09/07/2022 - Meeting Materials REGULAR MEETING OF THE
REDEVELOPMENT ADVISORY COMMITTEE
Wednesday, September 7, 2022
4:00 p.m.
451 S State Street Room 126
Salt Lake City, Utah 84111
AGENDA
1. Roll Call
2. Announcements by the Staff
3. Approval of the minutes
A. Review and Approval of June 1, 2022 RAC Minutes
RAC members will review the June 1, 2022 meeting minutes and consider for approval.
4. Business
A. Housing and Transit Reinvestment Zone(HTRZ)Creation—Lauren Parisi and Kate Werrett, Project
Managers
RDA staff will provide a briefing on the Housing and Transit Reinvestment Zone Creation. Members may provide
comments and feedback to RDA staff.
B. Accessory Dwelling Unit Financing Program—Austin Taylor, Project Manager
RDA staff will provide a briefing on the RDA Accessory Dwelling Unit Financing Program. Members may provide
comments and feedback to RDA staff.
5. Adjournment
People with disabilities may make requests for reasonable accommodation no later than 48 hours in advance in order to
attend this Redevelopment Advisory Committee. Accommodations may include alternate formats, interpreters, and other
auxiliary aids. This is an accessible facility. For questions, requests, or additional information, please contact the RDA at
801-535-7240.
MINUTES
FROM THE MEETING OF THE
REDEVELOPMENT ADVISORY COMMITTEE
Wednesday,June 1, 2022
4:00 p.m.
1. Roll Call
The following members were present:
Brian Doughty, Chairperson
Mojdeh Sakaki,Vice-Chairperson
Nic Peterson, Member
Rosa Bandeirinha, Member
Claudia O'Grady, Member
The following members were absent:
Mark Isaac, Member
Also Present:
Cara Lindsley, Deputy Director
Lauren Parisi, Project Manager
Ashley Ogden, Project Manager
Tracy Tran, Project Manager
Amanda Greenland, Communications and Outreach Manager
Kathryn Hackman, Communications and Outreach Assistant
Felina Lazalde, Office Facilitator
Kate Werrett, Project Manager
Eric Holmes, Data Manager
Baxter Reecer, Guest
Robyn Stine, Office Manager
2. Briefing by the Staff
Cara Lindsley provided an update to RAC on the following:
• Folsom Trail ribbon cutting
• Odon Festival in July
• 600 S Main TRAX Grand Opening in July
• Schmidt Apartments which were approved as part of the 2021 NOFA is not moving forward. The
$1.1 Million in funds will be made available for emergency loan requests.
3. Approval of the minutes of the April 6, 2022 meeting
Mr. Peterson made a motion to approve the minutes from the April 6, 2022 meeting. Ms. Sakaki seconded the
motion. Upon roll call,the motion passed unanimously.
4. Business
A. RDA Commercial Assistance Opportunities—Ashley Ogden and Lauren Parisi, RDA Project
Managers
Ashley Ogden and Lauren Parisi provided a briefing on the revisions to the existing RDA Loan and Granary
Adaptive Reuse Loan Programs. Some of the challenges include:
1) Strong market forces are causing commercial rents to become increasingly unaffordable.
• High demand;
• Limited Supply.
2) COVID-19 severely impacted local businesses, especially those owned by people of color.
• Since February 2020, a quarter(1/4)to one-third (1/3)of all U.S. small businesses have
closed.
• Studies show that businesses owned by people of color and immigrants tend to be
concentrated within the food, personal services, and retail sectors that are most
vulnerable to economic downturn. This led to disproportionate COVID impacts:
o In early months of the pandemic, the number of Black business owners fell by
41 percent(41%).
o The number of Latinx business owners fell by 32 percent(32%).
o The number of Asian business owners fell by 26 percent(26%).
o The number of white business owners fell by 17 percent(17%).
o A November 2020 survey of Black and Latinx business owners indicated that
one-fifth (1/5)expected to close their businesses by mid-2021.
