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Utah business giants launch $100M effort to preserve affordable housing

An affordable housing building under construction at 500 West and 400 North in Salt Lake City is pictured on Friday, Jan. 24, 2020. The three-story building will feature 21 units with three and four bedrooms.
An affordable housing building under construction at 500 West and 400 North in Salt Lake City is pictured on Friday, Jan. 24, 2020. The three-story building will feature 21 units with three and four bedrooms.
Ivy Ceballo, Deseret News

SALT LAKE CITY — While a bill seeking $35 million for affordable housing has yet to surpass its biggest obstacle at the Utah Legislature, developers and business leaders came together Monday to show they’re doing their part.

As part of that effort, they made the case for legislators to join them, saying they could turn $5 million of state money into $100 million for affordable housing.

“We can’t keep kicking the housing can down the road,” said Clark Ivory, CEO of Ivory Homes, one of Utah’s top home builders, at a news conference Monday on Utah’s Capitol Hill. “We’ve got to deal with it.”

A gang of Utah business giants, including the Clark and Christine Ivory Foundation, Intermountain Healthcare and Zions Bank, announced they will work with the Utah Nonprofit Housing Corporation to create the new Utah Housing Preservation Fund, a fund aimed at helping preserve Utah’s existing affordable housing so they aren’t bought and remodeled to be leased again at sky high prices.

Ivory said the need for preservation of Utah’s existing affordable housing stock became clear recently when his foundation tried to purchase about 200 units in downtown Salt Lake City for preservation, aiming to keep their rents at between $600 and $900 a month.

“We thought this was a huge opportunity,” Ivory said, but they were disappointed when a California investor upped their full-price offer by 5%.

“It’s hard to begrudge the sellers for not taking more money,” Ivory said, but they realized they needed more capital at their fingertips in order to make more competitive offers.

To stop more rental units from going from $800 a month to $1,800 a month and displacing families, Ivory said the Utah Housing Preservation Fund seeks to eventually grow to $100 million or more. The aim to to eventually preserve 500 to 800 affordable units.

The Ivory Foundation, Intermountain Healthcare, and Zions Bank announced a commitment of an initial $20 million for the first phase of the preservation fund, which Ivory said will seek to preserve roughly 100 of the state’s most affordable housing units. Later on, Ivory said stakeholders will actively seek public and private partners to grow the fund to “$100 million and beyond” by the end of 2020.

The units bought by the preservation fund will then be managed by the Utah Nonprofit Housing Corporation, which will also work with housing authorities, service providers and other organizations throughout the state to secure housing for low- and moderate-income Utahns.

To launch the fund, the Utah Nonprofit Housing Corporation is under contract to acquire 54 units of deeply affordable housing from Housing Connect, Salt Lake County’s housing authority. That will not just preserve that housing, Ivory said, but also allow Housing Connect to reinvest the proceeds of the purchase to generate more than 100 additional units for households earning below 30% of the area median income.

“So you can see how this has a cascading effect,” Ivory said. “We will be buying and protecting and preserving these units and give another nonprofit the opportunity to go and invest in new (units).”

Gail Miller, owner and chairwoman of the Larry H. Miller Group of Companies and a member of the Intermountain Healthcare Board of Trustees, painted a picture of why affordable housing has become the missing link in Salt Lake County’s new network of homeless resource centers.

“Think for a minute of living in a dorm with 21 beds, where you have a bunk bed that is your space. You have a plastic box you keep under your bed for your belongings,” Miller said. “And you have access to food, shelter training for job services with a person to help you navigate the system. But after you’ve done all of that, you still have no place to go.”

Miller said “we are doing a great job” with the new homeless resource centers, “but they’re only one part of the solution.”

“When we have people who are willing to provide that last critical step, which is housing, that makes the whole difference,” she said. “Everything that goes up to that point is important, but it’s lost if the housing opportunity is not there.”

A bill seeking $35 million in state money — $5 million of which would be used for this preservation fund — was given unanimous approval by a House committee Monday morning. But the bill’s sponsor, Sen. Jake Anderegg, R-Lehi, expects the real challenge to come on the House floor, where he plans to lobby for dollars as legislative leaders hash out the budget.

Following the collapse of tax reform to fix what legislators call a funding imbalance between education and general fund dollars, leaders have given no promises for affordable housing this year, even after last year’s bill was completely stripped of its fiscal note.

Still, Ivory urged legislators to commit to helping solve Utah’s housing “crisis.”

“We recognize that the budget is tight,” Ivory said, but he said that $5 million in state money would help stakeholders “leverage” it into the eventually $100 million fund that would have an “enormous impact” for affordable housing.

“We hope the Legislature will be bold and move forward, even in tough budgetary times,” Ivory said, “and do what we hope will help us solve this problem.”

Anderegg told the Deseret News after Monday’s news conference he “most definitely” expects the preservation fund will help leverage at least the $5 million ask in his bill.