Housing shortage is getting so bad in Utah, employers are starting to step up

For a pioneering no-kill animal shelter located amid the grandeur of Utah’s national parks, this is wild territory.

A chronic housing shortage in and around Kanab has recently turned much worse and Best Friends Animal Society — Kane County’s largest employer with around 850 workers and 40 job openings — says it’s building affordable housing for its workers.

Company leaders, homebuilding partners and their pets celebrated recently by tossing shovels of red dirt at a groundbreaking that is reverberating as a first in the nonprofit world.

With the way Utah’s housing market is turning, it’s also a harbinger of what’s to come for other major employers, especially for those enticed to come to Utah with public funds.

Echoing old company towns in Utah’s early mining history — places like Magna, Bingham and Copperton — the Best Friends animal sanctuary is building 12 duplexes for 24 dwellings in Kanab with private yards, garages and appliances just a 15-minute drive away, with the first units to open sometime in 2023.

They’ll be set aside, Best Friends CEO Julie Castle said, as affordable housing for incoming recruits and existing staffers.

“Retaining and attracting talent is critical to our mission and after surveying our staff on a couple of occasions,” Castle said, “housing was a red-hot-button issue.”

The $6 million homebuilding project was debated long and hard within Best Friends, she said. “We knew that this was highly unusual. The first thing we did was cast around for examples, and we literally just could not find many out there.”

Built with bank financing and without drawing on donor funds, the homes eventually will be managed by a third party and will charge rent, Castle said, while also letting Best Friends keep the units “very affordable to our staff.”

What COVID and Airbnb have done to housing in resort towns

When she first landed in Kanab and went to work for Best Friends 26 years ago, Castle said, she lived in a van for a time and showered at an area gym. She eventually found roommates and hoped the community’s growth would gradually make things better.

“Year after year,” she said, “it just never improves.”

Now, under immense pressures unleashed by COVID-19 and the growing phenomenon of short-term rentals, the city’s perennially tight market has edged into desperation for many residents, especially those working service jobs.

“We were kind of discovered as one of the Zoom towns,” Castle said of the influx of pandemic incomers “who got in their cars and RVs and just starting working remotely and hunkering down in these communities that they really had never explored before.”

“It’s put the visitation and discovery of Kanab on hyperdrive,” the CEO said. “We’ve got all these people who are moving here buying homes. Prices are escalating rapidly.”

As with the rest of Utah, home prices in the community have jumped higher and faster over the past two years than in the previous decade — for rentals and homes for sale.

In Kanab and other gateway recreational and resort enclaves, there’s an added share of Airbnb and similar rentals in the housing stock earning higher dollars from tourists, meaning a bigger slice of homes are out of reach for workers seeking extended leases.

For Best Friends, that shortage has sometimes fallen hard on employees in animal caregiving positions. Even after a significant pay bump — starting wages in the post run between $48,000 and $50,000 a year, “unheard of in our field anyway,” said Castle — those workers can still struggle to find a decent place to live in Kanab.

“You hear stories about people living in tents, people living in garages, having multiple roommates,” Castle said. Others take on long daily commutes, from surrounding towns like Glendale, Orderville or Hurricane, more than 40 miles away.

“People should not only have a livable wage,” Castle said, “but they should also have a safe and nice place to call home. ... This is just part of doing the right thing.”

“I don’t want to make it sound like we’re all rainbows and butterflies here. We do run a $120 million business,” Castle said. “But this really is guided by our core principles and strong belief that if you take care of your most valuable asset, which is your employee base, you’re going to reap the rewards of that — and in really unexpected ways.”

South Jordan’s idea of workforce housing

In the Salt Lake Valley, Joshua Timothy landed a job as a videographer for the city of South Jordan but could not afford to move and commuted from Taylorsville for several years as he watched his chances of affording to buy a home in the suburban community fade.

“You can’t save money faster than the market was growing,” said the father of six. “By the time you have $5,000, you need $10,000. And by the time you get $10,000, you need $20,000, you know?”

Timothy, 32, now owns a home he could only dream of before, one of nine dwellings built in a public-private partnership-turned-demonstration project between South Jordan and Ivory Homes for what is called workforce housing.

To his growing family, it’s a three-bedroom town home with a two-car garage and an unfinished basement in a small development called Bingham Court, where homes are subsidized for purchase by public workers such as police officers, firefighters and teachers.

“Being able to live in the city, you almost provide better service,” said Timothy, who doesn’t have to drive 30 minutes anymore to get live pictures or video of the city’s latest doings.