Much is lost through the closure or displacement of local businesses:
• Goods,services, and amenities that are geared toward the needs,tastes, and desires of
residents
• Community landmarks and gathering spaces that foster relationship-building
• Business-sponsored programs and other investments
• Character and cultural identity that make each neighborhood a unique and interesting
place to be
• Economic stability of the neighborhood (less local circulation of dollars, local employment)
It was explained that the preliminary proposal includes a briefing on the following programs:
• Revolving Loan Fund(RLF)—Support RDA commercial objectives by amending the existing RDA Loan
Program to target commercial projects that meet threshold eligibility criteria.
• Adaptive Reuse Loan Program—Facilitate the conversion of vacant, underutilized, or economically
challenged buildings for a new, more productive use to support local businesses while maintaining
neighborhood character.
• Affordable Storefront Activation Program—Use public ownership or control of commercial spaces to
provide affordable ownership or rental opportunities to local businesses and community-supporting non-
profits.
• Education and Technical Assistance—Make RDA programming more accessible to non-traditional
applicants who may not have real estate development experience.
The next steps include:
a. Community Engagement Strategy
b. Data Collection/Cast Study Analysis
c. Proposal and Adoption
Discussion:
• Ms. Sakaki said the stats shared are National and asked what they were for Utah. Ms. Sakaki
suggested reaching out to the University of Utah or Salt Lake City College.
• Mr. Doughty said he likes the idea of this program and asked how it came about and if Staff is reaching
out to other cities with similar programs.
• Mr. Doughty asked about the adaptive reuse loan program and if it would not be limited to only Main
and State Streets.
• Mr. Peterson asked if Ballpark is still active.
• Mr. Doughty said he would not like the Agency to take a loss on leases, if possible.
5. Adjournment
There being no further business the meeting was adjourned.
Brian Doughty, Chairperson
This document along with the digital recording constitute the official minutes of the Redevelopment Advisory
Committee held June 1, 2022.
MAYOR ERIN MENDENHALL DANNY WALZ
Executive Director = , - u' r Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
STAFF MEMO
DATE: September 2, 2022
TO: Redevelopment Advisory Committee (RAC)
PREPARED BY: Lauren Parisi and Kate Werrett, RDA Project Managers
RE: Housing and Transit Reinvestment Zone (HTRZ) Creation
REQUESTED ACTION: Discussion and consideration for moving forward with the process to
establish HTRZs centered around transit stops
POLICY ITEM: Project Area Creation
BUDGET IMPACTS: N/A
EXECUTIVE SUMMARY: In 2021,the State of Utah adopted Senate Bill 217 establishing the Housing
and Transit Reinvestment Zone ("HTRZ") Act ("Act"). In 2022, the State amended the bill to include the
revisions set forth in Senate Bill 140. Intended to help address Utah's severe housing crisis,this legislation
allows for municipalities to capture tax increment revenue around certain public transit facilities to facilitate
mixed-use,multifamily,and affordable housing development and,ultimately, a higher utilization of public
transit. This memo reviews HTRZ regulations, explores potential areas in Salt Lake City where HTRZs
could be implemented,and maps out next steps for HTRZ creation.
ANALYSIS:
HTRZ Regulations.
In 2021, Senate Bill 217 adopted the Housing and Transit Reinvestment Zone Act ("Act"). The Act
established the objectives and requirements to create project areas specific to HTRZs.The Act was updated
in 2022 with the passing of Senate Bill 140 to clarify the process, requirements, and objectives of the
HTRZs.
An HTRZ is a project area created adjacent to public transit with the intent to use tax increment to promote
sustainable mixed-use development, affordable housing, and public transportation. Up to 80% of
incremental property tax and 15%of sales tax generated within the project area can be collected to promote
these objectives.
1. General HTRZ Requirements. Project area requirements that apply to every HTRZ project area
include:
• Property Tax Maximum Increment Participation: 80%
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET,ROOM 118 WWW.SLC.GOV•WWW.SLCRDA.COM
P.O.BOX 145518,SALT LAKE CITY,UTAH 84114-5518 TEL 801-535-7240-FAX 801-535-7245
• Sales Tax Increment Maximum Participation: 15%
• Housing
o Affordable Housing: At least 10% of housing units must be affordable to 80% AMI
households
o Must include a mixture of housing units to ensure a reasonable percentage of dwellings
with more than one bedroom
• Land Use: 51%of developable area must be residential
• Density: an average of 50 dwelling units per acre is required.
o There is a caveat that if a BRT's tax increment collection is reduced to 60%,its project
area may have a reduced density of 39-49 dwelling units per acre.
