In an effort to help tackle what Gov. Spencer Cox calls the No. 1 issue facing Utah — the state’s increasingly unaffordable housing market — two Utah-based foundations are joining forces to build about 900 income-restricted rental units in seven different cities on and off the Wasatch Front.
Charitable foundations created by Utah’s largest homebuilder, Ivory Homes, and FJ Management (a holding company with a portfolio that includes Maverik, Crystal Inn Hotel and Suites, Big West Oil and WellQuest) announced a new partnership at a news conference in Salt Lake City on Tuesday, meant to fund construction of apartments, townhomes and condominiums to help house low-income families that make 35% to 80% of the area median income.
The partnership, deemed Housing for Impact, has seven projects in the works in Salt Lake City, South Jordan, Draper, Lehi, Magna, Francis and Park City. Some are further along in the planning process than others, but the foundations aim to make about 900 housing units available in the next several years. They’ll be rent-subsidized units (unless the foundations make a future deal with other parties to contribute an amount to turn them for sale at an affordable rate).
“We’re hoping there will be many more housing units in the years to come,” said Abby Ivory, president of Ivory Innovations, a nonprofit based at the University of Utah devoted to fostering innovative affordable housing solutions. “This is just the first three years, and we’re just getting started.”
The governor, along with dozens of city and county leaders and housing advocates, attended the announcement at the old Liberty Wells Center, 707 S. 400 East in Salt Lake City, which was donated to the foundations by The Church of Jesus Christ of Latter-day Saints. The Housing for Impact partnership is slated to turn the former gym into 30 apartments and 36 townhomes.
Cox and the foundation’s leaders applauded the Housing for Impact effort and called for more public-private partnerships to solve Utah’s housing problem, which is on track to worsen as the state’s housing shortage is projected to grow to over 37,000 units by 2024.
Utah is now facing its least affordable housing market in history, researchers at the University of Utah’s Kem C. Gardner Policy Institute recently said with the release of the “State of the State’s Housing Market” report last week.
“I get asked routinely what are the things that worry me the most about the state of Utah, what are the things that keep me up at night,” Cox said. “I never hesitate to give the answer. Always, always, always, the No. 1 thing that I worry about in our state is the price of housing right now.”
The state’s water availability is now a close second, he said, but when an estimated “77% of your state can’t afford the price of housing today, we know that something has gone wrong,” Cox said.
With home prices sticking stubbornly high amid the state’s low housing availability despite mortgage rates now hovering over 7%, researchers at the Gardner Institute have estimated over three-quarters of Utahns have been priced out of the state’s median priced home.
“We understand that this is supply and demand,” Cox said, noting Utah is among the fastest growing states in the U.S. “With that additional growth comes a need for additional housing.”
More supply and innovation from public and private partnerships can help meet that demand, he said.
“Here’s the thing, this is not something government alone can solve and it’s not something the private sector alone can solve. It’s going to take all of us working in concert to do more housing, better housing,” Cox said.
Yes, 900 units may seem like a drop in the bucket in comparison to Utah’s daunting 37,000-unit housing shortage and its accompanying affordability issues, Cox acknowledged to the Deseret News after Tuesday’s press conference, “but you need drops in the bucket to fill the bucket, that’s how it works.”
“So this is just many, many projects that we’re working on right now, but it’s a really important one,” Cox said. “That’s the thing, if we can scale what they’re doing and inspire others to get involved, I think we can really start to make a dent in this issue.”
Clark Ivory, CEO of Ivory Homes, and Crystal Maggelet, CEO of FJ Management who also leads the company’s foundation Call To Action, said they will be pooling resources to “form what we hope will be a very long lasting partnership where we can add many, many affordable units to our wonderful state.”
Call to Action and Ivory Homes aspire to create upward of $1 billion in housing investment, not planning to stop at 900 units. Clark Ivory said the two foundations are expecting to split investments 50-50.
“Over the next several years, we’ll put tens of millions of dollars of equity (into projects),” Clark Ivory told reporters. “It’s substantial. And then of course we have financing on top of that. So what we’d love to see over time is we’d love to produce a billion dollars worth of affordable housing in the next few years and then take it from there.”
“Our aspirations is to build not just 1,000 units ... but maybe even 10,000 and beyond,” Clark Ivory said.
Clark Ivory credited some cities for being great partners when it comes to offering more affordable housing stock, but he also needled others that “need to get with it.” He declined to name names, though.
Maggelet said Utah’s housing affordability issues sharpened personally for her several years back when her company conducted a survey of its hourly employees “because we wanted to see what their needs were.”
“I thought certainly education or child care are going to be (at the) top of their list. I was very surprised when the top of their list was food and housing,” she said. “I was blown away, honestly. It made me very sad.”
Wage growth has not kept pace with housing costs, and addressing that gap is “the best way we can help childhood poverty and economic upward mobility,” she added.
Utah has lost an estimated 41% of its affordable units since 2011, Maggelet said. “That is almost double what California and New York have lost in affordable units in the same amount of time. This is definitely an issue.”
Last year, when Call to Action was formed, Maggelet said they spent an initial $8 million to buy 400 units. This year, they’ll spend another $23 million to buy additional units for preservation. They wanted to do more, so she said they decided to partner with Ivory Innovations.
“Clark had me at one call,” she said. “I knew that this was going to be a partnership where we could do a lot more, much quicker.”
Here are the details (so far) on Housing for Impact’s projects. More details on projects in Park City, Draper and South Jordan are still taking shape.
- Liberty Wells, Salt Lake City: 36 townhomes, 30 apartments.
- Holbrook Farms, Lehi: 240 residential units with one-, two- and three-bedroom floor plans with a neighborhood park, clubhouse and tutoring center.
- Francis Commons, Francis, Summit County: 12 apartments with one-, two- and three-bedroom floor plans, 16 two-bedroom townhomes with a neighborhood park.
- Mahogany Ridge, Magna: 300 affordable townhomes with two- and three-bedroom floor plans with multiple neighborhood parks.
- Senior housing in South Jordan: 138 senior apartments with a senior center.
- Park City Heights, Park City: About 15 townhomes, more details coming.
- Vista Station, Draper: About 186 apartment units that would be the state’s first ever high-rise modular building, built using off-site construction, more details coming.
