Rent hikes slow down in 2019 – will increased supply reinforce that trend in 2020?
After a raucous 2018 for rent hikes in Utah cities, 2019 brought stabilization and less pain for renters in most locales. While cost-of-living increase for 2019 was 2.8%, rent ticked up less than that in most (60%) of Utah cities included in our data set.
Is this a “wind down” of greater-than-national-average yearly rent increases in Utah, due to our recent construction boom? Demand remains very strong for new apartment product in urban Utah, so new supply added to the market may not be making a measurable difference in slowing down rent increases.
The table below shows rents, rent increases, and new units being built in cities along the Wasatch Front.
Rent increases and new units built 2017-19
| City | 2017 | 2017 | 2018 | 2018 | 2019 | 2019 |
|---|---|---|---|---|---|---|
| rent | # units built | rent / Y-o-Y increase | # units built / Y-o-Y increase | rent / Y-o-Y increase | # of units built / Y-o-Y increase | |
| Salt Lake City | $1115 | 586 | $1204 / 8% | 814 / 40% | $1245 / 3.4% | 3845 / 476% |
| West Valley City | $1056 | 83 | $1123 / 6.3% | 97 / 16.8% | $1114 / -.8% | 322 / 311% |
| Provo | $1352 | 35 | $1414 / 4.6% | 308 / 880% | $1413 / -.1% | 283 / -8.1% |
| Orem | $1184 | 327 | $1243 / 5% | 471 / 44% | $1228 / -1.2% | 797 / 169% |
| Ogden | $808 | 75 | $876 / 8.4% | 27 / -64% | $941 / 7.4% | 293 / 1085% |
| Sandy | $1214 | 416 | $1226 / 1% | 191 / -54% | $1271 / 3.7% | 262 / 137% |
| Layton | $951 | 158 | $1036 / 8.9% | 180 / 13.9% | $1059 / 2.2% | 79 / -56% |
| Taylorsville | $919 | 148 | $998 / 8.6% | 156 / 5.4% | $1018 / 2% | 146 / -6.5% |
Salt Lake City’s 3845 multifamily units permitted to be built in 2019 – an increase of 476% over its previous 814 units in 2018 – surely stands out. Will so many new units on the market in 2020 cause the capitol city’s rent increase to drop below its 2019 rate of 3.4%?
SkyHouse, 300 W + N Temple, SLC 
Garden Lofts, 200 W + 600 S, SLC
That Salt Lake City rental growth rate – 8% in 2018 and 3.4% in 2019 – outpaces the national average. US rents grew at 3.2% in 2018 and 3% in 2019.
Rent in Utah cities is still below the national average ($1474 US, $1191 UT) as of November 2019, a “weighted average” rent in buildings with 50+ units (Yardi Matrix data).
