Is Utah too developer friendly? No, Gov. Cox says. ‘We need development. There is no other way’
Housing market needs more supply to solve affordability crisis, so Utah leaders looking to break down barriers for development
Along with safeguarding water for the Great Salt Lake, upping teacher pay and providing significant tax cuts for Utahns this year, Utah Gov. Spencer Cox also has his eyes set on an issue that has sharpened, especially over the past two years, as the West became ground zero for the pandemic housing frenzy.
“Lowering the price of housing,” Cox, a Republican, told the Deseret News in an interview Thursday.
It’s a priority that the governor also shares with GOP legislative leaders as they gear up for the Utah Legislature’s 2023 general session set to begin Tuesday.
As conservatives, they’re emphasizing a free market approach, along with more investments in affordable housing initiatives.
What should Utah do about its housing crisis?
Last year, lawmakers didn’t fully fund the $128 million Cox recommended for homelessness and housing programs — but they did set aside a record amount, $70 million, after a $50 million investment in 2021.
This year, Cox is asking for $150 million for a variety of housing initiatives in his budget proposal, including $100 million in one-time funds for deeply affordable housing, saying his administration has proven it’s putting the money toward good use. But in addition to those investments, Cox also said lawmakers should focus their attention on getting government out of the way to help increase the state’s housing supply.
“The (housing) market forces are the most important,” Cox said during his budget proposal speech. “But government is skewing the market. The market is telling us we need more housing, but what’s holding that back, or was at least until we saw significant rate increases, is ... local governments.”
Cox, like legislative leaders, has thrown his support behind policy changes to help loosen controls around certain housing developments and more strongly incentivize (or force) cities to include moderate housing in their plans.
Utah needs policies that help make housing “cheaper and more available,” the governor said.
“Government plays a big role in that piece, in that we tend to make it harder. Every regulation that we put on building housing adds to the cost of housing,” whether it’s fees or drawn-out approval processes, he said. “And at any stage in the process, those can be derailed.”
On Wednesday, members of the governor’s Unified Economic Opportunity Commission expressed support for legislation that Sen. Lincoln Fillmore, R-South Jordan, is working on. It’s still being drafted, but Fillmore said the bill seeks to enact “big, bold policy solutions” aimed at increasing housing supply.
The bill, Fillmore said, would “streamline” city approval processes for subdivision plans by requiring only one public hearing at the beginning of the approval process. It would also seek to sharpen Utah’s teeth when it comes to punishing cities that haven’t included moderate income housing in their plans by withholding state money for road improvements known as Class B and C funds.
Cox expressed support for those proposals during the Unified Economic Opportunity Commission meeting, as well as to the Deseret News.
“We do believe in local control, and I believe that local government should be able to make those decisions,” Cox said in the interview. “But the process that they have in place now is untenable in some of our cities, not all of our cities. We’re working on trying to streamline that process and making it easier.”
Additionally, legislation is being crafted to create “limited infrastructure districts,” a tool to allow landowners to form a district (with unanimous consent of all landowners) to access financing for public infrastructure for projects that have been approved by cities. The aim would be to assist development of properties that currently lack expensive infrastructure such as water, sewer and roads.
“We have tens of thousands of lots that have already been approved for housing but no housing is being built there because there is no infrastructure,” Cox said.
“So if we can do those two things, I think then the market can drive down the price of housing as we increase supply.”
Is Utah too developer friendly?
Asked if Utah lawmakers are entertaining ideas that are too developer friendly, Cox pushed back vehemently, saying “we need development. Like, there is no other way.”
“I ask people that say that, ‘Then you come and tell me how to reduce the price of housing,’ because the only way anybody has been able to tell me is we have to increase supply,” Cox said. “I don’t know how you increase supply without making it easier for development to happen.”
Development, Cox said, “isn’t giving handouts to developers.” He said it’s “just building houses for people.”
“So yes, I want to be developer friendly. I want to be development friendly. I want to build more houses, and do whatever that takes.”
In 2022, as interest rates skyrocketed to over 6%, some days over 7%, housing researchers from the Kem C. Gardner Policy Institute estimated that more than 75% of Utahns couldn’t afford to purchase Utah’s median priced home.
Meanwhile, even though Utah was one of the leading states for homebuilding in 2021, the state still faces a housing shortage of an estimated 31,000 units, which is why housing experts predict Utah’s housing affordability crisis won’t go away even as the market corrects from runaway price increases over the last two years.
As economists predict the housing contraction to persist through 2023, Utah homebuilders are also expected to pull back drastically from the market.
“Developers are not developing,” Cox said. “So yes, the price of housing is maybe coming down artificially, when interest rates come back down we still won’t have houses for people, and the price is going to go right back up. So we have to be able to build those houses now and government can get out of the way to help make that happen.”
There’s also a pressing — but challenging — cultural issue facing Utahns when it comes to housing.
Not-in-my-backyard attitudes span across all political parties, and it’s something Utahns need to reckon with if they truly want housing to become more available and more affordable for not only themselves, but their kids and grandkids, Cox said.
“I have stories from the Avenues, and I have stories from Draper — I have stories on the right and the left — when it comes to NIMBYism. It is definitely a bipartisan problem,” Cox said. “But my message to people is, look, do you want your kids and grandkids to live here? And as we ask that question, the overwhelming majority of Utahns say yes. And the overwhelming majority of Utahns understand that means we’re going to have to build more housing.”
Cox acknowledged “there are better ways to do this than others. It doesn’t just mean that you throw up giant apartment buildings in every city and town in random places. That’s not what we’re talking about. We have to be smart about it.”
Higher density development needs to go “where we have the most infrastructure, and then we continue to invest in infrastructure so the quality of life stays high” to avoid traffic jams, he said.
Cox pointed to Farmington, the first city to get a certified station area plan, as an example of putting density where it makes sense.
“They’re doing more with density than just about anywhere else in the state,” he said. “It can be done. It really can be done.”