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Affordable housing incentives bill awaits governor's signature


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SALT LAKE CITY — A bill designed to create more available affordable housing in Utah is awaiting Gov. Gary Herbert's signature after passing both houses of the state legislature with wide support.

HB36, introduced by Rep. Becky Edwards, R-North Salt Lake, incentivizes real estate developers and landlords by using loans and enhanced tax credits to better enable them to drop rent and leasing rates for tenants.

"This bill complements the efforts being done statewide, especially by cities and counties, to alleviate the homeless situation and is an important part of solving that problem," Edwards said this week.

The bill received wide support in committee hearings from several organizations that deal with affordable housing issues, including the Road Home, Habitat For Humanity, the Utah Apartment Association and Volunteers of America-Utah. Utah League of Cities and Towns, Utah Transit Authority and Utah Bankers Association have also publicly backed the bill.

Legislators OK'd a little more than $2 million in one-time funding to be distributed into a fund overseen by the state, that can be used issue loans to developers and landlords as an incentive to offer discounted rental and lease rates. Another $500,000 in one-time funding was set aside on behalf of a pilot program designed to assist landlords who accept low-income tenants who rely on the federal Housing Choice Vouchers Program.

Qualifying developers and landlords would also be given tax credits about three times higher than what they are receiving under current affordable housing legislation. Withheld revenue from those tax credits — a figure that is expected to fluctuate early on, but eventually settle on $1.4 million annually — would come from the state education fund.

"What we're hearing from people is they're interested in people going through this route," Edwards said last month about landlords who aspire to be of help tolow-income tenants. "(But they are) missing out on the income difference between (charging) the affordable rate and the market rate rent … so we've got to sort of make those folks whole."

Grant Whitaker, president of the independent state agency Utah Housing Corporation, said in a committee hearing in January that the bill would open up more opportunities for Utahns whose income is below the 60th percentile in their area and who pay 30 percent or more of their earnings on housing.


Those whose income is below the 30th percentile in their area would be especially benefitted by the new legislation, Whitaker told the House Economic Development and Workforce Services Committee.

"We’re hoping to see more units," he said. "We’re hoping to nearly triple the amount of units to persons at those extremely low incomes."

Low-income families — particularly those that earn less than $20,000 per year — disproporationately pay unsustainable percentages of their earnings on housing, according to Whitaker.

"(They) have the least units available to them to rent at an affordable price," said Whitaker, who participated in the research into the legislation.

Jonathan Hardy, director of the state Division of Community and Housing, agreed in his presentation to the same committee.

"(Some low income families) are in a unit paying 50, 60 percent sometimes of all their income," Hardy said. "It's hard to keep them progressing if they can't keep their housing stable."

Hardy also told lawmakers in November that there is a need for about 43,000 additional units statewide that qualify as affordable housing.

Committee members expressed support for the bill, but also voiced concerns about whether potential changes in federal tax code under a new administration could ultimately make the state tax credit program less enticing to developers. The federal government also currently offers affordable housing incentives through tax credits.

Whitaker reassured legislators that Sen. Orrin Hatch, R-Utah, has indicated he is in favor of a similar measure at the federal level that would increase tax incentives for developers, serving as an indication that some members of Congress are on the same page regarding goals for affordable housing.

Kathy Bray, president and CEO of Volunteers of America-Utah, told legislators in January that she supports the measure because it further helps destitute families find a way back into normalcy.

"We have a lot of homeless individuals who are ready to move out of the shelters, into affordable housing, and there's no housing to move into," Bray said at the time.

Blaine Walker, newly elected president of the board of trustees for the Road Home, agreed with Bray.

"When you see the young families that move from homelessness into housing, and that is the goal, and there is a lack of affordable housing, that really hits home," Walker said.

The final version of the bill passed the state House in a 62-9 vote and was approved by the Senate by a 25-1 margin.

Ben Lockhart


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