Salt Lake County’s Historic Apartment Boom
The Kem C. Gardner Policy Institute at the University of Utah released a report shedding light on Salt Lake City’s apartment housing boom. The report found that Salt Lake County communities have issued permits to add about 46,100 apartments since 2000. The to meet the needs of a growing number of people relocating to Salt Lake City. The report says another 18,167 units expected by 2024.
Key Findings
- The county’s rental vacancy rate dropped to about 2% for the first time. It’s estimated there were only 3,000 vacancies among 148,500 rental units last year. The previous low was 2.6% in 2017, and it’s remained below 4% since 2012.
- The average cost for a rental unit — a combination of studio, one-bedroom and multi-bedroom apartment units — has skyrocketed during the same span. The average rate nearly doubled from $720 per month in 2010 to $1,301 in 2021.
- The average cost of studio and one-bedroom units had the largest percentage increases since 2010, of 104% and 89%, respectively. There was also a 10.1% jump in average rental unit rates from 2020 to 2021, as the vacancy rate fell from 3.9% to 2%.
- One in five renters faced housing cost burdens in 2009, meaning that at least 30% of their income went toward rent. It jumped to 41% by 2018, per U.S. Department of Housing and Development data. Nearly 60,000 renters dealt with cost burdens in 2018.
Supply Trend (2000–2021)
Unprecedented Apartment Boom From 2000 to 2010, the number of permits issued for apartment units in Salt Lake County totaled 11,600 units, an average of about 1,100 units annually. This relatively modest level of apartment construction preceded the shift in demand to rental housing and the boom in apartment construction following the Great Recession. From 2011 to 2021, 34,500 apartment units received building permits, triple the level of activity during the 2000–2010 period. Nearly 90% of these units have received permits since 2014. An all-time record number of apartment units received building permits in 2021, 6,672 units. Since 2014, 43% of the apartment units receiving building permits have been located in Salt Lake City (13,400 units), and 24% have been located in Salt Lake City’s downtown (7,500 units). Of the 18 cities in Salt Lake County, only one other accounted for more than 10% of new apartment construction, Sandy City, with an 11% share (3,300 units).
Three Year Outlook
Will Experience Oversupply Over Next Three Years The countywide rental market will continue to favor landlords, although the vacancy rate will see an increase to 5.7%, giving renters some relief by 2024. The Salt Lake City market will likely experience higher vacancy rates as the nearly 8,000 units under construction reach the market. The under-construction units
represent a 15% increase in the Salt Lake City rental inventory. The Salt Lake City market is not a substitute for the county market; that is, suburban renters, in most cases, can not or will
not move to a vacant unit in the city due to the much higher rental rates in the city. The 3,974 units under construction in Salt Lake City’s downtown market will have rental rates at least 30%
higher than rents in the county, creating slower absorption rates of new units and higher overall vacancy rates.
