On today’s show we are taking a snapshot look at how one state is trying to address housing affordability.
Home pricing follows the laws of supply and demand. Sellers put their home on the market and buyers place an offer. That price might be low than asking price, higher than asking price, or at the asking price. It’s a full contact negotiation. There is nothing compelling a buyer to pay a particular price. If the buyer and seller can’t come to terms, then no deal gets done. This is the classic process of price discovery.
Some jurisdictions have been addressing affordability by applying downward pressure on landlords and developers. Those greedy landlords are to blame for the lack of affordability. I’m thinking of places like California that have imposed state level and even municipal level price controls on rental housing.
The effect of these measures is to discourage landlords from entering the market. The net result is fewer landlords, fewer rental properties and therefore higher rental rates.
The state of Utah on the other hand has been growing rapidly and has experienced net migration growth for 31 out of the last 32 years. Utah also has the highest birth rate in the nation and is one of a very states that is growing organically.
The state has also taken a very enlightened approach to encouraging new product to enter the market. The first step to encouraging growth is to remove the bureaucratic obstacles to growth.
The legislature has implemented 10 initiatives aimed at reducing bureaucracy and encouraging development.
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Host: Victor Menasce
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