As Utah Legislature prepares to debate housing affordability, some call for tougher penalties on cities that don’t comply

(Francisco Kjolseth | Tribune file photo) Snow falls on the Utah Capitol, as seen on Dec. 4, 2017. As the 2019 Utah Legislature readies to take up the issue of housing affordability, some are saying the state’s approach isn’t tough enough on Utah cities.

The latest state ideas for improving Utah’s housing affordability picture give cities lots of flexibility, but officials with the Salt Lake Chamber and Utah’s largest homebuilder say that approach isn’t tough enough.

As they met Friday to finalize a package of proposals before the Legislature convenes Monday, members of the state Commission on Housing Affordability clashed over a key proposal to withhold transportation investment cash from cities that don’t create plans to encourage moderately priced homes within their communities.

That provision is a crucial part of the commission’s SB34, along with an expanded list of steps cities can take to promote affordable housing, such as approving mother-in-law apartments, lowering so-called impact fees for developers and promoting high-density housing near transit lines.

Cities need only take two or more of 15 strategies to promote affordable housing to meet the bill’s requirements, along with developing overall land-use, housing and transportation plans and submitting them yearly to the Department of Workforce Services.

SB34, sponsored by Sen. Jacob Anderegg, R-Lehi, would also put an additional $20 million into the Olene Walker Housing Loan Fund in 2020 for low-interest housing loans and grants, followed by another $4 million each year after that.

Anderegg acknowledged the bill did not do enough to promote housing affordability, but he said the complex problem would take years to more fully address.

“Let’s see what we can do," he said, “and then let’s see what we have to do next.”

The Commission on Housing Affordability, created in 2018 to address the state’s gap in available homes, is made up of business leaders, city officials, planners, homebuilders and housing advocates from across the state.

But after almost nine months of its debate, an official with the Salt Lake Chamber, which represents businesses, said Friday that linking long-range transportation investments with city compliance on the urgent problem of housing was ineffective. Spending from the Utah Department of Transportation’s Transit Transportation Investment Fund, or TTIF, is planned five years in advance, while the state “is seeking immediate action” on affordable housing, according to Brynn Mortensen, public policy and special projects coordinator for the chamber.

Mortensen proposed removing all enforcement mechanisms from SB34 for the 2019 legislative session, then revisiting the notion of tougher penalties on noncompliant cities later. A key player with the state’s largest residential developer agreed.

The current approach, said Chris Gamvroulas, president of development for Ivory Homes, amounted to “kicking the can down the road for another five years” because cities are less concerned about TTIF cash than other sources of state money for roads. He called withholding TTIF cash “unimpactful” on cities as Utah works to close a deficit of nearly 50,000 affordable homes statewide.

“Not building a transit station is not going to move the needle,” he said. Gamvroulas, who is serving on the commission as a representative of Utah Homebuilders Association, instead urged the group to consider holding back money for city road repairs and improvements, known as Class B and C road funds — a move likely to meet stiff resistance from cities and towns.

“We need to start acting like it’s more important,” Gamvroulas told the group. “We need more relevant and timely solutions.”

Other commission members disagreed, with Anderegg countering that transportation investments were of keen interest to many Utah communities. Others urged the state needs to send a "definite signal,” as one put it, of the importance for cities to draft moderate-income housing plans, especially in light of a policy passed last year tying the planning of state transportation budgets more closely with city land-use plans.

“With this legislation coming out, we need to show there is some teeth behind this,” said Mike Akerlow, CEO of Community Development Corporation of Utah. “This doesn’t mean that next year we can’t come back next year and put something else in its place.”

Their motion defeated, Gamvroulas and Mortensen nonetheless voted to support passage by the Legislature of SB34, which the commission endorsed unanimously. Anderegg said the bill’s latest draft would be introduced shortly after the 2019 legislative session convenes Monday and had already been presented in concept to Senate Republicans.

Friday’s debate came as state housing advocates were also preparing for looming disasters spawned by the protracted partial U.S. government shutdown.

Interruption of several federal rental subsidy programs threatened a catastrophe for thousands of elderly residents, veterans, folks with disabilities and families earning below average wages, advocates told the commission.

As word slowly emerged early Friday of a possible compromise in the federal budget impasse, the commission was even considering creation of an emergency pool of state cash to temporarily replace money paid to landlords and property owners by the U.S. Department of Housing and Urban Development, rather than risk hundreds more Utahns becoming homeless.

In particular danger, according to Janice Kimball, executive director of Salt Lake County’s Housing Authority, are roughly 11,600 families receiving HUD’s Section 8 vouchers. The continuing loss of at least $6.9 million a month paid by HUD to landlords and property owners statewide to subsidize those rents, Kimball said, “would be devastating to our partners on this program.”

It was unclear late Friday if those same problems would resurface if negotiations to resolve the federal budget dispute fall through.