Nolan Gray is a research fellow with the Mercatus Center at George Mason University and a professional city planner.
The U.S. housing affordability crisis is national in its scope, but media coverage tends to focus on California cities like San Francisco, San Jose, and Los Angeles, where skyrocketing rents and a blossoming YIMBY (“Yes In My Backyard”) movement have incited a response from lawmakers. In his inaugural address earlier this year, newly elected California Governor Gavin Newsom called for a “Marshall Plan” for affordable housing that would add 500,000 new homes in the Golden State per year.
But the fastest home price appreciation in 2018 didn’t happen in California, New York, Washington State, or other coastal states. It hit Nevada, where cities like Las Vegas, Reno, and Carson City are returning to the prices not seen since the 2008 bubble. Mid-size Colorado cities Boulder and Fort Collins top the list of cities with a high percentage of households spending more than 30 percent of their income on housing, with rates nearing 60 percent. And an increasing number of high-school graduates in cities like Boise and Salt Lake City are finding themselves priced out of their local housing market altogether.
Some blame the Mountain West’s budding housing crisis on all those newcomers priced out of coastal cities, and there is an element of truth to this hypothesis. But the other explanation may simply be that its cities are attractive—and relatively affordable—places to live. Over the past five years, Colorado and Utah have had the fastest growing economies among the states—with Nevada and Idaho not far behind. In addition to traditional sectors like tourism and resource extraction, tech firms have been expanding into the region. As a result, incomes have shot up and unemployment has taken a nosedive. With low taxes, high quality public services, and world-class outdoor amenities, the Mountain West is an easy sell.
But all this population growth puts the region’s policymakers in a bind: If housing costs are already soaring, what would another decade of over 10 percent population growth mean for housing affordability?
Thus far, most of the housing affordability discussion has focused on increasing state housing expenditures. In both Arizona and Colorado, legislators are looking for ways to shore up their respective housing trust funds. But this strategy has limits. For instance, generously supported funds in nearby California and Washington build, at most, a few thousand units a year. Meanwhile, in 2018 alone, Arizona and Colorado grew by approximately 100,000 and 80,000 residents, respectively.
To meet that level of demand, the Mountain West will need to allow for a lot more housing construction, which means easing up on restrictive land-use regulations. That’s what California State Senator Scott Weiner had in mind when he introduced SB 827 in 2018, a bill that would have seen the state override local zoning rules to allow for new apartments in transit-rich areas. The bill died in committee, but Weiner recently reintroduced a new version for the 2019 session.
Zoning reform is also needed in the Mountain West, but pushing such a policy in a more conservative region will take a different approach. A bill recently passed by the Utah State Senate—SB 34—may provide one possible model. Like a policy that’s already in place in states like California and Washington, Utah State Senator Jacob Anderegg’s plan requires that cities plan for housing affordability and take action. Cities and suburbs that don’t make a good faith effort to facilitate new housing construction would run the risk of losing coveted state highway funds.
But unlike pro-housing reforms proposed in coastal states, the Utah bill keeps local government mostly in control of how they choose to address the crisis. Municipalities facing a housing crunch would have to adopt at least three policies from a menu of popular housing reforms—policies that run the gamut from bread-and-butter housing policy to radical reforms. More conservative options, like starting a community land trust or purchasing and preserving existing affordable units, are still on the table. So, too, are permitting accessory dwelling units and lowering parking requirements.
The balance of support for SB 34 comes from a very different place, ideologically, than similarly intended pro-housing California regulations, which found support among social justice activists and environmentalists. Anderegg describes himself as a “conservative, borderline Libertarian Republican,” and with 23 of Utah’s 29 State Senate seats occupied by Republicans, the bill’s appeal to deregulation and property rights likely carried more water than its potential to address spacial inequality and access to public transit.
Still, SB 34’s more ambitious options read like a YIMBY wish list: For example, cities can meet their state obligations by legalizing single-room occupancies, relaxing minimum lot sizes, or encouraging the conversion of unused retail strips into mixed-use residential. This kind of modest densification won’t turn the Wasatch Front into Midtown Manhattan, but it could encourage building more of the infill housing Utah needs, and help contain the sprawl that threatens to consume more of the region’s treasured natural areas.
The key question is, will there be a political future for Utah-style pro-housing regulations in the region? It wouldn’t be the first time the state has been something of an unlikely leader in housing policy: Back in 2005, Utah was a successful early adopter of Housing First policies addressing homelessness, for example. Other factors could work to help spread the state’s liberalizing reforms. Mountain West policymakers have a nearby reminder of just how bad housing affordability could become, via neighboring California. Compared to the dramatic fixes currently at play there, SB 34 may offer a relatively unobtrusive means of avoiding that fate.
The bill also provides a conservative-friendly way for red states like Idaho and Utah—as well as purple states like Colorado and Nevada—to approach the issue of housing affordability. SB 34’s mix of reforms could prove attractive to conservative homebuilders and progressive housing activists alike. If it succeeds, Anderegg and his co-sponsors could provide a model for YIMBY politics that rivals California.