Utahns looking for a “starter home” are less likely to find it in a single-family detached house — because there are three times as many condo units and town homes in the state now than there were a decade ago.
In 2022, according to a database maintained by the Kem C. Gardner Policy Institute, there were four times as many building permits issued for condos and town homes in a year than there were in 2013. That increase, said Ross Ford, an executive officer of the Utah Homebuilders Association, is more of a symptom than a trend.
There’s always been somewhat of a market for town homes in Utah, Ford said, but the increase in construction is “out of desperation” to get people to buy homes.
“It’s just what people can get into,” he said.
Multiple sources — from real estate agents to builders to banks — indicate town homes are cheaper to buy and build.
SoFi, a California-based bank with offices in Cottonwood Heights and Sandy, puts the cost of building a town home between $111 and $125 per square foot. That’s compared to about $150 per square foot for single-family detached homes.
Nearly every listing on Zillow.com in Salt Lake City for less than $450,000 built within the last few years is a town home or condo.
The “vast majority” of people are buying town homes and condos because that’s what they have to do to get a starter home, Ford said.
That’s a symptom of a multi-year trend in homebuilding, he said.
For 15 or 20 years, Ford said, builders weren’t constructing true starter homes, because low interest rates meant people could afford bigger homes — and that drove demand.
There’s now a “whole generation gap” in starter homes, Ford said, and town homes are filling that.
Counties across Utah issued 2,066 permits for condos and townhomes in 2022, for a total of 6,757 units, according to the Gardner Institute’s database. That database does not include information on Daggett County building permits, and county officials did not respond to calls from The Tribune.
Those statewide numbers were up from 502 permits and 2,279 units in 2013 — a 311% increase in permits and a 197% increase in units.
In that same time frame, there was a 37.5% increase in overall housing permits issued and an 18% decrease in the number of permitted units. There was also a 20.6% increase in permits for single-family detached homes.
Town homes and condos also went from 15% of permitted units to 55% statewide.
Overall residential permits across Utah decreased about 0.3% between 2018 and 2022, and permits for single-family detached homes decreased 6.9%. In contrast, town home and condo permits increased 54.1% between 2018 and 2022.
Not everywhere in Utah is embracing town homes. Duchesne, Emery, Garfield, Millard, Piute, San Juan and Wayne counties had no building permits issued for town homes and condos between 2013 and early 2023.
In counties where there have been permits issued for town homes and condos, the number has varied from four units in Carbon County between 2013 and 2023 to 1,162 units in Salt Lake County in just the beginning of 2023.
Town homes and condos also vary across counties as a portion of the overall permitted units.
Those types of units made up 1.2% of all housing units issued permits in Carbon County between 2013 and early 2023 and a little more than half of the permitted units in Rich County in that same time.
In 2022, 75% of the units issued permits in Rich County were town homes or condos.
Ford doesn’t see town home construction as a sustained trend, but he said they’re often easier to build.
Attached units, like town homes and condos, fit into different zoning regulations, he said, and come with fewer conditions.
Many cities don’t allow smaller lots or homes for single-family detached construction, Ford said, and those permits often come with strings attached.
There’s a contract on his desk now, he said, that requires vaulted ceilings, certain kinds of appliances and specific tiling in the shower.
Builders are sensitive to the market, Ford said, and are “keenly aware of what the public wants and how to get it to them.”
Lots of people want their own home, he said, but they don’t necessarily want a big house on a large lot with lots of lawn care. He recommended people talk to local policymakers to ensure zoning lines up with what they want to see built.
Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.
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