Utah's Housing Landscape: What Lawmakers Did (and Didn't) Do in 2025

Have you been keeping up with Utah's ongoing battle against the housing crisis? If you're like most Utahns, you've probably felt the squeeze of rising home prices and limited options firsthand. The good news? State lawmakers have been busy this legislative session, passing a package of bills aimed at tackling our housing challenges. The not-so-good news? Some potentially impactful legislation didn't make the cut.

Let's break down what actually happened, what it means for you, and where Utah's housing market might be heading next.

The Big Picture: "A Hodgepodge of Different Tweaks"

"In totality, I think we'll make some good progress," said Senator Lincoln Fillmore (R-South Jordan), who co-chairs the Commission on Housing Affordability and sponsored much of this year's housing legislation.

Fillmore hit the nail on the head when he identified the core problem: "There is demand for housing at the first rung of the economic ladder, and the government is constraining supply there." His solution? "Lessen government interference in that market so that demand can increase to reach supply."

While Republicans led the charge on the bills that passed, Democrats expressed cautious optimism. Senate Minority Leader Luz Escamilla (D-Salt Lake City) noted they're "just happy to see any type of movement," though they'd prefer more aggressive action.

Why This Matters: Utah's Housing Crisis By The Numbers

Before diving into the specific legislation, let's take a quick look at why this matters so much.

Utah's housing costs have skyrocketed in recent years, with median home prices climbing by approximately 89% from 2015 to 2023, according to data from the Utah Association of Realtors. The state faces an estimated shortage of over 44,000 housing units, creating a supply gap that continues to drive up both purchase prices and rents.

The average Utah household now spends nearly 31% of their income on housing, crossing the threshold of what's considered "affordable" by federal standards. For first-time homebuyers, the situation is particularly brutal, with the typical starter home now out of reach for many working families.

The Incremental Approach: One Barrier at a Time

Housing policy expert Laurie Goodman from the Urban Institute's housing finance policy center makes an interesting point about Utah's legislative approach. She likens it to California's success with accessory dwelling units (ADUs), where a series of bills over several years led to massive increases in production—from about 1,000 permitted in 2016 to more than 28,000 in 2023.

"The reason housing costs are so high is because we don't have supply," Goodman explained. "But there's no single reason for the lack of supply."

Her perspective? "Every little thing helps incrementally" and "You just sort of have to attack things one by one by one."

So what exactly did Utah lawmakers tackle this year? Let's dive in.

What Passed: Bills That Made It Through

1. Trading Density for Affordability and Ownership (HB37)

Perhaps the most significant housing win was House Bill 37, which gives local governments a powerful new tool. Cities and counties can now allow developers to build more densely in exchange for commitments to affordability and owner occupancy.

Specifically, the bill lets local authorities permit higher density in single-family neighborhoods if developers meet requirements like:

• Deed restrictions requiring owner occupancy for at least five years on 60% or more of the units
• Making at least 25% of units affordable to households earning no more than 120% of the county's median income
• Keeping 25% or more of units below 1,600 square feet
• Giving preference to owner-occupants during the first 30 days a unit is initially for sale

The same concept applies to multi-family developments, potentially creating more affordable housing options across different property types.

For potential buyers, this could eventually translate to more entry-level homes at somewhat more accessible price points. For communities, it provides a path to increasing density without completely abandoning owner-occupied neighborhoods.

2. Reining in Short-Term Rentals (HB256)

We've all seen neighborhoods where it seems like every other house is an Airbnb. House Bill 256 gives cities and counties more teeth to enforce their short-term rental regulations.

Research from 2024 found that short-term rentals of entire homes are taking a significant bite out of Utah's available housing supply, especially in tourist destinations like Park City and Moab. This bill allows local officials to use online listings as evidence of rule violations, making enforcement far more practical.

For residents in tourist-heavy areas, this could gradually shift some properties back to the long-term rental market or owner-occupancy. For visitors, it might mean fewer options but more authentic neighborhood experiences.

3. Expanding the Utah Homes Investment Program (HB360)

This creative approach allows Utah's largest cities (those with at least 65,000 residents) to create revolving loan funds for buying, rehabilitating, and selling single-family homes. Cities can access up to $10 million through loan agreements with financial institutions or the Utah Housing Corporation.

The program includes a key requirement: homes sold through the program must remain owner-occupied for at least five years, helping to stabilize neighborhoods.

