Early this month, Utah legislative declared a joint endeavor to address Utah's housing shortage which is among the worst in the nation (Roth, KSTU). A study conducted by Porch Group, a Washington-based software company released a report, ranking “Utah last in the country for the number of homes available for purchase or rental” (Roth). Utah's Speaker of the House of Representatives, Brad Wilson (R-UT) told KSTU’s Max Roth that "[y]ou've got not only the fastest-growing state in the country we've had some of the most aggressive and dramatic increases in housing costs in the country in the last decade, declared Wilson (Roth).
According to the U.S. Census Bureau, Utah ranked fourth for population growth in the one-year period that ended in July 2020 (U.S. Census Bureau). The last decade consisted of a 17.6% growth rate for Utah, which surpassed everywhere else in the United States — except Washington, D.C., which recorded an 18.5% increase in population (U.S. Census Bureau). To understand what drives people to Utah, it is essential to examine historical data concerning technology businesses in Utah and their key role in expediting population rates and how the industry impacts housing prices.
In the early 2000s, the 14th Governor of Utah, Michael Leavitt (1993-2003) made frequents visits to Silicon Valley, and used his slogan, “We [Utah] have workers, we have space, we have proximity,” to increase his influence in the region (Lee, The New York Times). In Leavitt’s monthly visits to Silicon Valley, he highlighted the challenges facing the Silicon Valley region, from the “natural geographic boundaries to traffic congestion,'' said Leavitt (Lee). With Utah’s abundant landscape and economic potential, he used his slogan to attract tech investors to Utah. By the end of Leavitt's term, he organized the framework for his successors to build on his achievements and was able to successfully entice eBay to locate "their main customer service center in Utah," and bring in new research to the state (Lee).
Utah's economic and technological stability is reflected in its history as a hub for industrial software companies like Adobe Systems, Domo, eBay, and Qualtrics. With a multitude of technology businesses starting or adding hubs to Utah, it is essential to explore how these companies are affecting housing affordability for Utah residents.
The dilemma of housing affordability illustrates how “the complex way in which population and housing are interrelated” asserts Professor Clara H. Mulder, a scholar in demography and space at the University of Groningen. (Mulder, 409). A group of researchers at the School of Construction Management and Real Estate at Chongqing University illustrate how population and housing prices are related (Yingchao, Lin, et al, 4).
The box chart above illustrates the impact of population migration on housing prices. Population growth equates to a higher demand for housing prices (Yingchao, Lin, et al, 4). The graph does not equate to any specific region, rather it captures a picture of what a universal graph means for this scenario. Researchers, Lin Yingchao and Ma Zhili reveal how population growth directly causes a change in real estate prices by the distribution of urban residents, which ultimately has a significant impact, “on housing prices, such as the proportion of the working-age population” (Yingchao, Lin, et al, 4)
To put Lin Yingchao and Ma Zhili work in conjunction with Utah, the U.S. Federal Housing Finance Agency, confirms that housing prices in Utah have doubled since Quarter 2: April 1- June 30 of 2011, where prices sat at $298.93K, compared to Quarter 4: Oct. 1- Dec. 31 of 2020 where housing prices were $562.73K a $263.8K difference (U.S. Federal Housing Finance Agency). This information can be observed on the interactive infographic below, by the U.S. Federal Housing Finance Agency. The graph below captures data from the U.S. Federal Housing Finance Agency, where house prices were recorded from Jan. 1, 1975, to Nov. 1, 2020, in order to provide a full picture of the economic data. The green arrows highlight the gain in housing prices measured from 2011 to 2020.
To put the box chart constructed by researchers at Chongqing University and the interactive infographic compiled by The U.S. Federal Housing Finance Agency, in conversation with one another, it is important to recognize that “the expansion of the urban land construction area will increase housing supply, thus affecting housing prices” (Yingchao, Lin, et al, 5).
Over the last ten years, major technology companies have begun in Utah or added hubs to the state (Silicon Slopes, Wikipedia). Qualtrics International Inc., Domo, Inc., and Adobe Inc. are three major companies that have hired tens of thousands of employees (Silicon Slopes, Wikipedia). Job hiring site, Zippia reported that the cloud software company, Domo has over 2,638 employees at their American Fork hub, with annual revenue of $25.1M (Zippia, Domo). In the region of American Fork, Utah, Evan Curtis, a columnist for The Utah Chapter of the American Planning Association, wrote in a Feb. 16, 2021 article, “through the road...valley housing prices soar with rising population,” as Curtis analyzes how his community is seeing a dramatic increase on house prices as new technological developments are being put in place (Curtis, The Utah Chapter).
By contextualizing Utah's economic and technological growth through the lens of Utah’s 14th Governor, the U.S. Federal Housing Finance Agency, and researchers like Mulder, Yingchao, and Zhili, their works shed light on the relationship between businesses, and its effect on population growth, which in turn lures in a larger volume of people. As technology companies add hubs to Utah, it carries out a ripple effect, which permits outside businesses to join Utah (Silicon Slopes, Wikipedia). One of the downsides of a rising technology environment is that it brings in more residents, thus prices soar for commodities such as houses. Over time, these figures of population vs. housing prices will significantly grow, as more technology-related businesses are introduced.
Works Cited
“All-Transactions House Price Index for Utah.” FRED - U.S. Federal Housing Finance Agency, 23 Feb. 2021, fred.stlouisfed.org/series/UTSTHPI.
Curtis, Evan. Through the Roof: Valley Housing Prices Soar with Rising Population, The Utah Chapter of the American Planning Association, 16 Feb. 2021, apautah.org/planninginthenews/through-the-roof-valley-housing-prices-soar-with-rising-population/.
“Domo Careers & Jobs.” Zippia, 31 Dec. 2020, www.zippia.com/domo-careers-21645/.
Mulder, Clara H. “Population and Housing: A Two-Sided Relationship.” Demographic Research, vol. 15, 2006, pp. 401–412. JSTOR, www.jstor.org/stable/26347917.
Lee, Jennifer. “There's Silicon in Them Thar Hills, or Will Be Soon.” The New York Times, The New York Times, 13 June 2001, www.nytimes.com/2001/06/13/business/way-out-west-there-s-silicon-in-them-thar-hills-or-will-be-soon.html?pagewanted=1.
Roth, Max. “Utah Has Nation's Worst Housing Shortage, New Programs Announced to Help.” KSTU, KSTU, 4 Mar. 2021, www.fox13now.com/news/local-news/utah-has-nations-worst-housing-shortage-new-programs-announced-to-help.
“Utah.” Forbes, Forbes Magazine, www.forbes.com/places/ut/?sh=13245f7353e2.
“U.S. Census Bureau QuickFacts: Utah.” Census Bureau QuickFacts, www.census.gov/quickfacts/UT.
Wikipedia. “Silicon Slopes.” Wikipedia, Wikimedia Foundation, 28 Feb. 2021, en.wikipedia.org/wiki/Silicon_Slopes.
Yingchao, Lin, et al. “The Impact of Population Migration on Urban Housing Prices: Evidence from China’s Major Cities.” Sustainability, 5 Sept. 2018, pp. 1–14.
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