Want to rent out a basement or another part of your house? Here’s what happens in many Utah cities:
City officials may tell you they accept so-called “accessory dwelling units,” or mother-in-law apartments, but when you apply for a permit, you enter a twilight zone of regulations and rules. You may be told that your home isn’t set back far enough from the street, or that you need a separate ventilation system for the rental space, or that your basement rental can’t be as large as the floor above, or that you don’t have enough space for parking.
One young couple I know built a home in a Utah County city known for being rental-friendly. During construction, city inspectors signed off on the basement with a separate entrance, fully aware of the owner’s intentions. Then later, they denied a rental permit, saying the driveway inspectors had previously approved was too large.
Utah Rep. Ray Ward, R-Bountiful, has heard it all. He also has a basic philosophy concerning people who own houses. Cities “should not be telling them who else they can live with inside that space.”
Turns out that is a radical bit of conservative thought.
He has another philosophy. If Utah ever hopes to make up its current housing shortage, or to keep rents and home prices from accelerating faster than a SpaceX rocket, it needs to let more people rent out space.
Ward is sponsoring HB82, a bill that would remove all these restrictions where such rentals are allowed within houses, provided the homeowner lives there, too, and the rentals are long term, not overnight Airbnbs.
As he told me this week, the average number of people living in each house in Utah is trending downward as people age and fertility rates fall. A home that once housed a couple with six children may now house only a couple whose children have grown. Letting them rent space to four more people would be a cheap way to relieve some of the pressure for new housing.
Experts say Utah has a shortage of about 53,000 dwelling units. Meanwhile, Zillow reports that the median home price in Salt Lake County is $434,907, and that it rose 13.3% between December 2019 and December 2020. The website rentdata.org says a two-bedroom rental in the same county costs $1,176, more than 9% higher than a year ago.
The shortage and the rapidly rising prices are inextricably connected. To bring it down, Utah must let people find more places to live. “I just believe that supply and demand works,” Ward said.
A lot of city officials disagree. They are quick to remind people that they, not state lawmakers, were elected to make these decisions. At a legislative committee hearing last week, a city councilwoman in Bountiful, where Ward lives, said her city had evolved its rules for such rentals over time. Each step was hard fought, she said, adding that it’s better for cities to struggle with these issues than to have lawmakers tell them what to do.
Without some imposition from the state, Utah cities will continue hacking away at in-house rentals with nitpicking rules, and housing costs will keep rising.
Ward’s comeback is that cities hear only from the people who already live within their borders. These are the ones who shake clenched fists and make noise. They never hear from the people who would welcome the chance to live in such a rental, because they haven’t arrived yet.
The state, he said, has an interest in both groups.
He also rejects the idea that in-home rentals ruin neighborhoods.
“Homeowners don’t want to live in a slum,” he said. “In general, I just can’t see they want things to be miserable.”
It’s easy to prove this. The dirty little secret is that many people already rent parts of the houses out without permits.
Ward is on the right track. Without some imposition from the state, Utah cities will continue hacking away at in-house rentals with nitpicking rules, and housing costs will keep rising.
On Friday, the House Business and Labor Committee decided to hold the bill while Ward tries to overcome opposition. Still he’s hopeful the bill’s primary purpose will survive.
As he told the committee, rising home prices in Utah are the equivalent of a tax hike that added $3,000 a year to the cost of living over the last five years.
“Would you like to vote for that?” he asked fellow lawmakers.
Unless lawmakers, homebuilders and cities find ways to quickly increase the housing stock — and removing barriers to in-home rentals is a great start — it can only get worse.