This is an archived article that was published on sltrib.com in 2015, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
The Salt Lake City Council has approved a $1 million loan from the city's Housing Trust Fund to build a 274-unit affordable-housing complex aimed at easing the dearth of low-rent units in Utah's capital.
The $47.5 million project, to be called "The 616 Lofts," would be built by Wasatch Residential Group LLC on a vacant 2.3-acre parcel on the southwest corner of 600 South and State Street. Construction, according to the developer, is set to begin Feb. 1 and planned to be completed by July 1, 2017.
In 2013, a housing study determined that the city needed an additional 8,240 affordable units.
To date, Mayor Ralph Becker's 5,000 Doors initiative has created 797 affordable units. The 616 Lofts would bring that total to 1,071.
The seven-story project would include five floors of residential space over two floors of parking with 280 stalls. The ground floor is planned to accommodate offices and retail commercial uses, as well.
A studio apartment would rent for $691 per month; a one-bedroom would be $738; two-bedroom, $880; and a three bedroom, $1,070.
All units would be income restricted to individuals earning 60 percent of the area median income. That would apply to a family of four making $43,320 or less; a two-person household earning $34,656; or a single person making $30,324 (just under $15 per hour, based on a 40-hour week).
Funding for the complex is proposed to tap 4 percent federal low-income housing tax credits, a deferred developer fee and subordinated loans from the state's Olene Walker Housing Loan Fund and Salt Lake City.
The city's loan term is 40 years at 2 percent interest.
Neither the Becker administration nor the City Council has pushed for inclusionary zoning that would require all new multifamily developments to have a certain percentage of affordable units.
The city relies instead on financial incentives such as those used for The 616 Lofts. But some developers avoid that model due to its complexity.
Council Chairman Luke Garrott said the city needs to put more funding into the development of affordable housing. He also favors inclusionary zoning and would like to see lower rents than those outlined by Wasatch Residential.
"Those rents sound like market-rate rents 10 years ago," Garrott said. "Affordability is going to be a challenge for us."
Councilman-elect Derek Kitchen, who will replace Garrott as the District 2 representative in January, noted the gap in affordable housing in the city and said he favors the tax-incentive model used for The 616 Lofts rather than inclusionary zoning.
Although incentives can be complex, Kitchen suggested that developers come to City Hall for help navigating the system.
"The development community could be encouraged to do affordable housing," Kitchen said. "We should use a carrot instead of a stick."
In Salt Lake City, Wasatch Residential Group LLC built and manages Providence Place, 309 E. 100 South, a similar income-restricted project downtown, as well as the Enclave at 1400 South, 1445 E. 300 West, also an affordable-housing project.