‘It’s a slap in the face’: Homeless advocates say Utah lawmakers are shortchanging housing projects in a year of surplus

The Legislature plans to provide $55 million for deeply affordable housing, less than half of what Gov. Cox proposed.

(Rick Egan | Tribune file photo) Workers clear the area during the abatement of Fort Pioneer, on Thursday, Feb. 17, 2022.

Utah’s anti-poverty advocates have been hoping the deluge of federal pandemic aid to the state would translate into a generational investment in deeply affordable housing — enough to make a visible dent in homelessness in Salt Lake County.

Now, despite a last-ditch effort to get that money into the state budget, they’re dismayed as lawmakers prepare to cut more than $70 million from Gov. Spencer Cox’s original funding recommendation.

“It’s a slap in the face,” Ty Bellamy, an advocate and founder of the Black Lives for Humanity Movement, said during a livestream Wednesday. “But it’s almost expected, because Utah continues to disappoint when it comes to addressing homelessness.”

While Cox wanted to dedicate $128 million to housing for homeless people, the state Legislature’s current spending plan only includes $55 million.

Utah lawmakers have explained that fully funding each request is impossible and say they’ve done their best to balance competing needs in the annual budget. And even the reduced sum of $55 million would represent an unprecedented state investment in housing with supportive services, says Wayne Niederhauser, the state’s homeless services coordinator.

“I feel extremely grateful that we have a chance to show what we can do with $55 million,” Niedehauser said.

But advocates and service providers say they’re still disappointed, especially since state legislators had a $2 billion surplus at their command and had gotten roughly $1.4 billion through the American Rescue Plan Act.

“The state is flush with dollars, and at no other time have they been in a better financial situation to be able to make this investment,” said Tara Rollins, head of the Utah Housing Coalition. “And this investment would come back tenfold.”

Adding to the frustration is the Legislature’s decision to cut taxes by more than $193 million, with one religious leader this week saying it “rips at the very moral fabric” of the state to prioritize tax relief over affordable housing funding.

Senate President Stuart Adams told reporters that legislators are responding to their constituents by delivering an income-tax cut, which will deplete revenues to a fund earmarked for education and services for children and disabled individuals. He also said the state has already poured resources into addressing homelessness and wants accountability for how that money is spent.

“You’re just not going to throw money at an issue,” the Layton Republican said this week. “You want to be able to get results.”

But Bill Tibbitts, an anti-poverty advocate and deputy executive director for Crossroads Urban Center, said the $55 million might not be enough to produce the dramatic changes that state leaders are demanding — especially when it comes to unsheltered homelessness in Salt Lake City.

“If the camp’s gone, you notice. If the camp is half as big, do you notice?” he said. “Without the full funding, it’s not going to be the kind of transformational visible change that everyone will see. And that’s a shame, because we actually know this approach works and we’re talking about people.”

Niederhauser’s office will manage the money the Legislature sets aside for deeply affordable housing and will award the funding through a grant process outlined in SB238, a bill that has been winding its way through the Legislature.

Under the bill, the state’s homelessness council will review grant applications from developers of deeply affordable housing and evaluate them based on criteria such as the proposed rent structure and the services and case management that residents would receive.

The proposed rents should be affordable to people who earn 30% or less of the area median income, or less than $19,400 a year for someone living in Salt Lake County.

Niederhauser said he’d like to distribute the money by September.

(Rick Egan | Tribune file photo) Wayne Niederhauser the Utah state homeless services coordinator talks to the media after a news conference for the opening of the Magnolia housing complex for people who have experienced homelessness, on Thursday, June 24, 2021.

His office initially requested $200 million for the program and was glad to see $128 million of that end up in Cox’s budget proposal, he said. He concedes he felt “a little disappointment” when he discovered the Legislature planned to whittle the amount down to half of the governor’s recommendation, but Niederhauser, a former Utah Senate president, says he knows firsthand the challenges of balancing a state budget.

Addressing Utah’s lack of housing for extremely low-income residents will take a series of historic investments, said Niederhauser, who added that it’ll be easier to make a case for more funding if his office can show results with the initial round of grants.

One potential recipient for these funds is The Other Side Village, an ambitious project to construct about 430 tiny homes on Salt Lake City’s west side. Niederhauser on Thursday told reporters that with only $55 million available, the village probably won’t end up with the $20 million grant sought by the project’s leaders.

Tim Stay, who sits on The Other Side Village’s board of directors, said he was “puzzled and frustrated” by the cut, given the number of “very worthy projects” seeking state aid to build housing for the homeless. Without public funding, he continued, these types of projects simply aren’t viable.

“The free market isn’t going to provide deeply affordable housing,” he said. “It’s just impossible for a contractor to make that kind of investment and be able to get a return on it without some government intervention.”

Mayor Erin Mendenhall announced plans for the village last year as a key piece in her strategy for addressing homelessness in the state’s capital city, but city council members have to sign off on the project before construction can start.

The tiny home village would greatly expand the state’s supply of supportive housing, or communities where rents are deeply subsidized and wraparound services are available to residents. Utah has seen success with these complexes, reporting that 95% of formerly homeless people who move into these communities stay in housing.

But officials say the need for more of these communities and the region’s overall affordable housing crisis are leaving many people stuck in emergency shelters.

The Salt Lake Valley has been grappling with a capacity crunch in its shelter system for the last several years, with officials and providers scrambling each winter to find temporary overflow space to bring people out of the cold.

Niederhauser has blamed the space shortages largely on the fact that people are staying in emergency shelters for extended periods of time rather than quickly transitioning into housing and freeing up beds for others.