Based on 2023 population estimates, this would apply to approximately 15 cities, primarily along the Wasatch Front, with St. George being the notable exception elsewhere in the state. Salt Lake City and Ogden already have similar programs that they'll now be able to expand.

Steve Waldrip, the governor's senior adviser for housing strategy, called this a "low-cost way for the state to help cities improve their communities." For first-time buyers in these larger cities, this could create opportunities to purchase rehabilitated homes in established neighborhoods.

4. Cutting the Red Tape (HB368)

At a massive 7,611 lines, House Bill 368 represents a year's worth of work to streamline government regulations without compromising health and safety standards. Sponsored by Representative Stephen Whyte (R-Mapleton), who co-chairs the Commission on Housing Affordability with Senator Fillmore, the bill clarifies existing land use law and codifies best practices.

While it doesn't create new policies, it addresses bureaucratic inconsistencies that have created headaches for developers and homeowners alike. For example, it resolves conflicting definitions of terms like "identical plans" that had caused confusion.

Cameron Diehl, executive director of the Utah League of Cities and Towns, described it perfectly as "meat and potatoes – substantive and good for you but not very glamorous."

For those navigating Utah's building and development processes, these changes should reduce delays and frustrations—potentially speeding up housing production across the state.

5. Rethinking Parking Requirements (SB181)

Senate Bill 181 prevents certain cities and counties from requiring garages with affordably priced, single-family homes. It also defines standard parking space dimensions, preventing local governments from requiring oversized spaces.

Why does this matter? Construction material costs have skyrocketed in recent years, with some materials seeing price increases of more than 70% between 2020 and 2024, according to the National Association of Home Builders. Garages add significant cost to new homes, and eliminating this requirement for affordable properties could make a meaningful difference in price points.

"It really can be a way to bring the price of a first home down on a small lot," explained Senator Fillmore, who sponsored the bill.

Importantly, the bill applies only to owner-occupied homes priced at or below 80% of the median home price in a given county, and only in Utah's 90 largest cities and nine specific counties. It doesn't prevent local governments from requiring on-site parking—just the enclosed garage itself.

For first-time buyers willing to forego a garage, this could make homeownership more attainable. For builders, it provides more flexibility in designing affordable housing products.

6. Encouraging Condo Development (SB201)

Condo construction has been declining in Utah for years, limiting options for many first-time buyers who traditionally turned to condos as their entry point into homeownership. Senate Bill 201 aims to reverse this trend by addressing one of the major barriers: construction defect litigation.

The bill requires condo owners to provide developers with written notice of design or construction flaws before filing lawsuits, giving developers nine months to complete repairs. This approach seeks to reduce the "chilling effect" that potential litigation has on developers' willingness to build condos.

While expert Laurie Goodman notes this isn't a "silver bullet," it should help around the margins by providing developers with more certainty. For buyers seeking more affordable options, increased condo construction would expand choices significantly.

7. Other Legislative Actions

Several other housing-related bills made it through the legislative session:

• SB262 creates shared appreciation loans—deferred, no-interest loans that help with down payments or closing costs. Homeowners would repay the loan plus a portion of the home's increased value upon sale or refinance.

• HB502 establishes a grant program for local governments in Salt Lake County to build infrastructure supporting affordable housing projects.

• HCR14 calls for consolidating the state's currently fragmented housing affordability efforts, which are spread across multiple departments. This resolution follows recommendations from a November 2023 audit of state housing policy.

• SB23 makes technical fixes to allow local governments to create First Home Investment Zones, areas designated for focused efforts to increase homeownership opportunities.

What Didn't Pass: The Road Not Taken

Despite the progress made, several potentially impactful housing bills didn't make it through the legislative process. Many were sponsored by Democrats and targeted different aspects of the housing crisis.

1. Rental Market Protections

Several bills aimed at helping renters failed to advance:

• A bill requiring 60-day notice for rent increases died in committee
• Legislation making it optional (rather than mandatory) for judges to triple damages in landlord-tenant disputes didn't pass
• A resolution to study price fixing in rental housing and recommend the Utah attorney general join a related lawsuit also died in committee

For Utah's growing renter population—now more than 30% of households—these bills could have provided additional protections during a period of rapidly rising rents.

2. Addressing Investor Ownership

Two bills targeting institutional investors' growing role in the single-family home market failed to gain traction:

• HB149, sponsored by Republican Rep. Tyler Clancy of Provo, would have prohibited institutional investors like hedge funds from purchasing homes, but never received a hearing.

