Advocates for Utah’s disadvantaged are urging the Legislature to maintain money for housing even as lawmakers make major funding reductions to balance state budgets damaged by the pandemic.
Another COVID-19-related special session is set for Thursday and legislators say they may have to cancel hundreds of million in new spending approved during their regular session earlier this year, as well as make further “into the bone” cuts of up to 10% or more in the budgets of many state agencies.
Lawmakers on Republican-dominated Capitol Hill are hoping to somehow cover declines in state revenues from the coronavirus.
But advocates for lower-wage workers and the homeless in Utah are asking them to leave intact what they contend is a vital $10 million set aside to boost new construction and preservation of affordable housing.
The funds, set aside in early spring with the passage of SB39, would steer $5 million toward bonds to finance affordable housing construction and $5 million toward saving existing homes otherwise slated for demolition or remodeling that would push their rents out of reach.
Officials with 18 advocacy nonprofits say they’d rather see the state borrow money and tap into more than $1.7 billion in the state’s “rainy day” fund and other budget reserves to cover the COVID-19 gap than make widespread cuts to housing, social-service and public education spending.
A spokeswoman for the Catholic Diocese of Salt Lake City pointed to the ongoing impacts of rising rents and a dwindling number of homes within reach of Utahns making average wages as a major contributor to homelessness — well before the pandemic struck.
“If we truly want to render episodes of homelessness brief, rare and nonrecurring, we must invest in housing and supportive services for those on the brink or already experiencing homelessness,” Jean Hill said late last week, in a joint statement with other groups.
Recent estimates suggest Utah lacks roughly 53,000 affordable homes and that large shares of Utahns are spending a third to a half or more of their incomes on housing, making them vulnerable in a financial crisis. Some economists are warning the state could lose ground in narrowing that affordability gap in light of an anticipated pandemic-related downturn in homebuilding.
Tara Rollins, executive director of the Utah Housing Coalition, has urged residents and advocates to call state leaders and members of the Legislature’s Executive Appropriations Committee in hopes of saving SB39. The bill’s passage, she and others have noted, came this year only after many failed attempts as rents and home prices have escalated in Utah at near-record rates.
“We can not afford another year in not investing in Utah’s much needed affordable housing stock,” Rollins recently told supporters.
Private donors in Utah announced in early March the creation of a new fund aimed at preserving between 500 and 800 affordable homes; the $5 million dedicated under SB39 to housing preservation was seen as essential public support for that effort.
Fund organizers said two weeks ago that, with the help of Zions Bank, Intermountain Healthcare and the private Clark and Christine Ivory Foundation, they’d already assisted in buying and saving 46 dwellings in a deal with Salt Lake County’s housing authority, known as Housing Connect.
An official involved with that fund said Monday the way its deals are structured with a blend of public and private funds in leveraged borrowing, that $5 million from SB39 will be amplified into as much as $50 million in gains to the housing market.
“There is no better time for housing preservation and stability than right now,” said Michael Parker, senior economist with Ivory Homes, Utah’s largest homebuilder. “And that is money that can hit the street quickly.”
The other $5 million in SB39 also has a broader market impact, supporters said, by providing what’s known as “gap financing” to developers of affordable housing, with some estimates that the cash could fuel up to $120 million in economic activity.
That stimulus, according to Bill Tibbitts, a hunger and homelessness advocate at Crossroad Urban Center in Salt Lake City, “will create a decent number of jobs while making a real dent in our shortage of affordable housing units.”
It will also help to avoid worsening a homes shortage exacerbated by the last economic downturn, he said, when homebuilding slowed.