In his new budget, Cox pitches that 35,000 starter homes be built in Utah by 2028

Gov. Spencer Cox’s proposed $29.5 billion budget for the next fiscal year contains many of the usual suspects. Funding for transportation? Employee compensation? Public education? Check, check and check. But this year, Cox’s proposal also contains $150 million dedicated to getting more Utahns into their first homes.

“It became very clear to me that the single greatest threat to the future prosperity of our state is the price of a home,” Cox told a crowd gathered on Dec. 5 in a new housing development in West Haven. “It's the inability, the unaffordability of homes in our state.”

Called an “audacious” proposal by Cox himself, the “Utah First Homes” program would jumpstart new home construction across the state, with the hope of leading to 35,000 new starter homes by 2028.

According to the online real estate brokerage Redfin, the median sale price of a home in Utah has risen from $348,400 in October 2019 to $553,700 four years later. That rapid increase and the number of Utahns who now feel homeownership is out of reach has given the governor pause.

“Our kids will never be able to call Utah home if we don't start building starter homes again,” he said. “I want you to imagine a world where an entire generation of people never have the opportunity to own a home. What does this state look like 50 years from now when a generation of Utahns never get that opportunity?”

The new program will aim to “correct a market failure in the housing space” where various incentives have led to smaller single-family dwellings being overlooked by developers in favor of larger homes and apartment complexes.

“We think if we get the government regulation piece of this right, we'll start to see many, many more single-family detached starter homes,” said Cox.

Diving deeper into the $150 million request, it contains $50 million to continue Utah’s first-time homebuyer assistance program which helps buyers come up with the money for a down payment on a newly constructed home priced under $450,000. Although critics have said current stipulations make the program too narrow for most potential buyers, Cox said the details of the program are unlikely to change.

It is his hope, however, that prices could drop in that sector of the market as more supply comes online.

Of the remainder, $75 million is requested to expand infrastructure like water and electricity to areas where starter homes could be built, as well as $25 million toward construction and housing innovation.

Cox also took the opportunity to announce a new position in his senior leadership team. Former state Rep. Steve Waldrip will join the governor’s cabinet as Senior Advisor for Housing Strategy and Innovation. Waldrip served in the Utah House of Representatives from 2019-2023 and has a professional background in real estate development.

“I'm a policy nerd,” Waldrip said. “This is fun for me to take disparate pieces of policies and try to create something that works better. And I think our state is uniquely positioned to do something better [with housing].”

While he just started the job, Waldrip said his initial conversations with lawmakers have been encouraging as he works to make Cox’s vision a reality.

“We all understand that we have an issue that we have to deal with and resolve,” he said. “This is a here-and-now problem … If we go downstream 30 or 40 years and you have an entire generation or two without the ability to create equity and generational wealth, our state and our nation are going to be in big trouble.”

Other budget highlights

While housing headlines Cox’s proposed budget, there is money proposed for other initiatives, too.

Cox announced the day before that he wants $193 million to go toward a comprehensive statewide homelessness support system, complete with mental health services, deeply affordable housing and emergency shelters.

There’s also $122 million for new transportation and air quality investments, which includes money for an air quality bill passed in the 2023 session that aims to better understand the causes of the state’s winter inversions.

According to Cox, his budget would also double the ongoing funding for statewide transit projects. Unlike his previous budget, he did not include another proposal for free statewide public transportation for a year. Instead, there could be more opportunities for substantial transit investments in the future with the Olympics poised to return to the state in 2034.

The governor said he wants to sit down “with the legislature, with local authorities, with [the Utah Transit Authority] and others, and say, what do we want Utah to look like in 10 years?”

Another line item is $854.6 million for public education, including funding for non-traditional education opportunities for Utahns who, for various reasons, have yet to finish their studies or are entering higher education later in life.

People like Lt. Gov. Deidre Henderson, who recently graduated from Brigham Young University after leaving the school to raise a family in her 20s.

“Learning doesn't stop at a high school graduation,” said Henderson. “As a lifelong learner myself and someone who graduated from college last year, I'm grateful for the classroom certification and returnship opportunities open to nontraditional students, working parents and adults reentering the workforce.”

How do we pay for it all?

The proposed budget still needs the approval of state lawmakers. Those negotiations will take place early next year as the Legislature convenes for the 2024 general session.

Economic forecasts point to a slowdown in the rapid growth seen since the start of the COVID-19 pandemic, but revenue estimates still show Utah on a solid economic path forward.

“Our expectation is that in the absence of these powerful external forces that have pushed collections growth to these historic highs, we'll see a return to a more closely aligned approximation of the average,” the state’s senior economist, Travis Eisenbacher, told the Legislature’s Executive Appropriations Committee on Dec. 5.

According to the Governor’s Office of Planning and Budget, future revenue estimates strongly influence the governor’s budget proposal.

“We know there will be robust debate about which ideas will work and other ideas that will come forward,” said Cox. “We look forward to having that debate and finding the best path forward for Utahns.”