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Utah leaders making no promises for affordable housing money

Amid outcry over tax reform, legislative leaders make no commitments for long-sought affordable housing dollars

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Construction crews work on an affordable housing building at 500 West and 400 North in Salt Lake City on Friday, Jan. 24, 2020. The five-story building will have a total of 74 units including eight live/work spaces. The rest will be one-bedroom studios.

Ivy Ceballo, Deseret News

SALT LAKE CITY — A year ago, housing advocates hoped Utah’s Legislature would at last prioritize affordable housing and pump millions into initiatives to help address the state’s housing crunch.

But that didn’t pan out.

As lawmakers grappled with last year’s budget amid tax reform, they passed SB34 with new policies to push cities to zone and plan for affordable housing — but stripped it of its $24 million funding request.

That left housing advocates surprised and deflated after they had received assurances state leaders would be prioritizing affordable housing following years of efforts to fund and transform Utah’s homeless services system. They regrouped. Now they hope 2020 will be the year for affordable housing money, and this time they’re asking for even more: about $35 million.

But whether housing advocates get the money they’re asking for may be a long shot. And state leaders aren’t making any promises, reluctant to make any commitments as a citizens referendum threw Utah’s entire tax reform package into question. Just days away from the session, legislative leaders pledged to repeal the tax reform law amid the outcry, putting lawmakers in the same position as they were last year.

“I’m nervous,” Tara Rollins, executive director of the Utah Housing Coalition, said.

For too long state leaders haven’t prioritized funding for affordable housing, and each year the housing crisis worsens, Rollins said.

“It will be devastating to our state if we don’t get money for housing,” Rollins said, “because we’re going to see more people slipping away.”

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An affordable housing building under construction at 500 West and 400 North in Salt Lake City is pictured on Friday, Jan. 24, 2020. The five-story building will have a total of 74 units including eight live/work spaces. The rest will be one-bedroom studios.

Ivy Ceballo, Deseret News

Utah faces an estimated gap of roughly 54,000 housing units affecting a trifecta of markets, including new construction, rentals and existing homes. That gap is likely to grow until another economic downturn, according the Salt Lake Chamber’s Housing Gap Coalition.

“Of course” Utah could go another year without upping ongoing money for affordable housing, Rollins said, but “they’re going to pay for it on the back end” eventually as Utahns are impacted by worsening homelessness problems and other economic issues including unstable housing for children, which could have lifelong impact, she said.

Advocates hoped 2019 would be the year for affordable housing, but Rollins said “all the air was taken out of the legislative session” thanks to tax reform, and this year “we have just as much to lose.”

No promises

While legislative leaders lauded tax reform as a restructuring that would rebalance state funds while providing Utah taxpayers perhaps the “largest tax cut in the history of the state of Utah,” opposition groups mostly angered by the restored sales tax on food gathered signatures to force the new tax law to the ballot. After more than 150,000 signatures were turned in by last week’s referendum deadline, legislative leaders announced they would repeal the tax reform law.

House Speaker Brad Wilson, R-Kaysville, in an interview with the Deseret News before the announcement to repeal the tax law, said there’s “reason to be cautiously optimistic” for affordable housing funding this session.

“In the absence of tax reform, we could put put all of those programs in a lot of jeopardy,” Wilson said.

Wilson said he recently met with advocates to discuss affordable housing, noting it was also a priority last year but “there were still some things that needed to be worked out.” This year, budget issues could again throw a wrench into affordable housing funding, Wilson said, even though housing advocates and the state’s Commission on Housing Affordability have worked to refine the proposal.

“We will do our best, but I’m not making any promises on anything,” Wilson said.

House Majority Leader Francis Gibson, R-Mapleton, said the state’s general fund — which the tax reform package was meant to stabilize as Utah’s economy evolves — could have little to give for all types of priorities, including affordable housing.

Gibson said the issue of affordable housing is “all about dollars,” yet “ironically, everyone wants these dollars but no one wants to fix the general fund,” referring to outcry around tax reform.

Senate President Stuart Adams, R-Layton, said affordable housing is a “high priority,” but he’s also not making any early promises.

“If we have money, we’re going to try and fund it, but it’s unclear right now what general fund money we’re going to have,” Adams said.

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Construction crews work on an affordable housing building at 500 West and 400 North in Salt Lake City on Friday, Jan. 24, 2020. The five-story building will have a total of 74 units including eight live/work spaces. The rest will be one-bedroom studios.

