The apartment boom continues in Salt Lake. A few thousand residential units are actively under construction, yet rents are rising. For example, rent for a one bedroom apartment at the newly-opened Encore Apartments, near 500 East on 400 South, starts at $1299, while a two-bedroom starts at $1699.
While rents are rising, for many residents incomes aren’t. According to a 2014 report from Apartment List, an online rental marketplace, 49 percent of Salt Lake renters are cost-burdened, with more than 30 percent of their income going towards housing costs. To determine their rankings, researchers analyzed census data from 2007 to 2014 and compared rental costs to incomes.
Salt Lake City area residents aren’t the only ones struggling to pay the rent, according to the same report 46.6 percent of Utah renters are cost-burdened, a four percent increase since 2007.
Nationally, 51.8 percent of renters are cost-burdened. Rising rents don’t necessarily indicate cost burden. Renters in San Francisco, the most expensive city in the country, are less cost-burdened than in Salt Lake. According to Apartment List the median rent for a two-bedroom apartment is San Francisco is $3500, over four times the median rent of a two-bedroom apartment in Salt Lake, at $750. Yet, 43 percent of San Francisco renters are cost-burdened, six percent less than in Salt Lake. But incomes are much higher in San Francisco than in Salt Lake. According to U.S. census data, the median income between 2009 and 2013 is nearly $30,000 higher in San Francisco than in Salt Lake, with median incomes of $75,604 and $45,862 respectively.
Rents in Salt Lake are increasing near the national average. Rents in the city have grown by a year over year average of 4.4 percent, compared to 4.0 nationally. In comparison, rents in San Francisco had a year over year increase of 8.8 percent.
City leaders have acknowledged the growing need for affordable housing. Last January, Salt Lake City leaders launched the 5000 Doors Initiative, a citywide plan to add 5,000 affordable housing units over the next five years.Certain professions are more likely in Utah to be housing cost burdened.
In a 2014 report from Zillow, an online real estate marketplace, the Salt Lake and Provo metros areas ranked second to last and last respectively among the largest 100 metro areas in housing affordability for teachers. According to Zillow, teachers in Salt Lake could afford just 26.3 percent of available homes, while Provo teachers could afford just 23 percent.
Last year the Salt Lake City Council approved low-interest housing loans to developers of several different affordable housing projects, including to workforce housing project near downtown: the 9th East Lofts at Bennion Plaza and the 616 Lofts.
Construction is underway on the Ninth East Lofts at Bennion Plaza, a six-story 68 apartment-units mixed-use project at 400 South block of 900 East. The project will reserve half of its units for residents earning up to 60 percent AMI.
Wasatch Group plans to build the 616 Lofts on the southwest corner of the 600 South and State Street intersection. The project will be entirely workforce housing, for residents earning between 60 to 80 percent of the Area Median Income.
In December, the city selected Cowboy Partners and Form Development as the team to redevelop the Historic Northwest Pipeline building (the former Public Safety Building) at the intersection of 200 South and 300 East. The 248-unit project will include a mix of affordable and market-rate residential units, the construction of two new residential buildings and the renovation of the pipeline building.
There appears to be some relief for renters. According to Apartment List, in most U.S. cities rental increases appear to be slowing after the growth rate dropped for the first time last year between November and December. Apartment List analyzed thousands of the site’s own listings to measure monthly grown in the median rents across the country.