Will more basement apartments help ease Utah’s housing crisis? Lawmakers think so.

Legislature approves a bill that would force cities to let most residents rent out units inside single-family homes.

(Rick Egan | Tribune file photo) Utah House members, seen here Friday, Feb. 26, 2021, approved two bills Thursday aimed at easing the state's affordable housing shortage. One of them is designed to create more basement apartments inside owner-occupied single-family homes.

In their first major attempt of 2021 to address Utah’s housing shortage, state lawmakers approved a measure Thursday that would mandate cities to allow most residents to rent out basement apartments inside their single-family homes.

HB82 would replace a patchwork of disparate policies in at least 60 of Utah’s larger cities with a statewide approach that allows such dwellings inside owner-occupied houses.

Sponsoring Rep. Ray Ward, R-Bountiful, said Thursday final changes to the bill had drawn clearer lines on city authority over these internal apartments and let cities exempt certain neighborhoods, especially in college towns where these units might overwhelm residential areas.

Ward has portrayed the measure as a key to creating new housing and bolstering the property rights of homeowners “who choose to share their living space and will do so in a way that treats their home and their neighborhood with great respect.”

Lobbyists for the Utah League of Cities and Towns had hotly opposed HB82 until it was amended to let most cities carve out a quarter of their residential zones — and give them authority to license and regulate the add-on dwellings in limited ways.

Without some of those limits, particularly on city powers to levy enforcement liens, key lawmakers had threatened to fight the measure out of concerns that cities might also try to regulate short-term rentals like those listed on Airbnb and Vrbo — an idea that rankles many of Capitol Hill’s property-rights proponents.

Passage of what was HB82′s fifth major draft Thursday came a day after House and Senate leaders joined some of Utah’s top philanthropists in a promise to spend millions in taxpayer and donor dollars on affordable housing, both by preserving existing homes and lending for new construction.

Thursday’s vote also came as lawmakers approved a separate watered-down affordable housing bill, SB164, that creates a system for cities to donate land for residential developments, puts new cash toward early development of housing in rural areas, and funds new state mediation programs aimed at staving off evictions.

A much-contested blanket ban on Utah cities using inclusionary zoning — where private developers are required to include affordable homes in their projects — got stripped out of SB164 in late February and referred for further study over the summer.

The product of a year’s work by the state Commission on Housing Affordability, SB164, introduced four days before the session’s end, has since sailed through the House and Senate with scant discussion and saw final passage Thursday.

The Senate sponsor for SB164 and HB82, Sen. Jake Anderegg, noted that a statewide housing shortage is motivating all these moves. By the latest estimates, Utah has an alarming housing gap of tens of thousands of affordable homes. He said earlier in the 45-day session that while the free markets are expected to address at least 85% of Utah’s current housing problem eventually, “for those at lower median incomes, i.e., renters, it’s a critical issue, and it’s getting worse.”

Adding new accessory dwellings inside existing homes has proved controversial in many cities, with residential homeowners often raising concerns over issues such as parking, noise, demand on city services, and altering the character of neighborhoods.

Many homeowners who pursue these dwellings, particularly external units like cottages and tiny homes in their backyards or over garages — which aren’t included in HB82 — find them expensive to build.

But Anderegg said that permitting new apartments tucked inside existing homes, particularly those owned by empty nesters whose children have moved out, was unlikely to create often-cited problems such as taxing existing city sewer and water capacity.

“This is the low-hanging fruit,” the Lehi Republican said. “If we’re really going to close that gap to any sort of marginal amount, this is the easiest way to do it.”

He added that despite initial cries the proposal trampled on local control, some city officials had told him privately they welcomed the changes as a way to encourage new housing with a relatively low impact in neighborhoods.

“Sometimes those city council members like it when the Legislature intervenes,” Anderegg said, “so that they can do what they know is right, even though it’s politically hard.”