The housing market: How Utah might force cities to build more housing

As one of the fastest-growing states in the country, Utah struggles with a severe housing shortage—but also has growing pains that fuel public frustration, often resulting in rambunctious city council meetings. Neighbors in arms On another proposed subdivision.

Meanwhile, developers are pointing fingers at the city’s cumbersome and unpredictable operations that both increase their costs or derail projects.

So, as the country’s leaders, many of whom have served as developers themselves, they’ve been exploring ideas to help get it off the ground The estimated housing shortage is 31,000 units in Utahthey put their crosshairs on policy changes that would reduce the chances of a public hearing for certain projects — as well as adding penalties for cities that don’t include middle-income housing in their plans.

Sen. Lincoln Fillmore, R-South Jordan, told the governor’s office Combined Economic Opportunity Committee on Wednesday what he plans to include in the “Achievable Housing Bill,” which has yet to be announced as it’s being drafted.

Fillmore said the bill includes some “big and bold policy solutions” intended to help address the housing shortage in Utah.

“Everything we’re trying to do here has to do with increasing supply to keep up with the very high demand created by the very strong Utah economy,” Fillmore said.

First, the bill would change the way cities would be required to handle subdivision plans. He said the bill would “streamline” and “make the process standardized and predictable by which people who build affordable housing… get them to market faster.”

Under the bill, there would be “legislative approval at an early stage” for the subdivision plan. But once that approval happens, the developer can move forward knowing, “My plan is approved.” Fillmore said, “I don’t have to go back to this municipal authority every time… I just want to implement what’s already been approved.”

Currently, subdivision plans can undergo multiple public hearings after initial approval. The Fillmore bill would reduce that to one public hearing opportunity, at the start of the process. It will also explain that the implementation of the approved plan is an administrative function, and therefore not subject to public hearings.

“It will really streamline the process, make it more predictable for developers and shorten the time it takes for projects like this to get to market,” Fillmore said. “Time is money,” Fillmore said, “Hopefully, that will also have an impact on bringing down the cost of housing.”

He added that the bill would “take the same concept and apply it to other types of development,” such as Station area plansor projects oriented around transportation axes.

South Jordan Mayor Don Ramsey, who sits on the Unified Economic Opportunity Committee, thanked Fillmore for his work, and added that she wanted to make it clear that the streamlining subdivision approval process provision would still allow for an open process and public hearing “at the beginning of the process.”

“There is definitely still public input, there is still an open process at the beginning, but once this project is approved, then yeah, it’s administrative and it moves forward,” she said.

Weber County Commissioner Gage Froer also spoke in favor of streamlining the subdivisions, saying it would provide an opportunity for the public to influence a proposed project, “but at the same time not (give) the three public swings at the bat to derail a development.”

Cameron Dale, executive director of the Utah Association of Cities and Towns, told Deseret News in a statement that the proposal to change the process of how cities manage subdivisions “will positively impact all new housing developments in Utah.”

“We believe this proposal will improve efficiency and predictability around the subdivision process while respecting city leaders’ role in planning for our communities.”

Second, the Fillmore bill would also seek to sharpen Utah’s teeth when it comes to penalizing cities that didn’t include middle-income housing in their city plans. Currently, Utah law penalizes cities that fail to adopt or make progress on middle-income housing plans by making them ineligible for transportation investment fund dollars, or state money earmarked for larger regional projects.

However, Fillmore said that can sometimes be problematic. “We’re going to be in a situation where we might hold Lyndon hostage to Orem’s failure to make progress on their housing plan. If Orem can’t get funding, it only creates more traffic problems in Lindon and Provo.”

Therefore, Fillmore said he aims for a penalty “more targeted at cities,” by withholding state money for road improvements known as Class B and C money.

In addition, Fillmore said lawmakers would consider making clarifying changes to a Utah law passed in 2021 that sought to break down regulatory barriers. Attached residential unitsalso known as mother-in-law’s flats.

“We just want to toughen up the language to make sure we hit the mark on the attached condominiums,” Fillmore said.

Last week, Speaker of the House Brad Wilson, who has worked in real estate as a commercial developer, told Deseret News in an interview last week that he believes there must be free market solutions to Utah’s housing shortage and affordability crisis.

“The biggest challenge remains, in my opinion, that there are many cities that are holding back the ability to build market-based solutions in their cities,” said Wilson, R. Kaiseville. “There is a demand for products and types of housing in their cities, and the cities do not allow them to be built.”

On Wednesday, Wilson also voiced support for the proposal that was brought to the Unified Economic Opportunity Committee by the right-wing legislator, House Majority Leader Mike Schultz, R-Hooper.

The proposal would be to create “limited infrastructure zones,” or a tool to allow landowners to form a zone (with the unanimous consent of all landowners) to obtain public infrastructure funding for projects approved by cities. The debt issued to bondholders in such a district would be repaid at a one-time assessment on each property of no more than one-third of the final value of that property or property, and not a continuous levy on taxpayers or homeowners as in public infrastructure districts.

Ty McCutcheon, founder and director of the third development company, accompanied Schultz and helped explain the nuances of the proposed legislation, which is still being drafted. He said the aim is to help develop real estate that currently lacks expensive infrastructure such as water, sewage and roads.

McCutcheon said there are “tens of thousands of eligible lots across the state, specifically in high-growth areas of the state, that haven’t been built on. As we dig deeper into that, we realize that one of the main reasons is there are thousands of those lots that don’t Enough infrastructure to be really buildable today.”

“The goal is to open up those areas, to make that much space buildable today, so we can reduce the housing gap,” he said.

Creating limited infrastructure zones, McCutcheon said, “pushes the (infrastructure) burden onto the development community,” while creating “a mechanism to make that happen.”

He said the proposal would not enable these areas to have land use or zoning authority, but simply serve as a financing tool. “So this tool is not intended to get around those local controls,” McCutcheon said.

The goal is to help facilitate further development in order to better balance the Utah housing market by increasing supply. McCutcheon said states that face a “huge housing gap, like some areas of California,” are the least successful in providing low-income housing, while in others, like Texas, that are closer to a “housing balance” it is a “much” easier effort to provide. housing for those low-income families.”

“Our view is that we can get the public balance to come close to achieving equilibrium, and it will make our efforts to house the most vulnerable easier, because the lag between what the market can offer and what public entities must invest in is shrinking,” he said.

Wilson applauded the proposal. He has personal experience in his development work with the challenges of developing lots that lack public infrastructure.

“One of the biggest challenges, because I’ve had that, (and) I know developers who are a lot bigger than I was going through, is they’ve got a lot of them but they can’t get the infrastructure without some kind of tools,” Wilson said. “So if we’re serious about fixing All these problems really…we can’t just focus on getting a lot of rights. We have to work on the whole delivery mechanism.”

Wilson called it “a very important issue” and called on the Unified Economic Opportunity Committee to recommend the proposal and encourage the Utah legislature to hear and discuss the concept. The committee voted to approve his proposal.

Schultz said it was a “much needed improvement.”

“It’s sad to see what’s happening now,” Schultz said. “We’re forcing our kids into apartments, our grandkids. … So this helps make the American dream of home ownership come true.”

Gov. Spencer Cox, who serves as chair of the Consolidated Economic Opportunity Committee, said he “couldn’t agree to this more than that. I’m very excited and you have our full support.”

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