Property developers in Salt Lake City might need to comply with a controversial measure, which would require them to include low-cost-units on residential projects.
The local government has considered whether or not to impose “inclusionary zoning.” The concept has been implemented in other parts of the U.S., where projects consist a certain number of affordable units priced below the market rate.
Home buyers would benefit from the regulation, as affordable homes in the city have become rare. The faster pace of home price growth than salaries also worsened the situation. While prospective homeowners may apply for personal or signature loans in Salt Lake City to help in financing, the government still wants to make low-cost housing accessible to more buyers.
However, the measure may not just increase construction costs, but also prompt home builders to delay future projects, according to Jason Mathis, Downtown Alliance executive director. Despite the intended pros and cons, local officials and real estate companies need to reach a consensus, since Salt Lake City is expected to be a “hot” market for home purchases in 2018.
Realtor.com said that the city would become the top sixth housing market in the U.S. next year. The market should be more favorable for buyers, following sharp home price hikes due to a shortage of homes, according to Realtor.com chief economist Danielle Hale.
For this reason, the public and private sectors need to support any improvement in the market. An increase in supply will largely determine any increase in home prices and hasten the process of selling properties. Hale said that real estate prices and sales to increase 4.5% in the next 12 months.
Affordable housing in Salt Lake City remains an important issue, as long as people continue to find it hard to buy homes within their budget and salary.