Friday, May 29, 2020


Moab, UT

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    Study: Half of Moabites can’t afford housing

    Grand County has the least affordable rent in the state

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    Most single-family houses like this one, when they are available for sale, are far out of reach for most Moabites’ incomes. Low-density residential zoning in Moab is partially to blame for the market condition, which pushes out many potential homebuyers. Photo by Carter Pape

    Among the findings from a study submitted to Grand County and the City of Moab last year, an economic consultant found that the cheapest home sold in 2017 was too expensive for half of Grand County residents.

    A separate report from the State of Utah showed that, for more than half of locals, the area’s typical cost of rent was unaffordable in 2018. It also showed that Grand County had the largest shortfall between the area’s typical income and the area’s typical rent.

    The state’s report showed that Grand County’s median income was among the lowest in the state while also having rents higher than half of Utah’s counties.

    BAE Economics, an economics consulting firm, completed the first study after being hired to do so by Grand County and the City of Moab to investigate the feasibility of an affordable housing fee on developers to fund the construction of workforce housing.

    Both BAE and Utah’s Department of Workforce Services, which completed the second study, collected data on household incomes in Grand County from the U.S. Census and prices of home sales documented through various online real estate websites.

    Both studies used 30% of household income as the threshold for what is considered affordable, the definition used by the U.S. Department of Housing and Urban Development.

    Increasing property values, decreasing wages

    A manufactured house for sale in Grand Oasis. Photo by Carter Pape

    The two studies by BAE and the state both indicate that the affordability of housing in Moab has only worsened over time.

    “Between 2014 and 2017, the median price increased by 30 percent for townhomes, and 42 percent for single-family homes and condominiums,” the BAE study reads.

    This growth is contrasted by a decline in wages in the county. According to a report last year from Utah’s Department of Workforce Services, the average income in Grand County declined by 2% from 2009 to 2016.

    “The area’s rapidly appreciating home prices has made housing out-of-reach for many working families,” the study from BAE Economics said. “Housing costs have increased rapidly, substantially outpacing increases in household incomes.”

    Slowed housing development, growing population

    Photo by Carter Pape

    In its report, the Utah Department of Workforce housing blames “rapidly growing population and lagging housing production” as main causes of housing shortage in the state.

    BAE Economics blamed similar trends in its report, adding that tourism-related developments, as previously reported, are outcompeting housing developers for construction labor, driving up property values and bringing in more demand for an already limited supply of workforce housing.

    BAE also pointed out that limits on the density of housing developments in the city and county made building apartment complexes infeasible for developers. “Rental apartments could be feasible if the city or county allowed greater density for apartment projects,” the report reads.

    Moab and Grand County councils respond

    Photo by Carter Pape

    The county’s high-density housing overlay zone, which passed earlier this year, raised feasible densities for housing development in much of the unincorporated parts of the county, creating a greater economic potential for developers to build apartments in some parts of the county.

    Within city limits, the possibility of redeveloping areas that currently have low-density, high-cost housing is limited despite recently passed legislation.

    The city’s planned affordable development ordinance seeks to create more housing opportunities in some of the residential zones in town but will impact a minority of residential areas due to the R2 zone, the largest residential zone in the city, being excluded from the plan.

    Residents in the affected zones have pushed back against the plan by asking the city to repeal it, saying that it “discriminates” against some residents, will hurt “historic old Moab,” and that it is “unnecessary and unfair to alter existing residential zones with extreme high density, in an attempt to solve an affordable housing dilemma.”

    Should the city keep zoning allowances at their current limits, anyone seeking to redevelop property inside city limits will be limited to building relatively low-density housing like detached, single-party homes rather than higher-density condominiums and apartments, which tend to be more affordable.

    Despite high rents, more rental properties unlikely

    The Entrada Apartments on 400 North are primarily rented out as short-term rentals. Photo by Carter Pape

    BAE’s 2018 study said rental housing in Grand County, compared to the cost of buying a home, is “priced more reasonably.” Nonetheless, it painted a bleak picture of high costs relative to workers’ income, corroborated by a 2018 report from the Utah Department of Workforce Services.

    “In Utah, the median gross rent is particularly concerning in Grand, Iron, Morgan and Washington counties, where the median rent exceeds 30 percent of the county’s median income,” the DWS report reads.

    The same report from the state ranked Grand County fifth in the state for the number of renters per capita (i.e. per household overall) and first in terms of the number of “severely cost-burdened” rental households (i.e. households spending at least half of their income on rent) with roughly 25% of renters falling into this category.

    Despite these high rents, building more apartments, condos and other rentals is not likely in the near-term because of the lucrative nature of building other types of developments on such properties.

    “Apartments were not feasible […] in either the moderate or strong market conditions, largely because rents were not high enough to offset the cost of land acquisition and new development,” the BAE report reads. “This suggests that despite the large and growing demand for housing, the market will likely under-deliver this product type due to low profit margins.”

    Out of all counties in the state, Grand had the largest shortfalls in the costs of rent in 2018. This means the typical rent in the county was significantly higher than the area’s typical income. Table courtesy of the Utah Department of Workforce Services

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