• Tax Increment Collection Cap: Determined by the proposal
• HTRZ Administration Fees: 1% of the HTRZ funds + cost to complete the gap analysis
described in 63N-3-604(2)of the Act.
2. Transit Stop Specific HTRZ Requirements.A unique difference between HTRZs and other tax
increment sources, is the impact of the different type of transit stops on the characteristics of the
project area. The Act provides requirements and limitations dependent on the type of transit stop
an HTRZ encompasses. Certain limiting factors are defined by the project area transit stops for
commuter rail,light rail,BRT,or those located within an Opportunity Zone.
Examples of varying allowances include:
• Size of Project Area
• Maximum Acreage
• Term and Phase Length
• Number of HTRZ project areas per transit stop type allowed per county
The table below shows the differences between possible project areas within Salt Lake City.
FRONTRUNNER TRAX/S-LINE BRT OPPORTUNITY
ZONE
BOUNDARY DISTANCE FROM STATION
1/4 MILE X X
113 MILE X
1/2 MILE X(regardless of
transit e)
Note:Any parcels bisected by the radius boundary can be included in their entirety
NLxuv um ACREAGE
NONCONTIGUOUS 125 100 100 Dependent on
ACRES I station type
TAX INCREMENT
TERM&PHASE 25 years within a 45- 15ears within a 30-
Dependent on
LENGTH year eriod years period station type
NUMBER OF HTRZ PROJECT AREAS ALLOWED PER COUNTY
HTRZs per County(#) I Not defined 1 8 1 3 1
3. HTRZs Comparison with CRAB—While similar to existing tax increment project areas such as
Community Reinvestment Areas("CRAs"),HTRZs vary in some significant ways as summarized
in the table below.
HTRZ CRA
Creation • HTRZ proposal is submitted to the • Survey Resolution adopted by RDA
Governor's Office of Economic Opportunity Board
• Project Area Plan&Budget Public
Hearin
• State appointed HTRZ Committee • RDA Board adopts Plan&Budget
commissions a gap analysis and • City adopts ordinance approving the Plan
reviews/approves proposal &Budget
Taxing • Required taxing entity participation as agreed • Taxing entities may opt out of
Entities to by the HTRZ Committee and formalized participation
with interlocal agreements • Participation is negotiated and established
with interlocal agreements
Tax • Participation Rate:up to 80%of property tax • Participation Rate:up to 75%of property
Increment increment tax increment as negotiated
• Up to 15%of state sales tax • No sales tax participation
RDA Board • HTRZ goals/policy decisions • RDA Board reviews and approves CRA
Controls • Budgeting of funds creation and implementation throughout
• Tax Increment Reimbursement Agreements the process
(TIRAs)&other development assistance • Budgeting of funds
programs • Tax Increment Reimbursement
Agreements(TIRAs)&other
development assistance programs
NOTE:Other tax increment funding sources are available,and applicability varies dependent upon the type of project.Two possible options are
PIDs and TRZs.
4. Goals of an HTRZ—The HTRZ goals as described by 63N-3-603 of the Act are described in the
State Objectives section of this memo.
5. Use of HTRZ Funds—Per 63N-3-607,HTRZ funds may be used to pay for a portion of the costs
associated with the following:
a. Income targeted housing costs
b. Structured parking within the HTRZ
c. Enhanced development costs
d. Horizontal construction costs
e. Vertical construction costs
f. Property acquisition costs
g. HTRZ Administration,including the State's gap analysis
h. Public infrastructure
HTRZ Objectives.
