Salt Lake City is weighing another major round of enticements meant to spur construction of smaller and more affordable homes in many residential and commercial areas.
Vetted since late 2019, these incentives would offer developers and homeowners a trade: by agreeing to include a specified share of rent-subsidized dwellings in new housing they might build, they could win rights to add more units, make their buildings taller and, in some cases, get faster permit approval without public hearings.
The package of zoning changes — sought by Mayor Erin Mendenhall and now headed to the City Council — would boost permitted density and building heights along transit lines and in many residential and business zones, as part of that bargain. It also would expand where duplexes, triplexes, backyard cottages, row houses and other smaller housing types can be allowed into zones previously limited to commerce, mixed uses or single- and two-family homes.
The idea is to give for-profit developers new inducements to add affordable units to what they’re building while letting those constructing more affordably priced homes increase the number of dwellings in their projects and still have them pencil out.
“One of the hardest things to do is to put affordable housing into new developments,” said planning commission member Jon Lee, who is also an architect. The latest approach, Lee said, “is not perfect, but it’s a start.”
Yet after drawing a barrage of criticism a year ago from residents wary of how their neighborhoods might be affected, the updated incentives are being labeled by some as flawed or too mild to make a significant difference. Buttressing that view are findings from several developers that the package would have mixed effects.
While some of the changes might improve already affordable projects, “unfortunately, I’m not convinced that the other incentives will work,” said Brenda Scheer, another planning commission member and a University of Utah emeritus professor in architecture and urban planning.
“I’m also convinced that we’re opening a Pandora’s box for the single-family neighborhoods,” Scheer said, “that we don’t actually know how to control or mitigate.”
She warned that approving the plan might make city officials complacent in continuing to address the housing crisis: “We will be able to say, ‘OK, we’ve dealt with affordable housing.’ And that is completely wrong.”
Commission colleague Andra Ghent said the new strategies amounted to a version of inclusionary zoning, although crafted to get around curbs imposed by the Utah Legislature. Extensive research, according to the U. professor of finance and real estate, indicates that “is not good for affordability.
“Other cities have tried inclusionary zoning,” Ghent said, “and it’s never been effective.”
Not so, countered city Planning Director Nick Norris.
The city’s latest proposal is “completely opposite,” he said, to inclusionary zoning, where developers are mandated by law to include a share of affordable homes. These incentives are voluntary, Norris noted, and similar strategies deployed in Los Angeles, Cambridge, Mass., and elsewhere have “been successful” in producing more living units.
The approach, however, is relatively new, said Norris, who added that zoning regulations can take years to have an effect. “We can be one of those cities, too, to see how these progress and to see if they work.
“The original intent of this project was to make taxpayer dollars go further than they currently are,” Norris said, referring to city subsidies for affordable projects, “but without also increasing density across the board.”
New housing pushed on several fronts
Despite concerns, the commission voted 8-3 on Wednesday to recommend the City Council approve the incentives. It was unclear how soon the council may take them up.
Commissioners also gave a thumbs-up to the city’s draft five-year plan for complying with state mandates for addressing an ongoing shortage of more moderately priced homes for rent and for sale.
Under that blueprint — also headed toward council review — City Hall is setting a goal of approving 10,000 new housing units, with at least 4,000 of those to be kept affordable for those making 80% or less of the region’s prevailing median wage.
Housing SLC, as the plan is called, envisions a substantial boost in assistance to thousands of low-income renters and families in the city who may be struggling to stay in their homes as well as expanding programs that create more affordable paths to homeownership. It would also bolster preservation of existing affordable homes, among 18 strategies it proposes to foster more moderate-income housing.
The city’s latest debate on stimulating housing construction is shaping up just weeks after the council approved a much-discussed overhaul of its rules for accessory dwellings, making it easier for homeowners to build add-on homes in their backyards.
Incentives tweaked after focus group weighed in
Work on the incentives started shortly before Mendenhall took office in 2020, and the public got its first input of what was then called an affordable housing overlay last May. Avid criticism at the time led the mayor to convene a focus group of developers, housing advocates, policy experts and community representatives in hopes of reaching consensus.
Based on that input, the incentives no longer limit the introduction of new housing types to those single- and two-family home neighborhoods located in proximity to arterial roads or mass transit or bus lines. Taking that out, the thinking goes, would spread the incentives more equitably citywide while taking into account the unpredictability of Utah Transit Authority’s bus routing.
The package now includes bonuses for additional permitted dwellings and looser zoning and affordability rules for property owners who choose to preserve existing homes on their lots and build tiny homes around them. And there are more detailed design standards — more durable materials, better entrances and required yards or patios — for a range of new smaller home types that might be built in existing residential areas.
The focus group also reportedly pressed for additional perks for construction of more deeply affordable homes, accessible to those earning in the range of 30% of prevailing median wages.
The city had several developers model how the zoning changes might have affected some of the housing projects they’ve recently completed or have underway. Giv Group, which constructs affordable housing, found the incentives would have let it build substantially more units than allowed under existing zoning on three projects it studied.
For those building market-rate housing, however, the incentives did not always provide for enough profit to make new development financially viable, according to other modeling, particularly in the city’s single-family and two-family zoning districts.
For those constructing new dwellings for sale, modeling the incentives indicated that fourplexes offered the greatest financial returns. When it came to rentals, the city found, town homes or row houses seemed to bring the highest returns, but, depending on owners’ goals, those “may not be sufficient.”
What about enforcement?
The affordable housing incentives are also raising concerns over how they might — or might not — be enforced with regard to new deed covenants written to ensure property owners stick to the rules on affordable rents and income restrictions for tenants.
The package calls for owners to self-report yearly on their compliance — or face fines or revocation of business licenses in cases where new homes are built on a commercial property. It also contemplates hiring additional enforcement officers, depending on how many property owners pursue the incentives.
That aspect of the plan has its skeptics. “I don’t think the city has the staff or the political will to enforce this in any meaningful fashion,” said Brian Burnett, vice chair of the Foothill-Sunnyside Community Council. “So you’ll probably never know whether or not we have affordable housing in these districts.”
Along with its endorsement Wednesday, the planning commission also voted to reevaluate the incentives two years after their adoption by the council.