Salt Lake apartment construction slows down
Add Axios as your preferred source to
see more of our stories on Google.
New apartment construction in Salt Lake is projected to slow after last year's record building boom.
Why it matters: Rents are already bobbing back up amid Salt Lake's persistent housing shortage — reversing the short-lived signs of relief that followed 2023's construction spree.
By the numbers: About 3,770 apartment units are projected to be completed in the Salt Lake metro area this year, per a recent analysis by RentCafe.
- That's a sharp decline from the 4,525 units that were projected for 2023 at this time last year.
Driving the news: A rush of new apartments, financed when interest rates were lower, briefly helped to ease rent hikes.
- A construction cooldown now could push rents back up and keep them high for years.
Reality check: New construction is hardly petering out in Salt Lake; it's just not expected to match last year's explosive growth.
- Since 2019, Salt Lake has been marked by years of huge growth interspersed with years of paltry construction.
What's next: About 18,279 new units are expected to open from 2024-2028 — up about 4.5% from the 17,495 built during the previous five years, RentCafe estimated.
Friction point: The metro population — which includes Salt Lake and Tooele counties — is expected to grow by about 6% by 2028, per estimates released this month by the University of Utah.
- Meanwhile, renters aren't moving on to homeownership like they used to, which could create a bottleneck that drives demand even higher.
The intrigue: Most new apartments nationwide are amenity-packed luxury units — not the affordable rentals many people want.
- The average asking rent for larger properties with multiple units in Salt Lake was roughly $1,600 in the second quarter — 21% higher than pre-pandemic levels, according to CoStar Group data.
Caveat: RentCafe's data focuses on large apartment complexes, so it doesn't reflect Salt Lake's efforts to promote "missing middle" housing — smaller options like fourplexes and mother-in-law apartments.
Zoom out: Even more apartment construction was expected outside Salt Lake.
- The next five years are expected to bring 8% growth compared with the past five years in the Ogden-Clearfield metro, with 10.1% growth in Provo-Orem.
The big picture: Salt Lake's apartment construction is expected to exceed national norms, with new builds projected to fall 3.7% in the next five years.
- Nationally, some areas that led the upturn, including Houston and Minneapolis, are expected to see the biggest drops in completions between 2024 and 2028 compared with the previous five years.
- But growth is projected to double and even triple in some smaller cities, like Fayetteville, North Carolina, and Wichita, Kansas.