Salt Lake City may require builders to include affordable housing

Salt Lake City leaders are debating a series of moves, some controversial, aimed at creating new affordable places to live. These discussions will likely come to a head in 2021.

They involve incentives to build more homes of different kinds, keep existing ones from being torn down and potentially a new requirement for builders to tuck some affordable units into every project. At the heart of the conversation is a raging real estate market, with supplies of available homes at some of their lowest levels in history.

If you were forced to buy or rent anew in Salt Lake City’, “could you afford to live where you do today?” asked Blake Thomas, director of the city’s Department of Community and Neighborhood Development. “For many of us — including me — the answer might be no.”

As part of the effort, Mayor Erin Mendenhall and the City Council are reviewing draft rules to overhaul how the city deals with off-street parking, recycling old buildings and new rules on single room occupancy buildings or what it now calls shared housing and on permits for building homes on smaller footprints.

The city is also likely to consider zoning rules that developers include affordable rentals in new projects, after members of the Salt Lake City Council on Tuesday urged Mendenhall to make that idea, called inclusionary zoning, a top priority.

Without those and added protections against tearing down homes without replacing them, Councilman Andrew Johnston said, “I’m worrying that we’re not actually going to make a lot of headway as far as geographic equity is concerned.”

The mayor said she would prefer to use community and economic data to target inclusionary zoning, “to do it as effectively as possible.”

Such zoning is often opposed by builders and developers, who contend that it conflicts with private property rights.

Concerns about gentrification

City experts say without action on a number of fronts, particularly aimed at helping those residents who are spending half or more of their incomes to cover housing costs, Utah’s capital could continue to see existing residents dislocated by gentrification.

If we don’t do something about it, we are going to see significant negative impacts to those neighborhoods that right now are our most racially and ethnically diverse,” said City Planner Nick Norris. “These are some of the only places that a lot of our workers can afford to live in.”

The City Council has set aside $100,000 to study how to address the trend and growing risks of new development, property renovations and rising home price displacing residents. That analysis is likely where inclusionary zoning will get its strongest airing, with potential new city rules that affordable units be a required part of all projects.

Years of increasing rents and home prices have outstripped income growth in Utah and across the country, city experts said, leaving existing residents and new families increasingly strapped to afford a home, whether for purchase or rent.

The median home price in Salt Lake City is now more six times higher than its average household income, according to city data. If trends over just the last two years continue through 2030, that price tag will be 11.6 times more than the median household income, the city’s analysis suggests.

Rents keep climbing too, even as more apartments come online. Residents are paying larger shares of their incomes on housing, increasing their overall burdens. At the same time, construction and labor costs on the Wasatch Front are high by historic standards, making it harder to build homes most residents can afford.

Building within existing neighborhoods

City leaders may also strengthen rules that developers must make up for any housing units they tear down, in an effort to stop “naturally occurring” affordable homes being razed or renovated and rented at market rates without a replacement.

City planners have also spent months vetting a larger package of zoning changes meant to encourage new and compatible kinds of housing the city once had plenty of. The city is calling this strategy an affordable housing “overlay.”

It has potential to bring more duplexes, triplexes, basement apartments and detached homes on small lots into Salt Lake City’s existing neighborhoods.

The overlay is still being crafted, but residents might get a glimpse of what some of these changes could look like on a smaller scale, in neighborhoods north of Liberty Park, east of Trolley Square and near Forest Dale Golf Course.

The City Council is already looking at zoning changes on lots in those areas to allow more tiny homes and row homes in backyards. Advocates worry the plan might lead to some units being torn down and replaced with more expensive housing.

The City Council has heard public testimony and is ready to take it up early next year.