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Salt Lake City leaders took a second stab at a deal to add affordable housing downtown, endorsing a land-for-dwellings swap worth at least $3.2 million in free property to developers.

The latest approval by the city's Redevelopment Agency (RDA) greenlights a 183-unit residential, retail and green-space project at the city-owned former Utah Paperbox site, near 200 South between 300 West and 400 West.

Plans by Clearwater Homes and PEG Development call for three thin five-story buildings near Vivint Smart Home Arena, rising above a mix of ground-level stores, a hotel courtyard and three new miniparks along a tree-lined pedestrian corridor.

With Tuesday's vote by the City Council, acting as the city's RDA Board, the midblock project could be built as soon as early 2019 — with 36 of the new apartments rent subsidized to match the budgets of lower-income residents.

First approved in January, the Paperbox deal was yanked back by incoming Mayor Jackie Biskupski, who wanted it recast for a bigger share of affordable units. Officials estimate that the city has a shortage of at least 7,500 dwellings suitable for those who earn well below the region's average household income.

Biskupski and the council have made promoting affordable housing citywide a priority and are cramming to develop new policy and financial tools to that end.

After eight months of reworking the Paperbox plan, the city is using a land swap to meet its stated goals for redeveloping downtown and bringing in high-quality housing for mixed incomes, multiple generations and varied household sizes. The transaction forgoes state and federal tax credits more commonly used in Utah and elsewhere to underwrite affordable housing.

RDA project manager Ben Davis told council members that working without low-income tax credits made affordable housing projects "extremely difficult."

The RDA set aside 20 percent of dwellings in the Paperbox project for rent subsidies, essentially by giving developers the disused two-acre parcel — choice property in the central business district, worth at least $3.22 million — free of charge.

Under a deed covenant, those apartments would remain affordable for 30 years.

The deal makes apartments affordable to those making 60 percent of Salt Lake County's average median income. So while similar studio, one- and two-bedroom units might otherwise be leased at monthly market rates of $1,100, $1,250 and $1,550, the land subsidy brings those rents to $713, $768 and $911, respectively.

Clearwater Homes CEO Micah Peters had argued his losses on below-market rents would match the value of city's donated land after 13 years, meaning his company and PEG Development would be giving up millions of dollars over the remaining 17 years as "a bonus."

"There is a cost," Peters said, "to developing these affordable units."

Councilman James Rogers countered that the Paperbox parcel's value was also likely to rise dramatically over those years, "so this is not a big giveaway."

Twitter: @TonySemerad