Samantha Hayes ReportingSeveral years ago Rick Romero was looking for an investment opportunity and bought rental property.
Rick Romero, Property Owner: “Bought one next door and another on 400 North.”
Romero says he didn't realize there was a problem until he tried to sell the property, and that's when he ran into lending and zoning issues.
Rick Romero: “Me and the other owners had no idea there were any restrictions of zoning.”
The zoning changed to accommodate duplexes and single-family houses, like the structures being built just next door. It’s a problem because lenders require a 100 percent rebuild letter from the city, in case the property is damaged.
Rick Romero: “If they are destroyed by 50 percent or more, we can’t rebuild them as four-plexes, only as single family dwelling or duplexes, which changes the value of them.”
Greg Riley, Prudential Utah Real Estate: “From that point, the deal fell through. Mortgage companies would not lend on a property that could only be rebuilt after a 50 percent destruction had occurred.”
As many as 1300 owners are in this situation. The good news for them is the Salt Lake City zoning commission is recommending changing the ordinance.
Everett Joice, Principle Planner Salt Lake City: “It will help the city stabilize the housing stock and reinvestment in housing. As they have difficulty getting financing, they put less money in the properties.”
The Planning and Zoning commission's recommendation now goes to the City Council for a final vote.