Arguing that Utah’s referendum law has been “weaponized” against housing developments, a Utah lawmaker is pushing a bill to block voters from challenging local legislative land-use decisions if they’re approved with a supermajority vote.

That bill, SB199, cleared its first legislative hurdle Monday, then received initial approval from the full Senate on Tuesday on a 18-6 vote. It would need another affirmative vote in the Senate before heading to the House.

“I’m hesitant to say we are like California, but we are weaponizing the process,” the bill’s sponsor, Sen. Mike McKell, R-Spanish Fork, told the Senate Economic Development and Workforces Services Committee during the bill’s first public hearing.

“What’s happening across the state is the referendum process is being weaponized to hurt developers and cities as they plan for the future, as they promote projects,” McKell said. “We are a republic for a reason. We are a representative government. I think the initiative process, the referendum process always deserves a closer look.”

Utah, one of the fastest growing states in the nation, has been forced to reckon with growing pains as both its homegrown population and in-migration have put pressure on its already straining housing supply. Even though Utah leads the county in 2021 for homebuilding, it’s still facing a roughly 31,000-unit shortage.

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Meanwhile, Utah’s housing affordability crisis has sharpened to unprecedented levels, especially over the last two years as the pandemic housing frenzy ravaged the West. In Utah, the median single-family home price in Salt Lake County increased a staggering 63% since the start of the pandemic, up from $400,000 in March 2020 to over $650,000 in May 2022, according to the Salt Lake Board of Realtors.

As the national housing market now undergoes a correction, housing prices in Utah have started to dip, but housing experts expect Utah’s housing affordability crisis to persist, not predicting a dramatic enough price correction to erase the dramatic price gains seen since 2020. Even before the housing market went wild, Utah was facing steady price gains due to its stubborn housing shortage.

In recent years, as Utah has grappled with its growth and housing pressures, there’s also been several communities that have pushed back on controversial housing developments by attempting to challenge them through Utah’s referendum process.

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What would SB199 do?

Currently, state law allows citizens the power to challenge local legislative land-use decisions if they gather enough signatures to force the question onto the ballot.

However, through SB199, McKell wants to restrict that ability by applying to local legislative land-use decisions the same standard the Legislature has when it comes to what is or isn’t eligible for a referendum challenge. Currently, if the Legislature makes a decision with support of a supermajority, or a two-thirds vote, then that decision isn’t eligible for a referendum.

If SB199 becomes law, it would specify land-use decisions by local legislative bodies, such as city councils, would be immune to referendum challenges if they’re approved with a supermajority vote.

“We have an affordable housing issue in this state, and it’s going to be really difficult to address and tackle affordable housing if we don’t respect the private property rights and those that choose to move forward with projects,” McKell said.

McKell’s bill comes as Utah Republican legislative leaders, as well as Gov. Spencer Cox, have pledged to prioritize addressing housing issues during the Utah Legislature’s 2023 general session now underway. They’re favoring a free market approach while supporting policy changes to cut down on regulatory barriers.

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Cox, while unveiling his budget proposal, also said the referendum process can impede housing solutions because, in some instances, small groups of people can shut down any type of development.

“Everyone wants more affordable housing for their kids and grandkids but they want it to go where they can’t see it,” Cox said at the time.

Would this ‘cripple’ development detractors?

Officials from McKell’s home city of Spanish Fork came to Monday’s committee hearing to support the bill. But so did at least one resident, Jackie Larson, who described herself as a wife of a sixth-generation farmer who also helped organize and sponsor a referendum on a recent Spanish Fork development decision.

Larson spoke against McKell’s bill, saying it would further restrict an already difficult process and remove constitutional rights.

“Exercising this right that is guaranteed under the Utah Constitution should be made easier for the people, not harder,” she said.

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Larson was among several Spanish Fork residents who sponsored the referendum that sought to challenge the city’s decision to rezone a property for a project known as Modera, located in the area of 2000 West and 1900 South, from rural residential to commercial and residential for a 668-unit housing development. The referendum was ultimately unsuccessful. In August, it was deemed insufficient, with its sponsors unable to gather enough signatures to refer it to the ballot.

“What several of us experienced during that referendum (process) was ugly,” Larson said.

She said those involved with the housing development tried “to stop us from reaching our community. They tried bribing businesses, we experienced harassment, intimidation, threats and voters were afraid of retaliation.”

“The laws in Utah for land-use referendum are wildly difficult as it is. But what was allowed to myself and others shouldn’t be allowed to happen to anybody else,” Larson said, urging lawmakers to address those issues instead of trying to “cripple the citizens’ ability to effect change.”

“This can’t continue to happen to our citizens who are trying to practice their constitutional rights,” she said. “Instead of impeding our rights as voters, I’d ask you instead address these areas that would protect people in Utah.”

City Councils are ‘voice of the people’

Spanish Fork Mayor Mike Mendenhall and city manager Seth Perrins spoke in support of McKell’s bill, arguing cities have faced challenges while trying to respond to growth pressures and balancing private property rights with neighborhood concerns.

“If you ask our citizens, yeah, their No. 1 concern ... is growth,” Mendenhall said. He said Spanish Fork is “certainly proud” of its agricultural heritage, “but we also lean into progress. So those that want to develop their private property will have a chance to do that.”

Mendenhall argued McKell’s bill will help balance those rights, noting cities offer plenty of public hearing opportunities for housing developments as well as general plans. If the “vast majority” of a city council, made up of elected officials, makes a decision, “that’s the voice of the people. That is truly the constitutional process.”

Perrins said planning for growth is one of the “major responsibilities” of a city. However, when a housing project faces a referendum, “it creates uncertainty in that development process and it creates challenges for the community at large.”

Perrins argued land-use decisions often take city councils months, if not years. He also noted voters already have the opportunity to to “refer” elected officials to the ballot each election year.

“If there is a supermajority (decision) ... we believe that speaks very loudly for the decision.”

Cameron Diehl, executive director the Utah League of Cities and Towns, said the league hadn’t taken a position on the bill as of Monday.

“At city hall, there’s always a push and pull when it comes to planning for your community. We are constantly at city hall trying to balance the needs of today’s residents and tomorrow’s residents. And when we get it wrong, the voters can either refer a land use (decision) or they can make a separate choice at the ballot box every couple of years during the election cycle.”

Before the Senate committee cast its vote on SB199, Sen. Karen Kwan, D-Murray, argued against the bill, calling it “a little heavy handed.”

“Categorically, I oppose any limits on referendums,” she said. “It’s not an easy process to go through, and many residents feel this is their only way to get their voice heard, which I know is not true because there are many processes. But to go through the process of a referendum, it takes time, energy and money. That commitment really needs to be honored.”

Kwan was the only member of the committee to vote against the bill, which passed 4-1.

On the Senate floor, both Republican and Democratic senators grappled with the bill, some saying they were torn by the issue. They recognized it aims to help increase the state’s housing supply, but they also had heartburn with restricting referendum powers of voters.

Sen. Nate Blouin, D-Salt Lake City, asked McKell if he’d be open to amending the bill in the future to raise the threshold to a unanimous local legislative vote rather than a supermajority.

“I’d be happy to consider that,” McKell said. “What I want to do is make sure we really address this issue and give some deference to our local authorities. It’s not easy to make some of these tough decisions ... but I’m certainly open to having that discussion.

Blouin voted in favor of the bill, telling McKell he’d like to keep working with him and “find some middle ground.”

The bill now faces one more vote in the Senate before potentially going to the House for consideration.