Unaffordable Utah: Time to move or time for a reality check?
By Ladd Egan, KSL TV | Posted – Mar 27th, 2019 @ 7:20am
SALT LAKE CITY — It’s the flipside to Utah’s thriving economy and growing population: sharp increases in housing prices and the worry that living in the Beehive State is becoming unaffordable.
“The house prices are skyrocketing,” said Sandy resident Allison Froelich. “I’ve noticed that my overall monthly bills just keep going up.”
Froelich said the rising cost of living has become a daily topic of conversation at her house.
“My kids are already talking about moving to Texas,” she said, “because it’s cheaper to live there and they can make the same amount of money.”
Others echo her concern and the desire to move to other states where their paychecks will stretch further.
“It’s gotten out of control,” said Jordan Walker from Millcreek. “It’s just not affordable for us even with me graduating with a bachelor’s degree.”
“Property values are the main issue,” said Holladay resident Dennis Hummel. “I’m from back East and I’m cashing out and moving back there.”
Quality of life
They’re not the only ones feeling this way. In 2018, the Utah Foundation’s Community Quality of Life Index fell—for the first time—below its starting point from when the survey started in 2011.
Based off of Utahns’ perceptions of their communities, the quality of life index dropped to 70 out of 100 points last year. That’s a “significant” decline of three points since 2013, according to the report’s authors.
“Utah’s rapidly rising housing costs have made many Utahns feel like rents and ownership are no longer affordable,” the report said.
“The perception of that housing affordability has drawn this index down,” said Utah Foundation’s research director Shawn Teigen. “So we’ve lowered our quality of life over time even with an improving economy.”
When asked about their personal quality of life, Utahns responded with a similar anxiety.
“Being ‘secure financially’ is far and away the poorest performing measure among the personal quality of life questions,” the report said.
Cost of living
Carrie Mayne, the chief economist for the Utah Department of Workforce Services, said Utah residents are right to be concerned about housing affordability.
“What we’re hearing a lot about is people seeing their paychecks rise, but not to the degree that they can go and purchase a home,” she said, “and that’s discouraging for those job seekers and it could dampen our economy in the long run.”
But there is good news when it comes to paychecks, Utah saw the largest increase in real personal income in the nation in 2016, according to the Bureau of Economic Analysis. Utah’s real personal income grew by 3.3 percent, compared to the national average of 1.1 percent.
While housing is an area of concern, Mayne points out that Utah’s economy continues to see sustainable growth with low unemployment, healthy job growth, and a lower-than-average cost of living.
“We’re actually a pretty low cost-of-living state,” she said. “We’re definitely below the average.”
For a reality check, she points to a regional price parity index that allows economists to compare the cost of living and the differences in prices from state to state. The Bureau of Economic Analysis puts the national average at 100 for the cost of a collection of goods, services and rent.
In the most recent index from 2016, Utah was below the national average with a regional price parity of 97. That means your dollar buys you more in Utah when compared to high cost-of-living areas like California (114), New York (116), and Hawaii (118).
It should be noted that Utah is also considered a low-wage state, Mayne said. One of the main reasons for the lower wages is Utah’s young population.
“When you have larger portion of your total workforce more in their entry level wages, then, of course, that average is going to be pulled down,” she said.
How you feel about Utah’s cost of living could depend on how long you’ve lived in the state and if you moved here from a more expensive area.
“You see someone who’s sold their home in California and comes and pays cash for their house here in Utah,” Mayne said. “So it is attractive in that sense.”
“Compared to Denver we’re actually sitting in a pretty good place,” Teigen said.