Regulatory Barriers to Affordable Housing Task Force

said that he had looked at the issue more from the perspective of potential regulatory barriers and regulations that cities require developers to look at. He reviewed the following provisions:

    1.     Section 10-9-307- Requires that each city prepare a general plan provision for affordable housing.
    2.     Title 9, Part 12 - Housing Coordination and Planning Act.
    3.     Section 63-28-11 - Technical Assistance for Plan Development.
    4.     Section 11-36-202 - Impact Fee Exemption Provision for Affordable Housing.
    5.     Chapter 90(a), Title 63 - Constitutional Takings.
    6.     Section 58-56-12 - Manufactured Housing Construction Standards.
    7.     Section 10-9-106.5 - Manufactured Homes in Residential Subdivisions.
    
    Mr. Crane said the plan is required to have an estimate of one's existing supply of housing, an estimate of the needs for the next five years, a survey of total residential zoning, and an evaluation of how existing zone densities affect opportunities for moderate income housing. He highlighted techniques used to assist municipalities in putting their general plans in place. Mr. Crane indicated the Legislature's view is that assistance is needed to accomplish it. Until January 31, 1997 under the act within the appropriations from the Legislature, the department is designed to give assistants to establish programs to municipalities in accomplishing the purposes of §10- 903-7.

    Mr. Michael Johnson, Division of Community Development, Department of Economic Development, expressed that housing costs have escalated over the past five years and in some areas 100 percent. Utah has a vacancy rate of two to five percent affordable housing. The vacancy rate at times is lower than that. Mr. Johnson said the Olene Walker Housing Trust Fund and the Department of Community and Economic Development have been able to make progress in providing affordable housing for a wide group of individuals in the state. He said is the goal of the governor to capitalize the trust fund at one hundred million dollars so the fund will be self-sustaining. Mr. Johnson then explained the intent of the trust fund and discussed the fund's expenditures and how they are allocated.

    Sen. Montgomery asked Mr. Johnson if there is an active process in which downtown residential areas would be rehabilitated where the individual affordable housing concept might be utilized? Mr. Johnson indicated that there are areas where old structures are torn down and new structures are built.

    Ms. Sherie Brinkerhoff, Housing Program Specialist, discussed several projects in targeted areas. She said the Neighborhood Housing Services in Salt Lake City targets a specific area in the community. Most of the money from the trust fund for the single family homes is generated through either the Housing Authority or the Association of Governments. Ms. Brinkerhoff said Salt Lake City and Ogden have good rehabilitation programs and added that the department does not participate in those loan pools. She said the Olene Walker Trust Fund reaches many families

throughout the state that banks have not been able to reach.

    Sen. Montgomery said the concept of a redevelopment agency for homes is realistic and could work and be the way to obtain affordable housing on a volume bases in downtown areas.

    Mr. Ray Walker, Community Development Block Grant Program Manager, Department of Community and Economic Development, stated that he had been given the responsibility of implementing H.B. 295, "Providing Affordable Housing" and to come up with a program regarding the fiscal note attached in the amount of $250,000. Responding to Sen. Montgomery's comment, Mr. Walker agreed that the concept of a redevelopment agency being used for homes is realistic and should be considered.
    
    Representative Harper indicated that, currently, the state statute does allow redevelopment agencies to pull money out of the fund and use it for housing projects. There are several municipalities and redevelopment agencies in the state that are using funds from the tax increment toward renovation, rehabilitation, and affordable housing units. Most communities in Salt Lake County do not have their own housing rehabilitation program, staff, or expertise, therefore, they contract with Salt Lake County to do rehabilitation with Community Development Block Grant (CDBG) monies which are done on a case by case basis.

    Mr. Walker discussed the implementation of H.B. 295. He said meetings were conducted throughout the state with the intent of finding out how the department could facilitate and assist communities in developing the plan. Mr. Walker explained the Consolidated Plan.

    Mr. Nixon discussed the area of liability levied on those individuals that are required to inspect and approve plans. Because of the liability pertaining to inspectors, architects, and engineers, it has become an expensive issue in the building of homes. He expressed the need to look at this issue.

3.     What is the extent of the problem? _ Mr. Steve Ericksen, Director, Utah Housing Technical Assistance Program, by request from the committee, presented data on the number of affordable housing units that are needed and the cost break-down of regulatory costs and costs in building a house. He discussed the Olene Walker Trust Fund and said one the issues has always been that the Legislature has been funding the pool of dollars out of surpluses. He indicated that we may not have that luxury in the 1998 General Session. It has been a continuing issue to obtain a stable funding source for affordable housing statewide. Mr. Ericksen said there may be legislation proposed dealing with the redevelopment agency's involvement with affordable housing. In California, he indicated that it is mandated that 20 percent of all tax increment funds derived from RDA projects go back into affordable housing development. He referred to a document put together by the State of Utah on the Consolidated Plan for Utah and informed the committee that most of the data he will be presenting came from this document. The document was distributed to those members of the committee that requested one. Mr. Erickson then reported

on some of the indicators from the Consolidated Plan:

     There were:
    87,000 unites occupied by renters paying more than 30 percent of income for rent;
    20,000 unites occupied by elderly renters paying more than 30 percent for rent;
    44,000 homeowners paying more than 30 percent of income for rent equaling
151,000 - TOTAL.

    For Utah Households earning less than 80 percent of AMI:
    100,000 housing unites statewide are substandard;
     31,000 units statewide are overcrowded.
    
    $550,000 million to address overcrowding and rehabilitation for rental unites.
    $350,000 million for low income homeowner rehabilitation.

    Other indicators were distributed to committee members.
    
