Utah County Housing Authority Director Gene Carly says he hopes a University of Utah researcher's study of a local housing problem will attract the attention of two groups - community leaders and local investors.
The study, done by James A. Wood, a senior analyst with the Bureau of Economic and Business Research, says the county has between 750 and 1,000 fewer rental units than it ought to have. Utah County's vacancy rate is below 3 percent, and that many units would be necessary to increase the vacancy rate to about 5 percent, the level that housing officials say is needed for a stable rental market."I think this should tell local leaders that we have a serious housing problem," Carly said. "They have been doing a great job of creating jobs, now they need to address where those people doing those jobs are going to live."
The study shows that during the past five years the county's non-agricultural jobs increased by more than 20,000. However, during that same period only 3,800 new homes and 1,445 new rental units were built. Carly said these figures should tell investors there is a need for more housing.
"Investors have had a good idea that housing is needed, but maybe this will make up the minds of those who were not sure. I don't think there is any doubt that more construction is needed," Carly said.
The increased housing demand has caused rents to increase sharply, in some cases more than $100 a month during the past year. According to the study, the average monthly rent for a two-bedroom apartment is $350 in Provo, $310 in Orem and north Utah County and $270 in south Utah County. The study says many landlords plan to raise rents again this fall.
Even though Utah County's rents have increased, the study says the county's wages are not keeping pace. The state's average annual wage increase during the past 10 years has been 4 percent. Utah County's annual wage increase has only been 3.6 percent.
"The important implication of this low wage rate is the financial squeeze renters are bound to experience as wage rates lag behind the increases in rental rates," the study says.
The county's 1989 average monthly non-agricultural wage was $1,366, only 86 percent of the state average. Average wage rates in Davis, Weber and Salt Lake counties are all higher than in Utah County.
"You couple slow wage growth with a very large number of people moving into the county, and that spells concern for those people who are renters," Carly said.
To give community leaders some direction, the study contains a detailed analysis of the housing situation in each of the county's 14 cities. It also gives projected housing needs for the next five years. The survey was paid for by eight different agencies.
What market is like
Characteristics of Utah County housing market:
- Low vacancy rate that drives rents up.
- Large student population accounting for 48 percent of all renting households.
- Potential for increase in student population.
- A highly segmented renter market.
- A large migrant worker population that needs low cost housing for a four-month period.
- Rapid rapid growth with low wage rates.