This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.
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You might have noticed there are fewer homes for sale and that prices for those homes are skyrocketing along the Wasatch Front.
The situation is just as difficult for the one in three Utahns who rent. With 41% of Salt Lake County renters spending more than 30% of their income on rent and utilities, and with Utah lacking an estimated 40,000 affordable rentals and homes for sale, it’s little wonder that the dismal outlook is often referred to as the “housing crisis.”
One Utah nonprofit is trying to change things for the state’s renters.
The Utah Housing Preservation Fund works to stop existing affordable rental units from being sold, remodeled and listed at unaffordable prices.
“It’s been a fantastic, very fulfilling opportunity… to really help those in need,” said Doug Harris, fund manager and Vice President of UHPF.
Since its founding in 2020, UHPF has purchased and preserved 624 units, Harris said. There are 548 units at seven apartment complexes and 23 duplexes listed on UHPF’s website (the others haven’t yet been added online). The organization is also working to secure an additional 60 units, Harris said.
Most are located in the Salt Lake City area, between Fairpark to South Salt Lake and from West Valley City to East Millcreek. One complex is in Tooele.
With an average of two to three people living in each unit, UHPF has likely helped around 2,000 renters keep their apartments, said Lukas Ridd, director of operations and finance for UHPF.
Ridd also said the UHPF wants to expand into rural areas.
“We’ve been really successful, but we want to make sure that the solution that we’re helping provide impacts the whole state,” he said.
How it works
UHPF is nested under the Utah Non-Profit Housing Corporation. Harris said the main difference between the two organizations is UHPF focuses solely on preserving affordable housing that already exists; while the UNPHC can create new affordable housing.
Because the UNPHC is its parent company, the UHPF can apply for tax abatement or exemption for their properties.
Harris said UHPF has raised about $142 million, which comes from three primary sources: the state, Community Reinvestment Act banks and social impact investors.
The first source, the Utah legislature, has provided a “very generous” appropriation of $46 million, Harris said.
The second, Community Reinvestment Act (CRA) banks, have taken advantage of Utah laws that allow banks “very favorable terms” if they house their money in the state and invest in the community.
The CRA was enacted in 1977 and encourages banks to help meet the credit needs of low and moderate-income communities, according to the Office of the Comptroller of the Currency.
To receive CRA credit, a bank must support affordable housing, community services, per information from the Federal Deposit Insurance Corporation.
CRA applies to FDIC-insured depository institutions such as national banks, savings associations and state-chartered commercial and savings banks.
“So we reach out to a lot of those groups to help them fulfill that need. It’s a win-win,” Harris said.
The third source is philanthropic groups such as the Eccles Foundation, the Larry H. Miller Foundation and The Clark and Christine Ivory Foundation. Clark Ivory, CEO of Ivory Companies, made a seed grant to the UNPHC to get the UHPF off the ground, per UHPF’s website (the Ivory Foundation also supports The Tribune’s Innovation Lab).
Between these three funding “pillars,” Harris said, the UHPF can fulfill its mission of buying and preserving affordable housing.
Repairs and rates
Obtaining the rental units isn’t always easy.
Harris said the acquisitions market is “extremely competitive.” For instance, after analyzing 77 potential deals, they put in 25 offers and acquired only 10.
In one case, the UHPF recently considered a West Valley property where the owner told potential investors they could raise rent as much as $600 per unit.
“That makes it extremely difficult when we come into the picture to say, ‘We actually want to purchase your property, but we don’t want to raise [rent],’” Harris said.
Renovation also brings on a bevy of challenges. Because the units UHPF buys are often decades old, they come with problems, such as roof leaks at one place and asphalt issues at another.
Harris said with every acquisition, a member of their team assesses all of the property’s needs so they can bring it up to par.
They have no intention of selling any of their properties, he said, so it’s in their best interest to preserve them in every way possible.
Despite their best efforts, they’re not always able to avoid raising rent.
However, Harris said the goal is affordability, and if other organizations bought the units in question, the rent increases wouldn’t be sustainable.
“Rent can vary depending on the property, so it’s really hard to say how much they change exactly,” he said. “But they will always stay well below market value.”
Looking ahead, Ridd said the UHPF hopes to partner with more landlords who want to sell their properties at market value but don’t want to displace their tenants in the process.
“In most cases, you can’t have your cake and eat it too. But the fund provides such a unique solution that [the landlords] really can,” he said.