1. State Objectives—As summarized by Zions Public Finance in a 2021 HTRZ White Paper,the Act
represents an "all-hands-on-deck" approach to helping mitigate the housing affordability crisis
along the Wasatch Front, and to better utilize transit infrastructure and investment. It intends to
encourage transit-oriented development (TOD) near UTA FrontRunner stations, and other transit
stops, through tax increment financing and integral city and agency planning efforts. The Act
includes seven main objectives as follows:
a. Higher utilization of public transit
b. Increasing availability of housing,including affordable housing
c. Conservation of water resources through efficient land use
d. Improving air quality by reducing fuel consumption and motor vehicle trips
e. Encouraging transformative mixed-use development and investment in transportation and
public transit infrastructure in strategic areas
f. Strategic land use and municipal planning in major transit investment corridors
g. Increasing access to employment and educational opportunities
2. Alignment with City Objectives—While various city plans provide guidance regarding the State's
overarching HTRZ objectives, encouraging transit-oriented and affordable housing development
in strategic areas of the city— especially as a means to conserve water, improve air quality, and
increase access to employment and education — are objectives that city plans and the RDA's
Guiding Framework (see attached) generally support. Multiple guiding principles within the
citywide vision plan,Plan Salt Lake (2015) directly align with the objectives of HTRZ creation,
particularly the promotion of-
a. Growing responsibly while providing people with choices about where they live,how they
live,and how they get around.
b. Access to a wide variety of housing types for all income levels throughout the City,
providing the basic human need for safety and responding to changing demographics.
c. A transportation and mobility network that is safe, accessible, reliable, affordable, and
sustainable,providing real choices and connecting people with places.
d. Air that is healthy and clean.
e. Protecting the natural environment while providing access and opportunities to recreate
and enjoy nature.
f. A balanced economy that produces quality jobs and fosters an environment for commerce,
local business,and industry to thrive.
Potential HTRZ Locations.Given the legislation's quota of eight(8)HTRZs adjacent to light rail stations
per county and one (1) HTRZ in an Opportunity Zone associated with light rail per city, the RDA must
contemplate which transit stops would make the most of the HTRZ tool if submitted to the State.
Characteristics of an area that make for a strong HTRZ candidate include:
• General alignment with State, City and RDA objectives
• Need for significant public infrastructure improvements
• Areas where specific catalytic public projects are planned and an estimated funding gap can be
quantified
• Areas where specific catalytic private projects are planned and an estimated funding gap can
be quantified
• Areas where additional investment would benefit Salt Lake City residents in the most equitable
manner
Potential HTRZ areas include the following.
1. Intermodal Hub. hilt: .�►.
Salt Lake City's intermodal rr, �' ' •� t=
transit hub, located at • "` 1.
rt.n scow
approximately 600 West and
300 South, encompasses the `
Station Center project
Development . .
making this a top priority Opportunity 1 y !
location for tax increment "
opportunities. A block east Green Loop
of the Rio Grande Depot,the
FrontRunner, TRAX blue
Grand Boulevards
line, and Greyhound bus
ML
lines all convene at this point
,.
where "first and last-mile" In,ermodel Huh t` - p
improvements are critical.
As this area is adjacent to a
„ 1
FrontRunner station, the `
Ppotential project area is
P J U.2m1
excluded from State's quota
of eight light rail HTRZs per County and;therefore,may not need to be submitted as the Agency's
first HTRZ request to the State, but should be submitted in the near future as a means to support
the Agency's Station Center planning efforts, the Downtown Plan's Green Loop along 500 West
and the potential light rail extension project. More generally, there is significant potential here to
facilitate improved east-west connectivity.
2. 650 S.Main Street
TRAX Stop. 0 t
This area encompasses Rail Slope ~ p-
much of 500 and 600 wy �'' '� ' L _
South where the City's ♦ _ 4 _
Downtown Plan calls for
the Grand Boulevards -
- - _'x ' -�� h ;-fir •
District. The District
Grand Boulevards -
should be"a major point of
arrival to the downtown by
car and designed to ,g ti 1
welcome and excite
visitors, framed by mid-
rise buildings, large street
trees, and iconic lighting. - -
Unsightly elements, such -
as large power lines and 0.2m;
billboards, should be relocated, consolidated or enhanced." Significant investment in the public
right-of-way is needed to accomplish this vision. Support has also been requested from private
developers for this area.