Sales prices on the homes are reduced by $100,000, which by deed covenant gets passed from owner to owner. Each buyer can reap some of the wealth generated by price gains the home might enjoy from year to year, but that is also capped to ensure the property stays affordable.

“It’s one of the cool things about the program,” Timothy said. “They’re giving you a deal and then you help somebody else in the future when you sell if they meet the same criteria.”

Workforce housing is harder for business to ignore

South Jordan and Park City offer some of Utah’s only examples in this current housing crisis of employer-backed workforce housing in action — in the public or private sector.

Utah’s Top Workplaces list a robust array of benefits for employees, but few have housing-related incentives on their lists.

Of large employers on the 2022 rankings contacted by the Salt Lake Tribune, home lender Zions Bank said it offers mortgage loan discounts to employees, including reduced closing costs, other waived bank fees and interest rate benefits.

But another result of the pandemic — heightened demand for workers and the need to strengthen recruitment and retention — is forcing housing onto the radar for more and more businesses, especially in places in Utah where the crisis is biting the hardest.

“The market is actually driving this now,” said Jason Glidden, affordable housing manager in Park City. The glitzy Summit County resort community now has the median home price in Old Town topping $2 million and, according to a new study, short-term rentals dominate its neighborhoods more than in any Utah city.

Surrounding communities such as Heber and Coalville are also pricing out workers. Some of the region’s largest resort employers such as Stein Erickson Lodge and Deer Valley Resort are securing mass leases on apartments in Park City and the Salt Lake Valley and then subleasing them more affordably to their hospitality workers, who are also sometimes bused to and from their job sites.

“What they’re seeing now is that it’s more of a necessity,” Glidden said. “For them to be able to operate efficiently and at the levels they want, they need to find housing for these employees.”

Park City has led on housing for years

Park City itself has more than 40 units of what it calls transitional housing, Glidden said, “and that’s really for recruitment purposes and for hiring into a new position and getting them into the community.”

But even after a typical yearlong lease, he said, “they’re still not finding a place here in town.”

The city also has developed its own housing “because the private sector wasn’t doing it,” including single-family homes and town homes for sale. By priority of the Park City Council, these are available to workforce members citywide, not just city workers.

A needs assessment issued in January found the city needs another 1,200 affordable units just to maintain the status quo of 15% share of its entire workforce living in Park City, as opposed to 85% who commute from other communities. That city has a goal of adding 800 units of affordable housing by 2026.

That matters in light of the city’s hopes to lessen traffic congestion and air pollution.

Unlike other Utah cities, Park City also gets to use inclusionary zoning to tie new development to adding residential units, letting it require that homebuilders make up to 20% of dwellings in a project affordable — but also make commercial developers build housing in proportion to the jobs they generate in the community.

That’s partly because Park City had that kind of zoning in place well before lawmakers restricted it at the state level.

“To be honest, for us it’s a negotiation with the developer,” Glidden said. “And a lot of the developers understand the need for affordable housing and that it actually makes their projects, especially on the commercial side, work better.”

Will legislators really make developers do more?

Now, there are moves on Utah’s Capitol Hill to tie state business development incentives with residential growth in a kind of reaction to the housing gap yawning behind rapid growth and now compounded by effects of the coronavirus pandemic.

The state’s traditional all-out approach to recruiting new job-generating employers and enticing expansions are increasingly running up against record low unemployment and the reality of housing affordability problems. Remote work, which allows some companies to leave employees in place until they can find new homes, only helps in certain sectors.

Officials with Silicon Slopes, nickname for the state’s technology sector in southern Salt Lake County and northern Utah County, are watching closely how the state will develop lands at The Point, site of the former Utah State Prison, which is promising to bring new housing to the rapidly growing Draper area.

A new proposal likely to come before state lawmakers will require that employers receiving state incentives through the Governor’s Office of Economic Opportunity to relocate Utah must be involved in developing affordable housing for up to 20% of their employees — and slightly more costly attainable housing for up to half their workers.

Ginger Chinn, vice president of public policy at The Salt Lake Chamber and a former official at the Governor’s Office of Economic Opportunity, said with the effects of rampant growth, there’s an inescapable shift in the idea of economic development and how enticements for businesses are being viewed in city halls and on Capitol Hill.

They’ve shied away from burdening employers in the past for fear of losing out to other cities or states. But no more.

“Utah’s talking points were, we have quality of life and we have affordable lifestyles,” Chinn said. “You know, our energy is low. Our water is low. Our housing costs are low.

“We can’t say that anymore. We don’t have the Utah discount anymore,” she said. “That doesn’t exist. Now the question is, where are the people going to live?”

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