• HB151, sponsored by Rep. Gay Lynn Bennion (D-Cottonwood Heights), would have required home purchasers within the first month of listing to sign a document stating they intended to live in the house. While the bill had significant loopholes, Representative Bennion explained its purpose was primarily to "raise the importance of homeownership to buyers' and sellers' conscience."

The growing presence of institutional investors in Utah's housing market has raised concerns about their impact on affordability and availability. According to Harvard University's Joint Center for Housing Studies, investors have been purchasing an increasing share of single-family homes, often targeting more affordable properties that would otherwise be available to first-time buyers.

3. Expanding Accessory Dwelling Units

HB88, sponsored by Rep. Ray Ward (R-Bountiful), failed to make it through committee. It would have required certain cities to allow accessory dwelling units (ADUs) on lots with detached, single-family homes and modular units in residential zones.

Given the success California has seen with similar policies—mentioned earlier by housing expert Laurie Goodman—this represents a missed opportunity to increase housing supply through gentle density increases in established neighborhoods.

What This Means For You: Buyers, Sellers, and Homeowners

So what do all these legislative changes (and non-changes) mean for real Utahns? Let's break it down.

If You're a Buyer:

The incremental nature of these changes means there won't be immediate relief in the housing market. However, several provisions could help over time:

• The density-for-affordability exchange in HB37 should eventually create more entry-level homes, particularly in cities that embrace the option
• Reduced parking requirements could lead to more affordable new construction
• The potential revival of condo construction would expand options for first-time buyers
• Shared appreciation loans will provide another tool for down payment assistance
• The expanded Utah Homes Investment Program in larger cities could create opportunities to purchase rehabilitated homes

Your best bet? Stay informed about these programs as they roll out, particularly the shared appreciation loans and city-specific rehabilitation initiatives if you live in one of Utah's larger municipalities.

If You're a Seller:

Nothing in this legislative package is likely to dramatically cool Utah's housing market in the near term. Limited supply and continuing population growth mean property values should remain strong through 2025.

However, the push for increased density and more diverse housing types may affect neighborhood dynamics over time. Properties in areas where cities adopt the new density-for-affordability provisions could see changing neighborhood characteristics in coming years.

If You're a Homeowner:

Several provisions could create opportunities:

• The crackdown on illegal short-term rentals might improve neighborhood stability in tourist areas
• Streamlined regulations could make it easier to pursue property improvements or additions
• While the ADU legislation didn't pass this year, the continued focus on housing diversity suggests similar proposals may succeed in future sessions

Looking Ahead: What's Next for Utah Housing?

With the 2025 legislative session behind us, what's on the horizon for Utah's housing landscape?

Implementation Will Be Key

Many of the bills that passed will take months or even years to fully implement and show results. Cities and counties will need to update their land use codes and create new processes to take advantage of tools like the density-for-affordability exchange. The effectiveness of these measures will depend largely on how enthusiastically local governments embrace them.

Steve Waldrip, the governor's senior adviser for housing strategy, will likely play a crucial role in encouraging implementation across the state. Governor Spencer Cox has made housing affordability a priority of his administration, and executive branch leadership will be essential in translating legislative action into real-world results.

Unfinished Business for Future Sessions

Given the bills that didn't pass and the incremental nature of this year's changes, several priorities are likely to emerge for the 2026 legislative session:

1. Rental market protections in a state where renting is increasingly common but protections remain limited
2. ADU expansion to increase housing supply in established neighborhoods
3. Addressing institutional investors in the single-family home market
4. Consolidating state housing efforts, as recommended by the 2023 audit and reinforced by HCR14

Senate Minority Leader Escamilla's comment that Democrats are "just happy to see any type of movement" but would like more suggests continued pressure for more comprehensive approaches.

Conclusion

Utah's 2025 legislative session made incremental progress on housing affordability through what Senator Fillmore aptly called "a hodgepodge of different tweaks to policy." The bills that passed reflect the complex balancing act between addressing urgent needs and respecting property rights, local control, and market forces.

As Laurie Goodman from the Urban Institute noted, these incremental changes can add up over time if pursued consistently—much like California's success with ADU legislation over multiple years. The true measure of this session's success won't be known immediately, but will emerge as these policies reshape Utah's housing landscape in coming years.

What's clear is that both the market and policy environment for housing in Utah continues to evolve. Whether you're buying, selling, or simply concerned about your community's future, staying informed and engaged has never been more important.