New Research: Single-Family Homes Close to Apartments in Suburban Salt Lake County Have Had Higher Price Appreciation
Posted By Regional Development
February 22, 2021
The Kem C. Gardner Policy Institute released a study today showing apartments built between 2010 and 2018 have not reduced single-family home values in suburban Salt Lake County.
According to the research, commissioned by Salt Lake County's Office of Regional Development, single-family homes located within 1/2 mile of a newly constructed apartment building experienced higher overall price appreciation than those homes farther away.
“This analysis sheds light on an important topic – the proximity of apartments to single-family homes does not decrease value, but increases value, all while providing more housing choices for residents,” said Dejan Eskic, senior research fellow at the Gardner Institute and lead author of the report. “In Salt Lake County, from the year an apartment was constructed to 2019, single-family homes located within 1/2 mile of new apartment construction realized 1.4% more in annual price appreciation than single-family homes located farther away.”
New, dense housing continues to be a point of conflict in growing communities as concerns over negative impacts to home values dominate the discussion. This study quantifies how new apartment construction has impacted single-family home price acceleration over the last decade.
"This research by the Kem C. Gardner Policy Institute on housing in our community will help leaders make better data-based decisions as we work towards strategic and sustainable growth for all residents," said Salt Lake County Mayor Jenny Wilson. “Salt Lake County will continue to invest in housing affordability solutions, both as a regional convener and funder of housing services.”
"We didn't know what the outcome of this study would be," said Michael Gallegos, director of Housing & Community Development, "but with this research we now know we can eliminate one anecdotal concern and focus efforts on other issues that are real."
Highlights from report include the following:
New Apartments Have Not Reduced Single-Family Home Values
Between 2010 and 2019, homes located within ½ mile of a newly constructed apartment building experienced a 10% average annual increase in median value, while the value of those farther away increased by 8.6%.
Only in the Southeast part of the county did homes more than 1/2 mile away from new apartment construction experience higher average price appreciation than those located ≤1/2 mile.
Homes Near Apartments Have Higher Value per Square Foot
Between 2010 and 2019, homes that are located ≤1/2 mile of new apartments averaged an 8.8% higher median value per square foot compared with those farther away. However, the total median market value of single-family homes averaged 4.7% greater for those that are located more than 1/2 mile away from new apartments.
Homes Near Apartments Are Smaller and Older
In suburban Salt Lake County overall, homes located within 1/2 mile of new apartments are approximately 11.1%, smaller than those farther away. Homes that are located ≤1/2 mile of new apartments are seven years older on average than those located farther away.
The only occurrence where negative price trends followed apartment construction was for homes near apartments built in 2010 and 2011. This resulted from the negative economic impacts brought on by the housing crash of the prior decade.