Imagine if you went to a grocery store where the price of the bread on the shelf was subject to a bidding war. There’s one loaf on the shelf, and there are ten other interested shoppers. It’s wheat bread with nuts sprinkled on top — not exactly everyone’s top choice — but the pantry is empty, and the kids are hungry.
“Four dollars!” a lady from the middle of the group shouts. “Five!” a young man counters. Bids of six, seven, and eight quickly follow. The bid hits ten dollars before things slow down. A man from California breaks the silence.
“Fifteen dollars for the bread,” he states. Obviously having won the bidding war, he pushes his cart to the shelf, places the loaf on top of his eggs, and wheels away.
The other shoppers are frustrated. A loaf of bread is not worth fifteen dollars, they insist. Searching for solutions, some of the shoppers propose, “Force the store to sell bread for two dollars,” “Close the doors to Californians,” and “Double everyone’s income so we can afford bread.”
None of these proposals would solve the underlying problem, which is that the grocery store has a bread shortage. In this example, the overpriced bread problem isn’t solved by declaring a bread crisis and debating about growth. The solution is obvious — the store should bake more bread.
While the metaphor isn’t perfect for Utah’s housing crisis, it works to demonstrate how our real estate market is currently functioning. Due to insufficient levels of construction for over a decade (which as of 2023 stands at a 31,000 home deficit), the same house worth $250,000 in 2015 now sells for $500,000 or more.
This level of housing price inflation means that police officers, teachers, and other professionals making less than about $80,000 cannot qualify for a home loan.
Alarmingly, the shortage of homes that those with middle-class incomes can afford isn’t because no one is willing or able to build them. It’s because local zoning regulations often make products like starter homes on small lots and duplexes illegal to build. The mandates to only build larger homes on large lots has the same effect of placing too few loaves of bread on the shelf for sale.
In short, the solution to shortages is removing barriers to supply. After all, without widespread abundance of life’s necessities, economic security for self and society is not possible.