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SALT LAKE CITY — Utah cities have occasionally felt sidelined by lawmakers attempting to regulate their way out of the state's affordable housing shortage.
But Sen. Lincoln Fillmore, R-South Jordan, said his new bill that requires cities to allow modular homes has the "full support" from these important stakeholders.
"I imagine that there are some individual cities that raise concerns, but all of those concerns have been listened to and addressed and I think we have full support from all stakeholders on the version of the bill that will come out of committee today," Fillmore said during a Wednesday media availability.
His bill, SB168, will be one of three to emerge from the commission on housing affordability this session, said Fillmore, who chairs the commission along with Rep. Stephen Whyte, R-Mapleton. The bill exited the Senate Economic Development and Workforce Services Committee on Wednesday with unanimous support and will now face a full Senate vote.
Fillmore's Housing Affordability Amendments is the product of a year of work, he said during the hearing, and represents the outcome of discussions with the Utah League of City and Towns, homebuilders, the modular construction industry and inspection agencies.
The bill first provides a definition of modular housing, a still-emerging technology that allows tiny homes, as well as single-family and multifamily residential units, to be prefabricated in different segments and then assembled at the home site.
It then outlines a statewide building code for modular building units with the hope that doing so will allow the industry to scale in the state as cities are able to more easily accommodate the new home type in their zoning laws and city plans. The bill includes instructions on how modular units are to be inspected both at the factory and as it's being put together on-site.
It also includes revisions to last year's first-time homebuyer program that adjusts the maximum price cap of eligible homes based on dwelling unit type and location within the state.
While the bill does enforce a new inspection regime on local governments across the state, cities and towns are in favor of the measure because it does not limit the cities' legislative purview, like some other proposals do, while also addressing the state's housing shortage, according to Cameron Diehl, the executive director of the Utah League of Cities and Towns.
"What you have in front of you does modify how local governments will regulate modular housing compared to how we would regulate it today," Diehl testified at the hearing. "But our membership was willing to come to the table and make these changes in order to facilitate the expansion of this industry, which we think will make a difference over time across the state."
Diehl said he believes modular housing will make new home construction more accessible to rural Utah and will bring down the cost of home production and the overall price of housing in urban areas. Modular housing has already had this effect in other early experiments around the country, Diehl said, which is what motivated Utah's cities to accept losing some of their "traditional regulatory authority over these types of housing units."
Utah cities oppose statewide zoning regulation
But other attempts by the state in recent years to influence local decision-making on housing policy have been unwelcome developments for Utah cities.
One example was HB306, introduced by Rep. Ray Ward, R-Bountiful, this year, which would have required urban municipalities to approve single-family starter homes — defined as a home below the area's mean home price — on one-eighth of an acre lot size.
Ward told the Deseret News his bill has stalled in committee and will likely need to be resurrected in a different form next year. He understands why cities might oppose his approach, but said a statewide mandate is the only way to increase the supply of affordable housing because cities tend to create general plans and zoning laws that favor current residents, not high-density growth.
"To me, those kinds of solutions will work more surely and more long term than any of the other things that I have heard talked about," Ward said Wednesday. "So I'll still try and advocate for it but that's what happened this year with that particular bill."
Riverton Mayor Trent Staggs, who is currently running for U.S. Senate, said during his six years in office, the state Legislature has passed 24 pieces of legislation, many of which "take away, minimize land use authority of municipalities."
Staggs, and the mayors of Washington and Ivins, came out against a legislative audit released last year on similar grounds. In November, state auditors traced the state's housing shortage back to city policy and recommended statewide requirements to increase zoning density in city plans and implement penalties for noncompliance with the state's housing goals.
Staggs said he "couldn't disagree more strongly" with the premise and the conclusion of the audit. Cities are not the problem, Staggs said, pointing to the state's nearly 200,000 entitled lots, including 2,800 in Riverton, that he says are ready to "be built on today" by home developers.
"'Why aren't they building?' Is really the question that we should be asking," Staggs said.
While developers argue that city zoning requirements make the construction of starter homes an unprofitable or impossible exercise, Staggs said developers are simply responding to market forces and biding their time "in an ever-increasing pricing environment."
How can Utah lawmakers help cities increase affordable housing?
According to Diehl, lawmakers strike the right balance when they create pathways to "housing affordability, while also still respecting the role of the private sector and local governments in the state."
He cites Fillmore's modular housing bill as one such example, as well as a bill Fillmore introduced last year that recategorized the creation of subdivisions as an administrative decision for city staff and developers, as opposed to a legislative process that had to be decided, down to the smallest detail, by city lawmakers.
Other state-led solutions, according to Staggs, could include returning authority to cities to implement home ownership restrictions so new developments are not purchased by large corporations and then rented out.
But, ultimately, Staggs said, cities should be given latitude to find solutions to the housing crisis for themselves. One tactic Riverton is exploring is setting five-year sunset clauses for developer agreements so that homebuilders can't sit on the land they have rights to.
Riverton Councilman Andy Pierucci said one of the best things cities can do is create a transparent general plan and stick to it reliably, anything more risks making development "more complicated and more expensive."
Officials at the city level are better positioned to find effective solutions to the problem, Pierucci said, because they are "on the front lines of it."
"I would say that just like states are laboratories for democracy, nationally, cities should be viewed as laboratories for democracy at a smaller scale," Pierucci said. "And as the state trusts cities to do more, or less, but empower them to try out innovative solutions to some of these challenges that we're having across the state, I think that they're going to be pleasantly surprised to see some new options, some new opportunities, some new ideas come out that are having an impact."
