Cities, builders and state lawmakers collaborated on two bills that aim to remove barriers to affordable housing.

Housing Affordability Revisions, HB465, and Municipal Land Use Regulation Modifications, HB476, introduced by Rep. Stephen Whyte, R-Mapleton, would encourage market-based solutions to the state’s housing shortage during a tight budget year that has ruled out most attempts to address the issue through increased funding.

Both pieces of legislation passed out of their respective committees — HB476 on Tuesday and HB465 on Wednesday — and will now be placed on the calendar for a full House vote.

As co-chair of Utah’s commission on housing affordability, Whyte has taken the lead, along with fellow chair Sen. Lincoln Fillmore, R-South Jordan, in bringing stakeholders to the negotiating table to tackle what he calls “one of the state’s most serious, challenging and important issues.”

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His bill HB465 is the product of months of discussions between state departments, cities, counties, home builders, realtors and business leaders, Whyte told committee members on Wednesday after the bill passed 8-2.

“This bill aligns state resources, policies and tools around affordable home ownership and housing affordability with the desired outcome of increasing the supply of homeowner-occupied houses,” Whyte said.

As currently written, Whyte’s bill would give city redevelopment agencies the ability to help construct homes at 120% of area median income so these funds can be used to increase the supply of owner-occupied homes, not just small rental units.

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“It’s going to provide some flexibility for cities on how we use the RDA funds so that we can focus those dollars on owner-occupied units, which is an important piece of this overall puzzle,” said Cameron Diehl, the executive director of the Utah League of Cities and Towns.

The bill would also encourage state land authorities, including the School Institutional Trust Lands Administration, the Point of the Mountain State Land Authority and the Utah Inland Port Authority, to make increasing affordable housing part of their missions.

The bill originally included additional penalties for cities that failed to create moderate income housing plans. The provision, which would have cut off some state funding in cases of noncompliance, was removed after feedback from Rep. Candice Pierucci, R-Herriman.

While the affordable housing crisis won’t be fixed with a single bill, Mike Ostermiller, speaking on behalf of the Utah Association of Realtors, said HB465 is part of a package of bills this session “all of which are aimed at bringing about incremental, thoughtful change that we think will make a big difference, but at the same time, balance the interests of the municipalities and the interests of private property rights in a way that kind of works for everybody.”

Whyte’s housing bill is one of two currently available bills that emerged from the commission on housing affordability’s work over the interim period. The other is Fillmore’s bill, SB168, standardizing modular home building codes, which passed an initial Senate floor vote on Monday.

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Tackling housing shortages through regulations, not appropriations

The product of Utah’s land use task force, Whyte’s other housing-related bill, HB476, addresses regulatory reform and building approval processes.

The bill, which includes rules related to setback requirements and water-wise landscaping, is relevant to “the issue of housing affordability,” Whyte said, because it creates certainty for cities and builders in the planning process, reduces ambiguity in code and provides efficiency-optimizing measures for builders that, all together, facilitate “market-based solutions for our housing shortages.”

For example, the bill would remove a requirement that homebuilders complete sidewalks along an entire street before constructing homes. Instead, homebuilders will be given the flexibility to finish sidewalks only in front of completed homes, preventing them from needing to replace torn up sidewalk every time they construct a new house, and saving developers, and buyers, money in the process.

Chris Gamvroulas, president of Ivory Development and the Property Rights Coalition, supported the bill on behalf of Utah’s Home Builders Association. While developers would have liked for both of Whyte’s bills to go further in requiring cities to implement builder-friendly permitting processes, Gamvroulas said those he represents “believe in the process” of collaborating with local and state officials to strike a mutually beneficial outcome.

“This bill does a lot of things that will increase the speed of (administrative) applications,” Gamvroulas said.

Earlier this month, in response to questions about how the Legislature would work to increase affordable homes in the state without big spending increases, Utah House Speaker Mike Schultz, R-Hooper, told reporters that addressing the regulatory piece of the puzzle can be just as effective, and more long-lasting, than subsidizing construction or infrastructure costs.

“Refining what that approval process looks like and how can we streamline some of it is probably one of the best things that we can do,” Schultz said during a media availability.

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This approach is different than the one proposed by Utah Gov. Spencer Cox in December. Cox asked lawmakers to fund a $150 million Utah First Homes program to help the state build 35,000 starter homes by 2028.

The money would have been used to expand last year’s First-time Homebuyer Assistance Program, shore up the state infrastructure bank, as well as prop up other programs subsidizing home purchases and starter home innovation.

However, Cox’s proposals were based on the assumption that lawmakers would “change statute” to redirect money earmarked in 2023 for transportation and use it for housing programs, something state legislators are unwilling to do, according to Schultz.

“We don’t have the amount of money available to us that the governor had in his budget,” he said, later adding, “because those dollar amounts were dedicated already towards transportation.”

Schultz said funding expectations should be tamped down “across the whole budget” for this year’s legislative session. Lawmakers entered 2024 with revenues from the previous year falling $50 million short of projections, thanks to lower than expected income tax collections.