3. 900 South/200 West HnTIRtZ
(Granary) TRAX Stop.
This area encompasses
Rail
=:
much of what is included in , 'c -
the RDA's current Granary
Project Area, which is set :
to expire in 2025. This area Fleet Block
encompasses the Fleet
Block, portions of the Green Loop
Downtown Plan's Green
Loop that runs along 5t' Grand Boulevards _
West and 9' South, and
portions of roadway where _
light rail could be extended
in the future. While this = f }
area doesn't encompass all
of the Grand Boulevard
District's corridors, this
project could potentially be funded with tax increment if it is deemed that the projects directly
benefit the HTRZ.
Support has also been requested from private developers for public infrastructure improvements in
the public right-of-way.Additionally,requests have been made for affordable housing projects and
parking garages in the area.
4. 200 West/1300 South(Ballpark)TRAX Stop.
Investment in the Ballpark neighborhood is one of the current administration's top priorities. Tax
increment could be used in this area to redevelop city-owned parcels that would produce revenue
to fund improvements and HTRZ
maintenance for the t
ballpark. Pedestrian- rk
safety enhancements and Rail stops
general activation are ♦ y
much needed as a ._ �., I
mechanism to combat Develop �� ;', OJ lT,
OPPortunit. . �. • ' i � 'L
crime in the area. p -L y r'.i
Quantifying the specific
fundinga b
gap required Y 1
the State may be more
vS
straightforward in this
area than others.
The maximum tax
increment collection forIla
parcels included in L
HTRZs is 80%. If parcels
600k
are included in both the
State Street CRA and a potential Ballpark HTRZ,the maximum combined collection will be 80%.
Overlapping tax increment project areas will not increase the maximum tax increment collection
for the parcels.
5. Sugar House S-Line.
There is potential for an _
HTRZ along the S-Line in Rail Stops
Sugar House, particularly
centered around the ♦ Zl_ a �'''
Fairmont and Sugarmont
stations. The establishment
of this project area could
i
support the extension of the k,
TRAX line to the east; ' r '
however, other potential 'a�� �. €7 ���� �,• � ,
funding sources could also
be used to support this
,, .
extension, such as a Transit
Reinvestment Zone (TRZ). = El
Additionally, support has
been requested for the '
Thackeray - a multi-family 60Off
project planned at 2100 South and 900 East. Tax increment could be used to push affordable
housing requirements beyond the minimum.
HTRZ Creation and Implementation.
The selection and prioritization of HTRZ project area locations are the next steps for moving forward with
any project area creation. City policy considerations, equity opportunities, and the data needed to submit a
proposal are important factors in selecting where to create an HTRZ and what parcels to include.
1. City Policy Considerations-In addition to the Act's alignment with citywide objectives and the
RDA's Guiding Framework, the Board may also wish to consider the following when analyzing
potential areas of the city to establish an HTRZ:
a. How can HTRZ creation be done in the most equitable manner?
b. What area(s)of the city are in need RDA investment to support housing,transit and public
infrastructure(transit-oriented development)?
c. What area(s) of the city encompass specific sites where public and/or private catalytic
development projects are being planned?
d. What area(s)of the city could leverage existing growth and other funding sources to make
the greatest impact when reinvested into the neighborhood?
2. Request for Information—Through a Request for Information(RFI),the RDA intends to gather
details regarding future development plans from property owners and stakeholders within the
potential initial HTRZ(s). Notice of the RFI will be transmitted to property owners within the
possible areas. Respondents will have the opportunity to comment on changes they would like to
see within their community and any modifications or development plans they have for their parcels.
The RFI will be designed to allow participation from all potential parcel owners within a given
distance of a selected transit stop. Based on the materials provided and the readiness of potential
projects to move forward,RDA staff will identify potential parcels to include in the HTRZ project
area(s). The RFI will make clear that parcel selection for the HTRZ proposal does not necessarily
mean tax increment funds will be available to those particular parcels or development projects.The
RFI process will also allow the Agency to determine project area specific objectives and catalytic
projects. The responses received to the RFI may identify potential public-private partnerships that
align with City plans which could indicate where funds should be allocated.
