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State Legislation Promotes Affordable Housing in Utah's High-Cost Rural Areas |
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An expanding economy and rapidly growing population are pushing up the cost of housing in rural Utah. Over the past 4 years, the state has seen the cost of housing, both rental and owner-occupied, rise more than 50 percent and rental vacancy rates drop to 4
percent or less. The affordable housing squeeze makes it difficult for many small communities to attract and keep teachers, police, and other important service workers. Worried that the problem could choke off Utah's spectacular economic growth, the state legislature has enacted a new law that requires local communities to undertake plans to address the housing needs of all population groups. Passed in 1996, Utah's Moderate Income Housing Law requires every municipality and county in the state to assess its affordable housing needs for the next 5 years. Under the law, communities develop a plan to meet the needs of their low- and moderate-income residents and adopt it as part of their general plan. In annual updates to the state, communities must include information on modifications made to their general plans and on progress made toward increasing affordable housing. (The measure carries no enforcement penalties.) There was some initial resistance to the planning law. Some communities saw it as an unfunded mandate, and they had a "bad image of what affordable housing was," according to Richard Walker, the state's senior housing program manager. Even so, as of January 2000, approximately one-third of the state's cities and counties had adopted an affordable housing plan. The state's community development division expects to see upward of 60 percent compliance when it conducts its annual survey again in 2001. Wasatch County's experience. Wasatch County was one of the first to implement a plan. In Wasatch—a small, scenic, rural, prosperous county located 40 minutes from Salt Lake City International Airport—the public is beginning to understand that a lack of affordable housing can deter economic growth. Wasatch attracts large numbers of new residents who can afford multimillion-dollar homes on 5-acre lots or what Wasatch County Housing Authority Director Robyn Pearson characterizes as "starter castles." The price of land and housing are skyrocketing, growing about 15 percent a year. When businesses ran into substantial wage inflation and an acute shortage of skilled workers for critical jobs, Wasatch County leaders became alarmed. "It was a real wakeup call," recalls Pearson, "when it took a new Wendy's 6 months to open its doors because it couldn't find the people to staff it." Pearson says the county has seen all of its basic community services such as schools, hospitals, law enforcement, and banks suffer because "moderate-income folks can't afford to live here." Utah's affordable housing planning law provided Wasatch County with an opportunity to educate its residents about affordable housing and to re- assess its zoning laws. A small state demonstration grant allowed the county to hire a consultant and analyze its current housing stock. Wasatch included both incorporated and unincorporated areas in its planning process, something many other Utah counties did not do. The reason is that Wasatch communities are "contiguous," says Pearson, which "demands that we have an affordable housing program that's seamless and offers no partiality from one small rural community to the next within the county." The county's number-one roadblock was community misperception about affordable housing. "Our job became explaining that affordable housing didn't have to be cheap housing. It didn't have to be deplorable housing. It could be quality housing." Pearson and his consultants traveled around the county, making slide presentations and going on site visits to convince local elected officials that positive solutions that they could apply existed. Through this process, the county developed a plan in keeping with its conservative outlook. The plan relies on the private sector to be the supplier of housing, provides incentives for first-time homeownership in preference to rent subsidies, and prohibits the public housing authority from owning or developing housing itself. Wasatch County requires that any major new housing development include an affordable component. Developers, however, have the option of placing cash into a new countywide housing trust fund in lieu of building affordable housing on their sites. The housing authority then acts as an agent to ensure that the "fee-in-lieu" supports the production of affordable housing in another location. The county relies on a variety of incentives and strategies: promoting the rehabilitation of older homes, infill development, density bonuses, interest buydowns, and downpayment assistance programs. "In all, the state bill has helped us take a more active approach to responding to affordable housing needs," says Pearson. State resources. Utah has a number of financial and technical assistance resources to help communities address affordable housing needs. One of the largest is the $42 million Olene Walker Trust Fund, made up of state and federal funds that assist in the construction, rehabilitation, and purchase of affordable multifamily and single-family housing throughout the state. Operating as a revolving loan fund, the Walker Trust supplies capital to qualifying homebuyers, builders, and developers. The state legislature has appropriated $1 million or more to the housing trust fund every year since its creation in 1992. A new state collaborative with the Enterprise Foundation helps build the organizational capacity of nonprofit community-based housing organizations, according to Walker. In its first year of operation, the collaborative provided technical assistance and awarded operating grants to each of the state's eight nonprofit housing developers. State efforts are helping to put rural residents in the driver's seat in re- sponding to development pressures, according to Phyllis McDonough Robinson, director of the Mountain- lands Community Housing Trust. Before the state planning requirements, rural communities did not have the expertise or confidence to negotiate with developers concerning community needs, Robinson explains. "Now, if they've gone through the planning process and used the manuals and tools developed by the state, their plan becomes almost an RFP for the development community." For more information, contact: Richard Walker, Utah Division of Community Development, 324 South State Street, Suite 500, Salt Lake City, UT 84114, (801) 538-8730. Or see: "State and Local Policies Tackle Utah's Shortage of Affordable Rural Housing," Rural Voices, Summer 2000, Housing Assistance Council, 1025 Vermont Avenue, NW., Suite 606, Washington, DC 20005, (202) 842-8600, www.ruralhome.org.
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