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What Utah could teach us about affordability, growth and density

By Ross Elliott - posted Friday, 4 November 2016


Utah may not spring to mind as a region Australian developers and planners should study in more detail but I came away from speaking at an American Planning Association conference there last month wondering why it doesn't feature more prominently in our thinking. It is more comparable and relevant to Australian conditions than say Vancouver or Portland plus its economic and housing market fundamentals present the sorts of metrics we aspire to.

Utah is one of the fastest growing economies in the USA today. A recent article by Forbes described it as the fourth fastest growing region in the country at 6.93%. And it is tech and financial services driving that growth, with companies like Goldman Sachs transplanting 2000 employees to the state and countless other tech firms doing the same. It is a strong economy and it's attracting knowledge based industries at a rate that cities in in Australia would be jealous of.

Its population growth is broadly double the average for the USA and parts of the region are growing at close to 6% per annum. A big attractant is the state's low unemployment and very affordable cost of living. Housing costs are said to be one tenth that of New York and a fraction of what cities like Seattle, San Francisco, Portland, or Los Angeles are commanding.

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Centred around the capital Salt Lake City are numerous regions and city authorities. Much like the our metro regions, there are multiple jurisdictions each with their own planning controls and development plans. Salt Lake City itself is home to only around 200,000 people while the wider Salt Lake metro region is home to around 1.2 million people. This in turn is part of a largely contiguous area that stretches some 200 kilometres from end to end, which is home to around 2.5 million people.

These numbers are reminiscent of south east Queensland, and like south east Queensland the corridor of growth is largely contained by water (plus a desert in Utah's case) on one side, and mountains on the other. It's an elongated urban growth corridor for this reason.

Given then its high growth, strong economy and low unemployment characteristics, combined with broadly similar population numbers, how is it that the region has maintained such affordable housing? The median house price across the Salt Lake County region is a multiple of only around 4.2 times median household incomes. Sydney's housing is a multiple of 12 times median household incomes, Melbourne 9 and Brisbane is 6 times median incomes.

The typical response of some commentators in Australia is to dismiss US cities with excellent affordability as "places where no one wants to live" but Utah and the Salt Lake region is growing fast – faster than any Australian urban economy. So that excuse doesn't cut it.

Talking to some of the Utah planners it became clear that when they speak of increasing urban density, they're having an entirely different conversation to us in Australia. There are no urban growth boundaries as such in Utah or the Salt Lake-Provo-Ogden-Wasatch area. They are promoting higher densities of residential development but this is largely a voluntary thing negotiated between developer and city planners. Some of those cities in the region have minimum subdivision sizes of three acres. Yes, three acres. Others promote higher densities but there is a strong cultural connection to the single family (detached) house on a large(ish) block of land. It sounds much like we were once - although the quarter acre block largely disappeared in Australia in the 1970s. A quarter acre would be considered small by many in Utah.

Land is plentiful - for now - and planning restrictions nowhere near as objectionable as they have become in Australia. Land is taxed differently and leniently. Growth is a good thing, not an evil that must be contained and brought to submission under the regulator's rule book. The one thing that left many of the people I spoke to in Utah speechless was the idea that in Australia, the land can be worth more than the cost of building the house. When I pointed out the average lot size was getting down to around 400 to 500 square metres, the jaws dropped further.

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However, there are some pioneers of housing density in Utah that are setting high quality benchmarks and winning the homebuyers over in large numbers. The master planned community of Daybreak (first developed as an initiative of our own Rio Tinto) at South Jordan (roughly 20 minutes' drive south of Salt Lake City) is one such project. Covering 4000 acres (1600 hectares) it will provide 20,000 dwellings for 50,000 people and extensive retail and commercial space once complete. Connected to the region's rail ('Trax') network and serviced by extensive highway connections (got to love the Americans for this) the masterplanned community puts impeccable eco-credentials to work and has been widely and professionally recognized for its innovation and leadership.

Designed along new urbanist lines by the renowned Peter Calthorpe (among others) Daybreak exudes a charm that is understandably attractive to young families and seniors alike. Over a quarter of the site is devoted to open space but this is woven throughout the neighborhoods in wide foot paths, pedestrian connections, shared common area lawns and other natural features, some which serve to help retain 100% of storm water on site.

House and land combinations here are priced from around $400k to $500k (Australian), which is higher than the regional median for Utah. Typical lot sizes for entry level three bedroom homes are around 460 square metres, up to around 550 square metres for larger homes. Attached town homes or town houses obviously are on smaller lots still (an attached 'twin home' might be on less than 350m2). So Daybreak is proving that smaller lot sizes and higher median prices are achievable, even in a region known for its love of large housing lots and its antipathy forwards multi-family housing (even townhouses are viewed with suspicion: our approach to high density would be viewed with horror).

Daybreak are meeting a community demand for quality neighbourhood environments and open space that is delivered in a relatively high density format for detached living. They are not being told to do this by regulators nor are they being forced to comply with some arbitrary minimum number of lots to the acre. In fact, I'm told Daybreak's 'new urbanist' design principles met with significant regulatory opposition in the early days and there are still doubters in public policy circles.

The point is that the light regulatory touch in Utah has not prevented innovation or world leading design in urban development. While parts of the region pursue more traditional growth patterns, others (especially in and around downtown Salt Lake City) are pursuing higher density options while others still like Daybreak are successfully pursuing high quality community building around small lots which run counter to convention. The market is free to work, and consumers are free to choose. Prices are competitive and supply is not artificially restrained. Affordability is excellent by Australian standards and the economy powering ahead at rates of growth that leave many Australian urban regions for dead.

Utah has a lot to offer as an example of a less regulated land market with a strong and modern economy, substantial population growth and affordable housing. Australian urban planners would do well to expand their horizons and have a look for themselves at what can be achieved with minimal intervention.

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For a gallery of some images of Daybreak with captions, please click here.

If you are interested, I can also put you in touch with the lovely people from the American Planning Association, Utah Chapter. The people at Daybreak have also told me they are happy to show Australians around their project. Let me know and I will put you in touch with their External Relations person.

The Daybreak development's web page is here.

There is a ULI case study (slightly dated but still good) on Daybreak here.

There are countless stories on the strong economy and growth story of Utah. You can find them all here.

This article was first published on The Pulse.



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About the Author

Ross Elliott is an industry consultant and business advisor, currently working with property economists Macroplan and engineers Calibre, among others.

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