031Think Utahns love single family homes? You might be mistaken, at least in the current marketplace. Envision Utah recently charted building permits across the four-county Wasatch Front, using the Ivory-Boyer Construction Database at the Kem C. Gardner Policy Institute, and the results might surprise you.

Historically, about 75 percent of the housing units built have been single-family detached homes, but that all changed when the recession hit in 2008. Since then, half—or more—of our new housing units have been something else: a townhome, an apartment, or a condominium, for example. And the change has been even starker in Salt Lake County, where more than two-thirds of new units are attached products. It’s possible the mix will shift back, but unlikely. Market dynamics point toward a future where more and more of new housing shares walls or even ceilings.

We’re seeing this shift for a couple reasons. First, surveys and other metrics suggest preferences are changing, with Millennials more likely to want something other than a single-family home in a quiet neighborhood. This changing preference has been overstated by many observers—indeed, most Millennials would still prefer a single-family home—but there is a shift going on.

Second, almost all metro areas grow out to a point where a “rebound” starts to happen. When getting an affordable single-family home means driving in from a long way out, many people start to make the tradeoff to get a smaller unit or a smaller yard closer in.

Third, we have a limited land supply in most populated valleys. Envision Utah’s analysis of available land suggests there are only around 40,000 vacant developable acres left in Salt Lake County, 20,000 in Davis County, and 40,000 in Weber County. Utah County has over 200,000 acres left, which is one reason why growth is shifting that direction, although a lot of that land is on the south end of the county or in Cedar Valley.

The impact of this declining land supply is that land prices go up, which in turn drives housing costs up. And because of our mountains, when someone chooses to go farther out to find something more affordable, they’re going to the next valley over. That means a long commute, with implications for family budgets, congestion, infrastructure needs, and air quality.

In other words, get used to the new Utah housing market, because it’s probably here to stay.

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