The RFI strategy allows for the submission of development plans from all property owners within
given areas. This equitable selection process will allow those with projects most aligned to the
objectives of the State, City, and Project Area to be included within the scope of the HTRZ
application. It is anticipated that this approach will lead to RDA investment to support housing,
transit, and public infrastructure beyond the extent that the market would normally create.
3. HTRZ Proposal — Section 63N-3-604 of the Act provides requirements for the proposal
submission to the Governor's Office of Economic Opportunity (GOEO). These requirements
include defining the project boundary, identifying included parcels, establishing a base year and
collection years, explaining how the State Objectives will be met, the tax increment projections,
and other several other requested items. The HTRZ Committee uses the tax increment projection
included in the proposal to set the HTRZ cap.
4. HTRZ Implementation — When compared with CRA project areas, the Act creates a more
streamlined implementation opportunity for HTRZ project areas. It is expected that the HTRZ
specific review process will allow for swifter implementation of project areas. After HTRZ
Committee approval of a proposal, the taxing entity participation as agreed to by the HTRZ
Committee will be formalized with interlocal agreements and potential developer incentives will
be considered.
Next Steps. The purpose of this memo is to present HTRZs as an RDA tool and provide an equitable
implementation strategy. Insights and feedback from the Redevelopment Advisory Committee will be
provided to the RDA Board. After discussion with the Board, RDA staff intends to issue a RFI which will
be used to create an HTRZ proposal.RFI submissions will be accepted this fall with the intent of submitting
HTRZ proposals thereafter.
ATTACHMENTS:
A. Eligible HTRZ Locations Map
B. Transit Station Map
C. Guiding Framework
ATTACHMENT A: ELIGIBLE HTRZ LOCATIONS MAP
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MAYOR ERIN MENDENHALL =Q, _,�1 DANNY WALZ
Executive Director _ Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
STAFF MEMO
DATE: September 2,2022
PREPARED BY: Austin Taylor, Project Manager
RE: Accessory Dwelling Unit Financing Program
REQUESTED ACTION: Information Item
POLICY ITEM: Creation of a new accessory dwelling unit financing program
BUDGET IMPACTS: None at this time
EXECUTIVE SUMMARY
The Redevelopment Agency (RDA) is working to create a program to primarily help low- to moderate-
income homeowners finance accessory dwelling unit (ADU) construction. Accessory dwelling unit
construction has not yet happened at scale and throughout the city,partly due to cost barriers. The RDA
intends to publish a RFQ and work with community partners to provide financing options with the goal of
helping homeowners build ADUs and increase the supply of attainable housing in low-density single-
family neighborhoods. The initial focus of the program will be within the RDA's 9-Line Project Area.
BACKGROUND INFORMATION
Accessory Dwelling Units
Accessory dwelling units are one of many important tools to solving our region's housing crisis. ADUs are
small rental housing unitsattached or detached—located on the same parcel as the main house. They are
typically rented and managed by the owner of the main house who also lives on-site. ADUs are flexible,
allowing homeowners to earn rental income, downsize into the ADU, or provide intergenerational housing.
They are also typically less expensive to build than a new home or apartment unit (because land cost is
"free") and are often rented below market rates—even free to the owner's friends or family.
Salt Lake City's latest housing plan, Growing SLC, calls for the City to encourage ADU construction:
Goal 1.1.3 -Revise the Accessory Dwelling Unit ordinance to expand its application and develop measures
to promote its use.
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV-WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 - FAX 801-535-7245
Launching the Program in the 9-Line Project Area
The RDA intends to launch a financing program to help homeowners pay for ADU construction. The RDA
has decided to launch the program in the 9-Line Project Area primarily because of its large amount of
single-family housing stock, relatively high homeownership rates, and lack of ADU construction to date.
Launching an ADU financing program in the 9-Line Project Area by 2025 is a milestone within the
Interlocal Agreement with the County authorizing the collection of tax increment and will increase the
portion of the County's funds that the RDA receives.
The West Side Master Plan also calls for more ADUs in west-side neighborhoods:
"Salt Lake City should expand the geographic area where accessory dwelling units are permitted to
include the single-family districts in the Westside. Application of the accessory dwelling unit
ordinance in this community would provide opportunities for additional density and a wider variety
of housing choices without impacting the predominant development pattern."
