One of the Utah Legislature’s most significant efforts to ease a worsening statewide housing shortage got its start Tuesday on Capitol Hill, with four days left in the 2021 session.
SB164 ratchets up requirements on cities to have detailed plans for encouraging the building of more moderately priced homes in their boundaries and would create a new inventory of existing housing units in heavily populated counties, part a system the bill creates for cities to donate land for housing.
Sponsoring Sen. Jake Anderegg, R-Lehi, said SB164 had been the subject of intense talks involving city leaders, homebuilders and others in the real estate sector — and had been stripped of a controversial attempt to limit cities’ use of inclusionary zoning, where they require affordable homes be included in new residential developments.
“There’s no way we’re going to get that done in the next four days,” Anderegg said Tuesday of that provision during the bill’s first airing of the session. The idea will instead be studied at least until lawmakers convene again, he said.
SB164 and two other housing-related measures — one allowing basement apartments in most residential zones statewide and another freeing homebuilders from a range of city construction standards — now race toward passage in advance of Friday’s end of the 45-day session.
After winning unanimous support Tuesday from the Senate Natural Resources, Agriculture and Environment Committee, SB164 cleared the full Senate, 29-0, later in the day amid a rush of bills as the session’s Friday close approaches. It now heads to the House.
The product of a year’s debate by government and private-sector officials on the state’s five-year Commission on Housing Affordability, SB164 also would steer $500,000 in new grants to bolster new affordable homes in rural Utah. Those grants are aimed at helping communities with items like environmental studies, early design or other preliminary costs in building low-income housing units.
Another $300,000 would pay for new tenant-landlord mediation programs, run by the Department of Workforce Services, in an attempt to slow evictions.
The bill also would turn the dial further on a law passed two years ago that required Utah’s larger cities to adopt at least three state-approved strategies to bolster and plan for moderately priced housing. SB164 bumps that to four strategies — five for cities located along transit lines.
Separately, state budget writers on the Legislature’s Executive Appropriations Committee announced an agreement Friday to pump $50 million in new money into housing programs and services for the homeless. Of that, $10 million is to be set aside for gap lending to developers of new affordable apartment projects and $25 million will go to match private dollars spent on preserving and upgrading existing low-income housing units.
Utah’s lack of affordable homes for sale and for rent has loomed large on Capitol Hill this year. Economists estimate the state has a housing gap of at least 53,000 units affordable to residents making the state’s average incomes. Home prices, meanwhile, are escalating at about 12% a year right now, made worse by increased demand due to the pandemic.
Some blame cities for housing crisis
Several debates this session have also highlighted views of Utah’s housing crisis held by several lawmakers who also work as developers, many of whom say cities are part of the problem with dwindling home supplies.
Rep. Mike Schultz, R-Hooper and president of Castle Creek Homes, has spoken passionately about the dire need for new housing and at one point called concerns from cities that some development proposals might overwhelm their sewer and water systems “absolutely false.”
“Anytime we get close to meaningful change that will make a difference,” Schultz said, “cities put games in place.”
Rep. Paul Ray, R-Clearfield and CEO of the Northern Wasatch Home Builders Association, backs a bill that would let builders bypass overdue city inspections and plan reviews and hire their own certifying experts instead, to avoid costly construction delays.
Though time limits for inspections and plan reviews are set by state law, Ray said HB98 was aimed at “10% to 15% of the cities that just don’t care and thumb their nose at it.”
HB98 would also free builders from having to restore homes fully up to city code when they are damaged in natural disasters.
The measure, which passed out of Senate committee late Tuesday, also prohibit cities from regulating a host of design elements on new home construction, including exterior features, placement of doors and windows, lot sizes, roof designs, the number of rooms, minimum building sizes and front yard fencing.
“The homeowner actually has a choice on how they want to build that home,” Ray said during floor debate. Rep. Mike Winder, R-West Valley City, jokingly asked if HB98 would make it his legal right to build “a pink and lime-green polka-dot Quonset hut in a single-family neighborhood.”
“If those are your colors,” Ray retorted, “yes, it would.”
Winder said that while he agreed with the bill’s provisions on bypassing city inspections, “there’s a lot of danger to our property values throughout all our neighborhoods if we’re just allowing the Wild West, removing all ability for cities to regulate those building design elements.”
Others have raised safety concerns about buildings not cleared by city inspectors. While stoutly backed by trade associations for Utah real estate agents and homebuilders, HB98 has drawn a neutral stance from lobbyists for cities.
Salt Lake City Mayor Erin Mendenhall and Councilwoman Ana Valdemoros both testified the bill could interfere with the ability of residents on the city’s west side to protect the look and feel of future historic districts created for neighborhoods such as Rose Park.
The measure drew a divided vote the House late last week, 38-30. It now heads to the Senate floor for debate.
‘One size misfits all’
Earlier in the session, Rep. Ray Ward, R-Bountiful, likened the state’s rapidly advancing home prices to a steadily rising tax on Utah families as incomes have stagnated.
“It is a very heavy burden on our constituents, particularly those who are the working poor and at lower income and lower to middle incomes,” said Ward, who backs HB82 to allow in-home basement apartments, also known as accessory dwelling units, in existing single-family homes occupied by their owners.
That measure, another heavily negotiated housing measure of the 2021 session, also passed favorably out of Senate committee Tuesday after clearing the House two weeks ago, 50-19. It now heads to the Senate floor.
HB82 would bar cities from restricting add-on apartments in owner-occupied single-family homes in all city residential zones, with certain key exceptions. The issue has been framed as a way to promote affordable housing by adding new units in existing neighborhoods and as a protection of homeowners’ property rights to use their homes as they see fit, including to generate new income from rents.
“We desperately need this kind of housing,” said Søren Simonsen, architect, developer and former Salt Lake City Council member, who spoke as a private citizen in favor of taking the bill’s statewide approach to the issue.
HB82 is written to focus on ADUs built inside detached owner-occupied homes, partly in hopes of creating new housing for locals as opposed to a new supply of short-term rentals available on sites such as Airbnb and Vrbo.
Early versions of HB82 faced steadfast opposition from Utah cities, whose lobbyists asserted it invaded city authority over crucial land-use and planning decisions. Creating new policies on ADUs has been a nuanced process in recent years for many Utah cities, where neighbors often oppose those new dwellings for their effects on their area and parking.
HB82, according to Cameron Diehl, executive director of the Utah League of Cities and Towns, ”contemplates a one-size-fits-all approach to zoning, and zoning is traditionally a function of local government.”
“One size misfits all,” said Diehl, who, with others, successfully pressed for changes to HB82 allowing cities to require parking for ADUs and to exempt select neighborhoods, particularly places like Logan, Salt Lake City and Provo with large student populations — as long as those areas don’t exceed 25% of a city’s total residential footprint.
The league, representing 248 Utah cities, says it is now neutral on HB82. Pushing back on repeated assertions this session that cities are an obstacle to affordable housing, Diehl also noted that municipalities had approved 30,000 new housing units last year, a state record, and that 60 cities already allow accessory dwellings in some form.
Rather than resisting new housing, Diehl said, cities are squarely facing the crisis and are part of “an all-hands-on-deck to approach population growth and the challenges of both housing affordability and affordable housing.”
