Why zoning is key to watch as Utah legislators tackle the issue of affordable housing
Ahead of the upcoming 2024 legislative session, Utah lawmakers have the ongoing housing crisis as a top of mind concern. A legislative audit report released late last year offered recommendations that may become key in the course of the session, which begins Tuesday.
Here’s a look back at that report as well as a look forward as to what key questions around housing to look at during the legislative session.
The Nov. 14, 2023, report forecasts that if two decades of inaction pass, parts of the Wasatch Front may run out of housing. High costs continue to price out the majority of renters. The shortage has worsened as Utah’s population grows, the report sates.
To curb the shortage and growing issue, the audit report listed five main recommendations: 1) a state-level strategic plan, 2) creation of a program to manage state-level housing production targets, 3) the Legislature finds ways to increase zoning density, 4) implement additional penalties and incentives related to housing targets to encourage local governments to comply, and 5) develop metrics around housing production.
Utah would need to build around 28,000 housing units per year — and the report indicates that additional housing units need to have higher density.
“While 2020-2022 saw Utah cities issue record numbers of building permits, cities that prefer single-family homes or low-density zoning can use their authority to stifle multifamily or high-density residential projects,” the audit report stated. “If statewide housing goals are created, housing policy research shows that incentives and penalties are needed to hold local leaders accountable to those goals.”
The audit reported that some cities “used their broad authority over land use and development to circumvent policy changes from the Legislature.” While the audit did not find sufficient evidence to say that cities made development difficulty, it stated “this finding does not necessarily mean that all cities are acting appropriately in terms of requirements and timeliness.”
No evidence was found of cities circumventing requirements and timeliness, the report concluded. After reviewing concerns, the auditors found instances where permits may have been delayed a day or two, but the report said that “the overwhelming majority of permits were reviewed within the time limits in statue.”
The report says that if cities want only single-family homes, it’s “a recipe for trouble.” It additionally states, “Most of the land in Utah’s largest cities is currently designated for single-family detached homes, which means certain areas could begin to run out of space for housing before 2050.”
The Utah League of Cities and Towns, which represents municipalities within the Beehive State, issued a letter responding to the report’s recommendation, which can also be found in the report.
The organization expressed concern over a statewide approach to zoning rather than a local approach, arguing that affordability could be impacted.
“Density does not always equate to more affordability or more affordable home ownership,” the report stated. “For example, cities have reported examples to the League of where they have zoned for smaller lots, but the market has produced large housing units on those small lots that are not affordable. Additionally, cities have also reported that some townhomes and small lot developments are turning into for-rent products and investor-owned inventory.”
In addition, the League of Cities and Towns mentioned worries over “benchmarks that are outside of governmental control to achieve.”
“For example, multiple Utah cities have zoned for unlimited density near transit stops but the market has only produced wood-framed podium-style apartment buildings due to the cost of building larger steel-framed buildings,” the report said “The wood-framed buildings are more profitable for developers to build and easier for developers to finance, but they do not maximize the planning and zoning opportunities available on that limited available land near transit.”
Gathering data from 66 cities across the Beehive State, the organization said that Utah’s local governments have also “zoned for and entitled more than 190,000 housing units for which building permits have not been requested.”
After the release of the audit report, Gov. Spencer Cox released his budget proposal for the fiscal year 2025, which treats housing as a core issue. The proposed budget has increasing the number of starter homes as one of its main goals.
“Building an additional 35,000 homes in the next five years is ambitious but the investments and incentives in the Utah First Homes program make this entirely doable,” Cox said. “Utah First Homes will correct a market failure in the housing space and create new opportunities leading to home ownership for our kids and grandkids.”
Related
Cox announced that former Rep. Steve Waldrip, who both homebuilders and the Utah League of Cities and Towns recommended, is the new housing innovation adviser. Basically, Waldrip’s full-time job will be to find a housing strategy to make homeownership and affordable homes a reality for Utah residents.
As the Legislature considers measures to make housing more affordable, there are a couple of things to look for: zoning and what legislators think of the governor’s budget and plan to tackle affordable housing.
The audit report mentioned that California’s local governments have to submit plans where they will rezone land. If the plans don’t account for their portion of the growth forecast, then penalties are prescribed. “We believe the Legislature may want to consider similar options to benchmark moderate-income housing plans to Utah’s official projects for household growth. Doing so could allow local governments the flexibility to accommodate their portion of Utah’s population growth as they see fit,” the report said. Bills that have to do with zoning for houses is something to watch as the Utah Legislature will grapple with how to best create affordable housing.
As for legislation that is public, HB135 is an example of a bill to watch to see how it turns out. It would repeal “provisions requiring certain counties to submit a proposal to create a housing and transit reinvestment zone as a strategy for increasing moderate income housing.”
Jan. 26 is the last day to request bills or appropriations without floor approval, so there’s still time to watch to see what happens as the session unfolds.
