No one is building condos anymore. Experts are trying to figure out why

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Last year, builders assembled more housing units than at any time in the past four decades, and virtually all of them were rental homes.

For decades, condominiums made up about 20 percent of all attached housing stock built in the U.S. leading up to 2005. The share of attached condos rose to 53 percent in 2005 before quickly falling to a low of 5% in 2022, according to the National Association of Home Builders.

The shortage of newly built attached for-sale units at a time of high rates and high home prices is robbing the market of potential starter homes, according to experts who are working on the issue.

“For our neighborhoods and centers to be most effective it is critical that the full array of housing types are available,” said Mike Hathorne, an urban planner and chair of CNU-Utah. “Condos are an important part of this.” 

The Utah chapter of CNU — short for Congress for the New Urbanism — has organized a free event on Friday to bring together developers, researchers and lawmakers to discuss what barriers are in place preventing condos from being built.

Hathorne says the need is urgent as the U.S. undergoes a massive demographic change.

“Household types have shifted in a way that requires the availability of condos as part of the housing type palette,” said Hathorne, who lives and works in Daybreak. “Households with people living alone have surpassed households with children. Different household types require different types of housing. Condos are part of the solution to meeting needs associated with both demand and affordability.”

REGISTER FOR THE FREE EVENT ON FRIDAY, APRIL 12 IN SALT LAKE CITY.

Indeed, the number of U.S. households with no children is now larger than the number of households with kids, and it’s growing at a much faster rate.

Baby Boomers, meanwhile, own the largest share of housing stock yet have reached an age where kids are no longer living at home. But many plan to stay put amid a shortage of alternative housing options that would suit their lifestyles.

Efforts among Utah lawmakers often aim to make it easier for homebuilders to create suburban-style housing on farmland and other greenfield while overlooking changes that could spur more for-sale housing stock.

Meanwhile, record-low borrowing costs spurred investors to scoop up housing projects to hold in their portfolios, providing a market for developers to sell to.

CW Urban, an infill developer and Building Salt Lake advertiser, had planned to deliver two new condo buildings near Downtown in 2021. Instead, it converted the projects to rental apartments and sold the buildings before they were completed and occupied.

Other developers point out that they already face inherent risks when developing any housing project, and that condo liability laws increase the legal risks they’d be exposed to if they built condos instead of apartments.

Rep. Ray Ward, R-Bountiful, and Sen. Nate Blouin, D-Millcreek, will join a panel during the event at the Main Library on Friday. Both have signaled an interest in making policy changes to spur more housing development.

“Our industry is not providing housing opportunities for those who want to live in our urban centers long-term and build wealth,” said Austin Taylor, another CNU member who is helping organize the event. “CNU Utah is honored to welcome experts representing multiple disciplines across the commercial real estate industry to talk about why condominium development is not happening and how we can change that. We hope anyone who is interested will come to listen and learn.”

Other speakers:

  • Dejan Eskic, Senior Research Fellow at Kem C Gardner Policy Institute
  • Derek Allen, President at LandForge
  • Peter Harrison, Partner at Miller Harrison Lawyers
  • Michael Vela, Principal at HKS
  • Jarod Hall, Owner and Architect at di’velept design
  • Steve Waldrip, Senior Advisor for Housing Strategy and Innovation at State of Utah
  • Representative Raymond Ward
  • Senator Nate Blouin

Email Taylor Anderson

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Posted by Taylor Anderson

Taylor Anderson grew up near Chicago and made his way West to study journalism at the University of Montana. He's been a staff writer for the Chicago Tribune, Bend Bulletin and Salt Lake Tribune. A move from Portland, Oregon, to Salt Lake City opened his eyes to the importance of good urban design for building strong neighborhoods. He lives on the border of the Liberty Wells and Ballpark neighborhoods.