Priced Out: Are there possible solutions to skyrocketing housing prices?
SALT LAKE CITY – As housing prices continue to soar in Utah, market analysts say there are things state lawmakers and city leaders can do to ease the strain on the housing market. Plus, there are some things customers can do to keep their monthly payments lower.
Earlier in our “Priced Out” series, we met Jennifer Hollander. She feels lucky she was able to find a small apartment in downtown Salt Lake City with her low-income housing assistance.
“Low-income housing in Salt Lake really, in my honest opinion, needs a lot of help,” Hollander said.
She said she didn’t even bother to find housing through HUD, saying she wasn’t able to wait that long. Hollander believes she would be living on the streets if she had to wait to get to the top of HUD’s waiting list.
“We tried it years ago when my mom lived with me, and they said that the waitlist was ‘years,’” according to Hollander.
Officials with the Housing Authority of Salt Lake City aren’t surprised it takes that long. Deputy Director Britnee Dabb said they had to close their waiting list for the Housing Choice Voucher Program, which is funded by HUD.
“We had about 7,000 families that applied, and we don’t get the money from the federal government to house all of them,” Dabb said. “We wish we could.”
Building different kinds of housing
All housing experts seem to agree that the problem revolves around supply and demand. Demand is sky high while supply is very low. So, can we increase the supply? Dabb says developers will have to start thinking outside the box.
She said, “[Don’t] just build what we have always built, but think more micro-units or tiny homes.”
Their agency estimates Salt Lake City needs 5,500 more housing units built just to keep up with the demand the city is facing right now and mixed-income developments are an effective way of building a tight community. She also said first-time buyers will have more luck buying townhomes, however, some cities don’t want those.
Utah Home Builders Association Executive Vice President Russ Ford said, “Depending on the city, they have all kinds of requirements of what the home will look like. [For example], the size of the home, what the shape of the roof is what material you put on the home and how many bedrooms you put in the home.”
Cities could relax regulations on home construction
Ford said if cities loosen their regulations on new home construction, developers would be able to put more homes on the market. Also, the association doesn’t believe building codes need to be updated as often as they are. Ford said whenever a natural disaster causes severe property damage, the state decides to change construction codes. However, the buildings that were damaged are usually very old, built under much older specifications, and current codes are usually fine.
“Sometimes it’s necessary. Sometimes it’s good, but sometimes it’s just really expensive and we’ve already got a really, really sound product,” Ford said.
He said the state recently made major changes to codes over energy conservation, which require new builds to be filled with so much insulation it becomes cost-prohibitive. Ford said developers are already having difficulty dealing with high prices of timber and steel.
Customers need to do more research
Is there anything we can do to put ourselves in a better position to afford a home? Housing analysts say there are several things that can customers can do to save money, but it requires a lot more research than most people do. Mortgage analyst Al Bingham said the vast majority of us don’t know our real credit score. He said lenders use the Classic FICO Score, and you can’t get that through most credit websites.
Bingham said, “You can’t access the Classic FICO Score, really, unless you go to a lender, you go to myFICO.com or you go to a certified credit counselor.”
Once you know your accurate score, Bingham said you can truly understand what how big of a loan you would qualify for, but, you shouldn’t apply for one right away. He believes you should find out your score six months ahead of asking for a loan, since you might be able to boost that score during that time.
“Sometimes, refinancing debt will do that. Closing accounts will do that… closing the right accounts,” Bingham said.
He also believes most customers focus a lot on their monthly payments, but they’re not focusing enough on building a large enough down payment for their new home.
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