Scarce starter homes in Utah prompted a goal to increase construction

In the heart of Utah, developer Jed Nilson is making waves in the housing market. Nilson, who heads Nilson Homes, founded by his father in 1977, is on a mission to create affordable starter homes, a goal that resonates particularly with single-income families.

Jed Nilson's journey began as a real estate agent while he was still in college, selling homes to fellow students. Today, he is working on a project to provide affordable housing, a response to the growing demand for homes in Utah, a state that boasts one of the priciest housing markets in the U.S. with median home prices over half a million dollars.

The median age of first-time U.S. homebuyers is now 38, a record high, and Nilson finds it troubling that even college-educated couples with careers can't afford homes. He saw an opportunity when the governor announced the starter-home target, and he was initially sceptical but decided to seize the moment.

In 2023, Utah legislation aimed at changing settlement rules to enable smaller, affordable housing was enacted. With the state's help, Nilson added more houses to a Plain City development and put them on smaller plots. This year, he expanded the program to include starter condos.

So far, only about 5,100 starter homes have been built or begun, but Nilson has 260 more in the pipeline. He hopes his experience will spur more developers to create affordable homes. Priority for Nilson's Plain City homes is given to first-time buyers, teachers, first responders, and active military service members.

Housing experts suggest changing zoning laws to allow smaller lot sizes to create smaller, affordable homes. Utah lawmakers approved low-interest construction loans for starter homes last year, further aiding Nilson's cause.

Nilson's three-bedroom model is sold for just under $400,000, and a smaller two-bedroom for about $370,000. While these prices might still seem high to some, they represent a significant reduction compared to the median home prices in Utah.

More people are moving to the state, increasing demand for housing. Family sizes in Utah are larger than the national average, contributing to growing demand for housing. Despite the challenges, Nilson remains committed to his mission of creating a home that's affordable on a single income. His work is a testament to the power of innovation and determination in addressing the pressing issue of affordable housing.