SLC builders to add 7,300 rental units by 2028, nearly keeping pace with demand

Developers will add about 7,300 new rental units to the Salt Lake City market by 2028, nearly keeping pace with the projected demand of roughly 7,500 new renter households, according to a report commissioned by the Rental Housing Association of Utah.

With demand modestly outpacing supply, the vacancy rate is expected to decline from its current level of 6.9 percent. By year-end 2028, the local market is projected to move toward stabilization, characterized by a lower vacancy rate of approximately 6 percent. That means owners will need to make fewer and less-generous concessions to attract tenants. It also means they will be able to modestly increase rental rates.

“Salt Lake City is building a significant amount of housing, but the data show we’re still just barely keeping pace with demand,” said Paul Smith, executive director of the Rental Housing Association of Utah. “The good news is that continued construction should help prevent the severe shortages and rapid rent spikes we saw earlier in the decade.”

Salt Lake City has experienced an unprecedented wave of apartment construction in recent years. Statewide, Utah permitted more than 32,000 apartment units between 2019 and 2021, driven by rapid population growth, rising home prices and historically tight rental vacancies.

Salt Lake City was at the center of that boom, capturing roughly one-quarter of all new apartment construction statewide. After a slowdown between 2022 and 2024, permitting activity rebounded in 2025, signaling that developers continue to see strong long-term demand for rental housing in the city, according to the association.

Renter households in Salt Lake City have been growing at an estimated annual rate of 3.85 percent when long- and short-term trends are combined. By 2025, the city had approximately 64,500 rental units, with about 60,000 occupied. At that pace, the city needs roughly 2,500 new apartments each year just to keep up, helping explain why vacancy rates have remained relatively low despite heavy construction.

Rents at newly built properties remain elevated. Studios average around $1,500 per month, one-bedroom units near $2,000 and two-bedroom units exceed $2,800. However, the influx of new supply has led to unusually generous concessions, with eight to 12 weeks of free rent now common, often paired with gift cards or cash incentives. These concessions effectively reduce rents by 10 to 15 percent, a level of discounting rarely seen in Salt Lake City, particularly at income-restricted properties, the report said.

The development pipeline remains sizable. More than 2,600 market-rate units are currently under construction, largely downtown and in nearby neighborhoods, with another 5,700 market-rate units proposed. While not all proposed projects will be built by 2028, additional supply is expected. The affordable housing pipeline is also expanding, with about 1,700 low-income housing tax credit units under construction and another 1,600 approved.

The Rental Housing Association of Utah is a nonprofit trade association designed to protect, educate, connect and grow the rental industry in the state of Utah. It represents roughly 3,500 rental operators and more than 160,000 units.