Ivy Ceballo, Deseret News

Gov. Gary Herbert’s proposed budget includes $20 million for affordable housing — an encouraging signal of early support to Sen. Jake Anderegg, R-Lehi, and co-chairman of the state’s Commission on Housing Affordability that drafted the 2020 bill.

To Anderegg, $20 million is a “significant possibility” for 2020, but he’s also expecting challenges.

“I hope that we get $35 million,” Anderegg said. “What I expect is that getting especially ongoing money is going to be hard to get.”

Anderegg’s bill includes a roughly $20 million one-time appropriation to the Olene Walker Housing Loan Fund and a $15 million ongoing appropriation to the Department of Workforce Services Housing and Community Development, all to be used for affordable housing programs or loans to develop moderate-income housing.

The governor, even though his budget proposal includes the $5 million ongoing and $15 million one-time funding for affordable housing, also wouldn’t make any early promises for the money in a recent interview with the Deseret News, saying “there’s no guarantees about much in life.”

“We actually balance our budget and we don’t spend more than we take in,” Herbert said.

But the governor also noted affordable housing is a priority because it’s a “certainly an emerging issue.” But it’s likely an issue that will require tackling from all angles, not just with money, but also local zoning, he said.

“Clearly the market is wanting it. Why is it not getting it?” Herbert said. “I think government is part of the hurdle.”

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Construction crews work on an affordable housing building at 500 West and 400 North in Salt Lake City is pictured on Friday, Jan. 24, 2020. The five-story building will have a total of 74 units including eight live/work spaces. The rest will be one-bedroom studios.

Ivy Ceballo, Deseret News

Money won’t solve it all

Chris Parker, executive director of Giv Group, a nonprofit that has built affordable housing projects in Salt Lake City, said an additional $35 million for the Olene Walker Housing Loan Fund could have a significant impact on affordable housing development across the state since financial assistance or low-interest loans can oftentimes mean “the difference between a project breaking ground or not.”

But at the same time, Parker said there’s many different factors making affordable housing difficult to develop, from local zoning ordinances and NIMBY attitudes resistant to high-density development, to climbing construction and material costs as Utah’s housing market booms.

“Housing is a big problem,” Parker said. “That amount of money would certainly produce a sizable amount of units. Would that solve the problem? No we need additional measures to tackle this problem fully.”

Last year’s bill, though it was stripped of every dollar, still enacted new policies on cities, leveraging eligibility for about $700 million of state transportation dollars on whether city officials plan and zone for affordable housing.

That was a “critical” win for affordable housing last year, Anderegg said at the time. This year’s legislation may contain some “small changes” to that policy, but “nothing substantive.”

Parker said there’s more that can be done on the local level to make policies to encourage affordable housing, and that’s likely a yearslong effort that will need developers and cities alike to get creative about how they build, fund and zone for affordable housing. He also said leaders need to find a way to reduce construction costs “so we can build at a price point families can afford, and that’s a pretty hard thing to do.”

In the span of less than three years, Parker said land costs for one of Giv Group’s west-side Salt Lake City projects have doubled, from $1 million an acre the first year, to $2 million an acre just 2 1/2 years later.

“We’re in the most sustained housing boom in my lifetime,” Parker said. “It’s almost impossible in today’s construction market to try to build anything affordable.”

It may also take a culture shift — away from the single family model to a more “communal” way of living — to find creative solutions, Parker said.

While those are longer term possibilities that must be explored, funding for Utah’s existing affordable housing programs must be maintained as those other solutions are explored, Parker said.

“With this money, more Utah families will have homes,” he said. “I would love to see more creativity for what that money will be used on in the future.”

Aside from the big-ticket bill lobbying for funding, other legislation will seek ways to make Utah housing more affordable.

Rep. Jen Dailey-Provost, D-Salt Lake City, is sponsoring a bill to repeal restrictions on cities and counties from enacting a rent control ordinance on private property.

Pamela Atkinson, a prominent local homelessness advocate who has helped lobby for affordable housing money, said she hopes Utah legislators will prioritize affordable housing this year because “it will make a huge difference to so many people’s lives.”

Atkinson also said she’s been given “fervent promises” and commitments from legislative leaders that the funding will be coming in 2020.

“I believe it will have a priority because I believe leadership that are saying, ‘We will fund you next year,’” she said. “And we will of course hold them to that commitment.”

The 2020 Legislature kicks off at 10 a.m. Monday. Watch for updates throughout the 45-day session at deseret.com.