Prosperity, population growth and housing are the forces shaping a ‘New Utah’
If Utah is to continue to prosper, then state leaders need to take note of how the state is changing. That’s the conclusion reached by a report titled “The New Utah: Keepers of the Flame” from the Kem C. Gardner Policy Institute.
It puts a name to everything the Beehive State has experienced in the last few years.
“Utah has become larger, driven by external growth, more multicultural, older, and at the same time, we've had a leading economy and a serious and rapid increase in housing prices,” said Institute president Natalie Gochnour. “And those six transitions make up what we are calling ‘The New Utah.’”
While the COVID-19 pandemic wasn’t the cause of these changes, it accelerated many of them.
“The ground has shifted, maybe something of what you might call an inflection point,” Gochnour noted. “We indeed face a new economic and demographic environment.”
One of those changes is Utah’s population. The state is now the 30th most populous state in the country, up from 34 after the 2010 census. Utah now has more people than states like Iowa, Nevada and Mississippi.
“That's exactly why there's so much interest in our state by Major League Baseball, National Hockey League, we got a convention headquarters hotel,” added Gochnour. “Delta [Airlines] signed this long-term lease with our beautiful city and new airport. These are signs of a mid-sized state.”
While a growing population can be good news, where that population came from has given some observers pause.
The majority of the state’s growth in recent years has come from in-migration from other states. Utah’s traditionally high birth rate has declined since the Great Recession in 2008 and has not caught up with the number of people coming to the state in pursuit of jobs or other factors.
“I never expected to see our growth be so driven by in-migration,” said Jennifer Robinson, the institute’s chief of staff. “I think most of us who grew up here and we grew up in big families or neighborhoods with large families didn't expect to see the fertility rate decline as rapidly and below replacement level as it has. And then the last two years, to see a complete reversal in how we've grown mostly from growing from within to growing from net migration.”
That growth has also led to a more diverse Utah. The percentage of Utahns who identify as a racial or ethnic minority has risen from 9.5% in 1990 to 23.3% in 2022. That makes Utah the 34th most diverse state in the country — on par with Pennsylvania and ahead of states like Minnesota and Wisconsin.
“We anticipate that in the next few decades, one in three Utahns will identify as a racial and ethnic minority,” said Robinson.
The ongoing success of the state’s economy and the subsequent boom in population have led to unprecedented pressure on the housing market. The report states Utah is now the seventh most expensive state in the country for housing in terms of median home price — even higher than states like New York and Florida, but not quite as pricey as Hawaii and California.
“From a long-term standpoint, [housing is] one of our greatest economic risks, if not the greatest economic risk to the state, because it makes it harder for employers to be able to attract people here in the state, makes it harder for us to be able to keep our existing workforce, our kids and our grandkids,” said Chief Economist Phil Dean.
According to Zillow, the average Utah home is now worth $510,173. An increase of 46% since January 2020. The rental market isn’t much better. According to a 2022 Kem C. Gardner report, rents in the state’s four largest counties have risen more in the last three years than in the previous two decades.
The jump in prices has been great for people already in the housing market, but for those looking to buy for the first time, many feel left out.
“There is this tension between incumbent homeowners who do nothing but benefit from high home prices in terms of their own finances and in the younger generations that are kind of left on the outside,” said Dean.
When it comes to solutions, the report offers some guidance for Utah policymakers as they approach the 2024 legislative session. It recommends a policy-making approach that “features an open mind, listens more, invests even more, reinforces great institutions and glorifies and unifies.”
But that’s often easier said than done.
“It's easy to view [these factors] in isolation when in reality they're deeply interconnected and drive each other,” said Dean. “That elite economy fueled by workers coming into the state because there are a lot of strong job openings in the state has accelerated the high housing prices that we're dealing with.”
And Utah will continue to change. The next official population figures will be released in November, which will provide more insight into factors like in-migration and the demographic makeup of the state.