    Mr. Steve Erickson indicated what the task force can do: 1) encourage better planning and pay for it; 2) support federal initiatives to fund housing; 3) put more state monies into it; 4) examine old codes and revise for the 21st century; 5) dump old codes; 6) obtain progressive alternatives; 7) craft responsible impact fees, local solutions, and funding sources; 8) fund fair housing; 9) discourage exclusionary zoning - if no mandates, then at least no funding; 10) preserve open space/wetlands with development tradeoffs for higher densities; 11) support housing as an economic development opportunity - stop looking at it as welfare; and 12) create a housing standing committee of the Legislature. Mr. Erickson stated that the Provo-Orem area was ranked as the ninth least affordable market in the United states and Salt Lake City was ranked twenty-first least affordable. He then discussed Utah's housing market, affordable housing facts, Utah's affordable housing crisis, and economic benefits of affordable housing, qualifying for loans, zoning issues, impact fees, and utilities were discussed as well.

    Committee discussion followed Mr. Steve Erickson's presentation.

     4.    Consensus on Focus of Task Force - Mr. Anderson discussed zoning, impact fees, improvements such as importing fill material after excavation, utility issues, and the cities responsibility to prepare a general plan for affordable housing.

    Mr. Crane indicated that the key is looking carefully at what we can do as a committee and the importance of educating people to the issues. He said, traditionally, there has been a distrust for development. The question is whether these issues need to be dealt with by legislation? We need the opportunity to do what the Legislature has asked us to do. Mr. Crane then expressed giving the legislation an opportunity to work.

    Mr. Nixon said as a laymen and perceiving responses he is getting from cities that he deals

with, the content and impact of the legislation controlling the cost of services, is being ignored. There is no good-faith-effort to adhere to the content of the legislation and no honest effort on the part of the League of Cities and Towns to try to adhere to the content of the legislation.

    Rep. Harper stated that the scope limits the task force to regulatory barriers. We do not have the latitude to address all the issues. We can not depriving individuals the opportunity to decide what community they must live in. He said he views the opportunity to provide affordable housing, identifying items of legislation that needs to be addressed, more funding for the Olene Walker Trust Fund, and working on processes that would work into Sen. Montgomery's statement.

    Chair Biglow expressed his concerns with the Legislature taking over the duties of cities and counties. Traditionally, cities have had the role of zoning; however, there are standards in place that have been accepted for zoning. Another concern is taking on the issue of lot size and taking away some of the responsibilities that have been placed on local officials. He agrees with the concept of not mandating.

    Sen. Montgomery said the task force's charge is to study regulatory barriers to affordable housing. There are several issues that the task force can accomplish, formulate, and recommendations for the Legislature to consider. He explained that as chairs of the task force we will report back to the Business, Labor, and Economic Development Inteim Committee and the Political Subdivisions Interim Committee. The task force can summarize the testimony and the consensus of the testimony that has been received. In the task force's recommendations, it can be noted that zoning is one of the regulatory barriers, make a recommendation as to legislation that could impact that issue, and draft legislation referable to regulatory barriers in the area of impact fees and zoning. He said his recommendation would be that we try as a task force to come up with some specific recommendations to the Legislature.

    Ms. Karma Hamilton, Key Bank, Mortgage Loan Officer, explained conventional and FHA standards.

    Mr. Nixon expressed that the task force needs to explore ways in helping people in getting a start in ownership rather than renting.

    Mr. Ron Thorne, a builder in Salt Lake City and President of the Home Builders Association of Utah, distributed a handout and discussed the raising costs of housing. He said he was requested at the previous meeting to prepare a document of items that raise the cost of housing. He noted that the items have nothing to do with the size of the home or lot. Totaling the items, he said they add up to approximately $20,000 that are put on builders and developers. He reviewed each item for committee members.

    Chair Biglow indicated that the committee needs to find out if an exception can be granted to develop a subdivision or an apartment complex where some of the requirements could be waved

to reduce costs.

5.     Discussion of Draft Resolution -

    Mr. William Erickson, Executive Director, Utah Housing Finance Agency, at the request of the task force, presented a draft resolution for consideration by the task force. Mr. Erickson reported that moving people into homes is the largest contributor of available rental units. The resolution directs both single family home ownership and rental units. Mr. Erickson said the easiest way for the task force to get a handle on the issues would be to analyze the rate at which housing costs have escalated over the last seven years as compared to what incomes did particularly in the lower income wage brackets. The resolution reflects the need to increase the amount of mortgage revenue bonds for the state. In summary, Mr. Ericksen indicated that 60 percent of all apartments being built in the state are being financed through the tax shelter program.

     MOTION: Mr. Moffit moved to accept the concept of the resolution as a recommendation from the task force. The motion passed unanimously.

6.     Planned Residential Unit Developments (PRUDs) -
    
    Mr. Dave Backman, Real Estate Developer and Mr. Steve McCutchen, Principal, Swaner Design Land Planner, addressed the committee. Mr. McCutchen distributed a handout from which he gave his presentation. Using a slide presentation, he explained specific projects, planned communities and their designs, and cost savings of the units.

        7.    National Corporate Builders' Role in Delivering Affordable Housing in the Utah Market -
    
    Mr. Brent Hall, Regional Director, Kaufman Broad, was unable to attend the meeting. Ms. Linda Fox attended the meeting in his place. She said in the last five years, the Utah housing market became large enough to warrant a number of companies to come into the Wasatch Front and start building what we would consider tract housing. She discussed some of the advantages those companies have.

    Chair Biglow indicated that the task force needs to decide on issues that have been raised, put those items on the agenda, and come to a consensus. Chair Biglow noted if members of the committee would like their issue given special consideration, they need to put it in writing.

8.    Future Meeting Dates - Tuesday, September 23, 9:00 a.m., Room 405.

9.    Adjourn - Rep. Anderson moved to adjourn the meeting at 12:00 p.m. The motion passed unanimously.