as either a renter or buyer.
“That’s been a pretty big concern of mine,” she said.
While a high demand for housing might suggest opportunities for developers, recent economic developments have made building difficult.
Because of the COVID-19 pandemic, the global supply chain has been strained beyond its limits, which, in turn, has curbed building projects.
“With COVID, the construction market kind of shut down, so we weren’t able to add units and the pressure just kept growing,” said Sahil Oberoi, director of Housing and Case Management at Utah Community Action.
A diminished workforce isn’t helping things, he added. “You can’t get supplies, and if you can get supplies, you can’t get labor.”
What’s more, the number of people moving into Utah from out-of-state has only increased, resulting in an even more competitive market that forces some residents, including SLCC students, to make difficult choices.
Ryan Farley, associate vice president for Enrollment Management at SLCC, knows education can be an unfortunate casualty of higher rents. Anytime purchasing power is lessened due to economic factors, “that pushes schooling further down the list of priorities, simply because basic needs need to be met first,” he said.
It’s not just a matter of money, Farley continued, as students are finding themselves working longer hours to keep up with living costs, and when work hours go up, school hours go down.
“It certainly does impact our enrollment,” he noted.
Cody Gearheart, a film production student at SLCC, is finding it difficult to move away from home, where he lives with his mom and younger brother.
“There’s not a lot of affordable options, and the options that are more affordable aren’t the best living conditions,” he said, describing what he feels is an inverse relationship between price and comfort.
Milner refers to this phenomenon of adult children remaining at home as “delayed launch,” as young adults don’t have the means to live independently like they once did.
“I do want my own place,” Gearheart said. “I want to get moving in my life.”
It seems that for many, life can’t begin until the rent spike ends.