Salt Lake City’s mayor and City Council clash over how to fund affordable housing

Salt Lake City’s elected leaders say they agree that increasing the number of affordable houses and apartments remains a top priority.

But the City Council, at least for now, wants more control over how City Hall spends millions of dollars toward this goal, setting up a new power struggle with Mayor Jackie Biskupksi.

In approving the annual budget last week, the council carved out and moved management of nearly $2.59 million in housing loans away from the administration-controlled Housing and Neighborhood Development division, known as HAND.

The council also put the brakes on another $2 million in spending the mayor proposed for housing-related programs, pending further study, to Biskupski’s chagrin.

While council members say the moves are about transparency and fairness in the way the city offers housing loans, a spokesman for the mayor says the shift is already confusing some of the private-sector housing partners and could slow down key projects.

The city has done amazing things with housing over the last three years,” Biskupski spokesman Matthew Rojas said. “We’re still in the middle of a crisis, and we’re concerned about those efforts slowing down.”

Affordable-housing advocates, meanwhile, fear their campaign to ease the region’s ongoing shortage of affordable homes for Utah’s poorest residents could get bogged down in the dispute.

Loans from the housing trust fund are often used to close gaps in financing for developers hoping to build housing units accessible to those at lower income levels. And by partly using loans from the fund, HAND officials have helped spur construction of nearly 2,500 units since Biskupski took office in 2016, according to city tallies.

Now, instead of being supervised by HAND directly under Biskupski’s management, loans from that housing fund are to be doled out on a trial basis by the city’s Redevelopment Agency, which is governed directly by council members in their dual roles as members of the RDA board.

Council Chairman Charlie Luke said in an interview that the change followed several years of discussion and pent-up concerns that HAND’s lending process was not as “open and fair” as it could be.

“It’s our responsibility to make sure that the money is being appropriated the way we intend,” Luke said. “There is more accountability having that money in the RDA as opposed to it being just under the sole discretion of the administration.”

The council has approved reviewing the RDA’s handling of the fund at six-month intervals.

Members also diverted about $125,000 that Biskupski had proposed to spend on a handful of housing programs, including one for landlord assistance and a campaign to expand economic opportunity across the city. Luke said those programs are on hold “because we didn’t get the information we requested.”

In a joint statement read Tuesday as the council unanimously approved the $331 million budget, members said they hoped that moving the housing trust fund would be a precursor to making the city’s lending to developers more consistent and effective.

The council aims to create a “one-stop policy” for all housing loan programs, letting developers apply and have their requests processed and finalized at a single location. Council members say they could have that new policy drafted and adopted as soon as July, possibly with the help of a hired outside consultant.

There are now proposals for splitting the city’s housing trust fund into two accounts, with one account devoted to housing development — run by the RDA — and the other for housing services and programming, operated by HAND.

In addition to streamlining, Luke and other council members say those and related budget moves are also aimed at preparing the city to keep close tabs on new streams of tax money coming into City Hall for housing from the city’s recently passed $87 million “Funding Our Future” bond and a new sales tax authorized for the Utah Inland Port.

“We need a housing policy,” Councilwoman Amy Fowler said during a meeting last week. “We suddenly have some money, and we’re doing this stuff, but are we doing it effectively and correctly?”

Rojas, the mayor’s spokesman, said the city had already created a housing working group, tasked with developing those same policies. Biskupski and others at City Hall believed the group’s discussions would be allowed to unfold before any major decisions were made, he said.

“This is a very significant shift,” Rojas said of moving the loan fund.

At least five developers awaiting loan approvals from HAND, he said, will now have to be redirected to the RDA. Without a formal plan in place for replenishing the fund at the RDA, Rojas said, the city is now one loan away from the account being drained.

“Even slowing down for a month or two months is not where we want to be,” Rojas said. “But whenever you have question marks, you have to take time to answer those questions.”

Alongside HAND, the RDA has also been instrumental in bolstering new construction of affordable housing in recent years, often using different tools such as discounts on city-owned land sold to developers. The agency has had a hand in bringing nearly 2,500 housing units to market during Biskupski’s term, in addition to the dwellings HAND has helped build.

But Rojas and others note that housing projects backed by the RDA have focused mainly on dwellings affordable to those earning between 60% and 80% of the area’s median wages, defined by some as “moderately” affordable. HAND has seen success in encouraging “deeply” affordable units, for residents with incomes at 40% or below the area median.

Luke said the council has been clear it intends the money in the RDA-managed fund to still be “deployed for the purpose of low-income and special-needs housing,” adding that he was confident the RDA can also help build deeply affordable homes.

But the shift and the broader political dust-up over financial control still worry housing advocates who focus on residents at lower income levels.

“This is not about speed in getting the money out,” June Hiatt, director of policy and advocacy for the Utah Housing Coalition, said of the city’s housing trust fund. “It’s about making sure the money goes where it needs to go.”