Salt Lake City has $22M to spend on affordable housing. A North Temple motel teardown is first on the mayor’s wish list.

(Steve Griffin | The Salt Lake Tribune) The Overniter Motel at 1500 west North Temple in Salt Lake City Monday October 23, 2017. Salt Lake City's Redevelopment Agency has proposed a $4 million loan to buy the and replace it with a development that includes affordable housing, part of a broader plan to create more than 750 affordable units using $22 million set aside by the City Council.

Salt Lake City has less than two years before its homeless shelter system will be reduced by 400 beds, and city officials have vowed to create 1,000 units of deeply affordable housing to meet the need.

Redevelopment Agency staff will argue at a special Tuesday meeting that it’s time they get started.

Their hope is to use $4 million of $22 million set aside for affordable housing last year by the City Council (which also acts as the RDA board) to raze a disreputable North Temple motel and erect a $44 million mix of market-rate and affordable housing in its place, with the help of the Western Regional Nonprofit Housing Corporation.

The Overniter Motel would not be mourned long, at least not at City Hall. City records show 10 cases of code violation since 2008.

“This motel tends to draw problem tenants and the pattern is it draws a lot of attention, we initiate enforcement, the property owner brings it into compliance and then [the cycle] starts over,” wrote city spokesman Matthew Rojas in an email.

Its owners were charged with felony manslaughter last summer after a 96-year-old woman — the mother of one of the owners — was found dead in one of the motel’s rooms due to what the state medical examiner declared “chronic neglect.” She weighed 72 pounds.

According to the indictment, a county health inspection of the room “found the mattress was stained with urine and feces, and rags with fecal material were found behind the mattress. The toilet did not flush properly, the bathtub did not drain properly, and when inspectors turned on the water in the bathtub, the water came out orange.”

RDA Chief Operating Officer Danny Walz said the proposed $4 million loan for acquisition of the motel “probably kills about three or four birds with one stone.” It would add to the city‘s affordable housing stock while removing a blighted property that may be constricting growth in an area the RDA has its eye on.

Specifics about the development aren’t yet known. An RDA draft proposal says 120 of the 300 units would be rented to those earning a set percentage of the area’s median income (AMI), while a memo from city administrators said a “majority” of the units would be rented to households at 60 percent AMI or lower.

Melissa Jensen, director of the city’s division of Housing and Neighborhood Development, said the city has heard frequent complaints about seedy motels, and its “blue-ribbon commission” on affordable housing “saw the opportunity to say, ‘I think we can do something great with these motels.’”

The commission — made up primarily of local investors and developers and convened earlier this year by Salt Lake City Mayor Jackie Biskupski — has also proposed spending $4.1 million to buy the Capitol Motel at 1749 S. State St.

There, it anticipates a $21 million development that would add 150 total housing units, of which 60 would be affordable. That property is under contract, too, but unlike the North Temple motel, it doesn’t have an applicant waiting to develop it.

The motel acquisitions and other commission recommendations were included last week in the RDA’s draft proposal for spending $22 million on affordable housing. A council discussion of that proposal is tentatively scheduled for Nov. 14.

Through acquisitions, investment and a new incentive program, the RDA says it could help create more than 750 affordable units. Of those, more than 400 would be rented to those earning 40 percent or less of AMI — which comes to about $25,000 for a family of four, Jensen said.

The plan includes a contribution of $2 million toward two already planned developments: a mixed-income project at the corner of 400 South and 300 East and permanent supportive housing at 525 S. 500 West. Subtracting those investments and their 325 affordable units, the remaining $20 million would buy just 440 affordable units.

That the money doesn’t go further is “sobering data for everyone,” Walz said. “When we‘re talking about homelessness and providing housing for that demographic and people at that income level, that amount — that subsidy per unit — increases significantly. That is the most difficult type of housing to provide.”

And Utah’s affordable housing problem is really stark for those even lower on the income scale.

The National Low Income Housing Coalition estimates that Utah has a shortage of 47,000 homes for extremely low-income renters, or those at less than 30 percent of AMI. A draft housing plan released by Salt Lake City in February cited a 2010-2014 analysis that found a shortage of 7,500 rental units for households making $20,000 or less per year.

Jensen said the commission “spent four months figuring out what we couldn‘t do, because this is an incredibly hard problem to solve.” Scrapped were models that provided up to 100 percent low-income housing, she said, because they weren’t economically feasible.

The commission also altered its focus slightly during this year’s general session of the state Legislature, Jensen said, when Biskupski joined state and county leaders in agreeing to close the 210 S. Rio Grande St. shelter by July 2019.

Three new homeless shelters expected to open in its place, combined, will provide 400 fewer beds than the 1,100-bed shelter operated by The Road Home in the Rio Grande neighborhood.

At a state homelessness summit earlier this month, any speaker’s mention of “housing” drew applause from area service providers. Road Home Associate Executive Director Michelle Flynn was inspired to begin and end all of her panel discussion contributions by repeating the word: “Housing.”

Still, council members are likely to have a few questions about the loan proposal Tuesday. Among them: Why should the city acquire new properties when it already owns properties that it has yet to develop — which Councilman James Rogers quizzed Walz about earlier this month when Walz bid $4 million to buy back a blighted development at 255 S. State St.

Council members have also been wary of concentrating affordable housing in so-called “low opportunity” areas, like western North Temple, and of developments that contain what they regard as too high a percentage of affordable housing.

By mixing rates, they might avoid saddling neighborhoods with problems popularly associated with so-called “project” housing.

Walz noted that the RDA’s proposal includes at least $2.5 million in incentives for affordable units in “high opportunity” areas. Areas receiving the highest score for “opportunity” are east of 700 East between 800 South and Interstate 80, and along the city’s more affluent East Bench.