SALT LAKE CITY — With the cost of rental housing rising along the Wasatch Front, a local company is offering an alternative to the traditional housing stock, but not without concern from some and enthusiasm from others.

Last fall, the Salt Lake City Council approved an ordinance to allow permits for "accessory dwelling units" — sometimes called mother-in-law apartments. Beginning in April, Salt Lake City homeowners residing within designated parameters could place additional living space on their property.

In the wake of the new ordinance in the capital city and other nearby towns that are allowing such alternative housing, a Utah startup is trying to launch a "small but smart" tiny house movement with the Beehive State as its ground zero.

Dustin Haggett, founding partner with Modal Living, said the design concept came from what he described as a growing need that cities have for increased density housing at affordable prices.

"Rents are increasing and there is a huge need for more housing stock and more density within the cities," Haggett said. "We have a large amount of people who can't afford to live in Salt Lake City and have to commute back and forth to work each day."

He attributed the increasing demand for less expensive housing to his company's idea to fill the need for affordable housing units.

Headquartered in downtown Salt Lake City, Modal Living builds “small but smart” accessory dwelling units, specifically designed for a minimalist lifestyle using sustainable materials that provide a functional and comfortable space for occupants. Built off-site and then installed on-property, the prefabricated units are more economical than traditional construction, he said.

They can be used as a studio, mother-in-law apartment, extra residential space or as an income property, he said. The property owner is required to reside on the property — either in the accessory unit or the main home, according to the city ordinance.

Haggett said the modular accessory homes are meant to be one-bedroom, one-bathroom, 432-square-foot stand-alone structures that can be moved into a landowner's existing yard space. The company's modular building technology is an economically efficient alternative to traditional construction methods, he said.

The Modal 01 unit is currently on display at City Creek Center food court.

Prior to a vote by the Salt Lake City Council last fall, there were only 25 permits issued for the purpose of accessory units. In October, zoning requirements were updated to allow for new, smaller dwellings across various residential neighborhoods, including Rose Park, Liberty Wells, Sugar House and other areas along the East Bench.

Modal focuses on providing high-end design and quality products at an affordable price, Haggett said. Through modern architecture and creative built-in storage solutions, the Modal 01 maximizes every inch of space without compromising a resident's quality of living, he added.

Haggett said the company arranges for all building permits and utility connections.

The units are built off-site, then delivered and installed in a matter of days, he explained. The company offers three financing options for property owners considering an affordable accessory unit. The price for the unit ranges from $95,000 for the basic set up to $120,000 for an all-inclusive, turnkey unit, he said.

"Our customers can see this as a long-term cash flow opportunity," Haggett said.

Modal will be selling nationwide, providing a turnkey solution starting in Utah, he said. Homeowners in the numerous cities have been approved for accessory dwelling units, including Bountiful, Layton, Midvale, Moab, Murray, Ogden, Salt Lake City and South Jordan, he added.

One of those homeowners is Sugar House resident Kelly Murphy, who is excited about the prospect of having a Modal unit on his property. He said his family doesn't use the space in their backyard much, preferring instead to socialize more with friends and neighbors in the front of the house.

"For the backyard, we were looking for a solution that would have something like a mother-in-law (unit) because parents live out of state and are getting a little older and travel here (a lot)," he explained. "We also have a lot of friends who travel here and stay with us."

He said having the extra space would be "really appealing." He also noted that "having the freedom to use it any way we want," possibly as a rental or vacation rental, was among the many options that would be available with the new self-contained living space.

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His current house has about 1,400 square feet of living space, and the new space would add to the property's liveability without making things more cramped, he said. The fact that the new space could be constructed and permitted through Modal Living was also a major selling point, he added.

"You've got a fully furnished place and they deal with all of (the building and administrative matters)," Murphy said. "So the cost seems really reasonable. Especially when you consider what it can do for property value and extra income."

He said the process seemed like very little hassle for the homeowner outside of the financial aspect. "It made a lot of sense," he said.

Murphy said his family would likely take out a second mortgage loan, but the expense would hopefully be worth the investment in the long run.

"It seems like a no-brainer for us," he said.

Meanwhile, attitudes about the proposed ordinance change spanned a wide spectrum, but the City Council eventually approved it.

"There has been some interest since we legalized this in October," said Salt Lake City Council Chairman Charlie Luke, who voted against the ordinance — though he agreed the ordinance did help with density. However, it could be detrimental as well, he noted.

"It also has the potential of having some pretty big impact in the neighborhoods," he said. "You're adding density without adding infrastructure."

He said the issue of housing density has been debated greatly of late. Though he had misgivings initially, he now supports the city's new policy despite those original reservations. "I hope I'm wrong," Luke said. "I hope the things that I was concerned about won't factor out."

Salt Lake City stopped permitting new mother-in-law apartments in 1995, but now they will be available to some interested property owners.

For interested property owners, Salt Lake City issued a handbook that provides general guidelines for those who want to add an accessory dwelling unit on a lot where a single-family home already exists. The handbook advises property owners to work with a city planner to answer any questions and coordinate their application.

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