"Protect and encourage ongoing investment in existing low-density residential neighborhoods."
Funding
The RDA has set aside $394,000 for the initial creation of an ADU financing program for the 9-Line
Project Area.
ANALYSIS & ISSUES
Challenges
Salt Lake City legalized ADUs in single-family zones throughout the city in 2018. As of January 1,2022,
only 30 ADUs have been built. This section highlights the barriers limiting ADU construction.
Challenge #1: Zoning Restrictions
• Though Salt Lake City has some of the most liberal ADU zoning policies in the state, there are still
a few codes that make ADU construction challenging for many homeowners such as height limits,
setbacks, and maximum unit size.'
• In a series of 12 interviews with builders, homeowners, and architects who have worked on ADU
projects, many people noted zoning restrictions as difficult to comply with, especially on smaller
lots.
• The Planning Division is currently working on a set of zoning code changes that will expand ADU
construction possibilities. The proposed changes address every issue that RDA staff heard in its
series of community interviews.2
Challenge #2: Construction Costs
• Construction costs have escalated 15% per year from July 2020 to July 2022, much faster than the
standard 3% escalation rate between January 2010 and January 2020.3
'https:Hcodelibrary.amlegal.com/codes/saltlakecityut/Iatest/saltlakecity ut/0-0-0-68737
2 https://www.slc.gov/planning/2022/05/13/accessory-dwelling-unit-code-changes/
'https:Hfred.stlouisfed.org/series/WPU801
2
• RDA staff found that Salt Lake City homeowners are paying between $100,000 and $250,000 to
build a detached ADU on their lot.
• Homeowners incur many unexpected costs during ADU construction, especially in utility and
sitework.
Challenge #3: Lack of Financing Options
• Since lenders have not traditionally seen ADUs as a separate dwelling unit,homeowners have not
been able to borrow against the ADU's potential rental income as investors are able to do with
multifamily investment properties.
• Through its interview series, RDA staff found that most homeowners are primarily paying for ADU
construction with liquid assets such as cash savings or by selling securities such as stocks and
bonds. Others are using home equity financing such as a home equity line of credit or a cash out
refinance.
• A lack of financing options has led to inequitable ADU construction. The Planning Division's 2021
ADU report shows that homeowners in single-family neighborhoods east of I-15 are building
ADUs at a higher rate than homeowners west of I-15, despite having similar lot sizes and zoning
restrictions.4
Program Exploration Work
RDA staff has completed the following tasks to determine the challenges and opportunities regarding
ADUs in Salt Lake City:
1. Held a series of 12 interviews with local homeowners, architects, builders, policy experts, and
consultants who are working on ADU projects
2. Conducted a survey of ADU financing programs throughout the country
3. Studied Salt Lake City's ADU zoning code and annual ADU reports
4. Studied Salt Lake City's RDA 9-Line Community Reinvestment Area Plan and West Side Master
Plan
5. Attended local and national discussions to learn about ADU design, financing, policy, and trends
6. Researched available ADU financing products, including the home equity line of credit, cash out
refinance, and construction loan and refinance
7. Organized the City's ADU Task Force which includes staff from the RDA and Community and
Neighborhoods' Housing Stability, Building Services, and Planning divisions as well as the Public
Utilities Department to work collaboratively on ADU issues including zoning, permitting, and
financing
8. Drafted an RFQ to find potential program partners and structures to carry out an impactful ADU
financing program
RFQ Development
After completing the program exploration listed above, RDA staff decided that the most appropriate next
step would be to develop an RFQ for publication. Though the RDA has money set aside and is able to run
its own ADU financing program, RFQ submissions may show us that there are other program ideas or
partners that can help the RDA stretch its money and create the most impact possible.
4 http://www.slcdocs.com/Planning/Reports/2021/ADU%202021%20Report.pdf/
3
NEXT STEPS
Redevelopment Advisory Committee and Board Input
RDA staff will seek Redevelopment Advisory Committee and Board members' input to understand if
Committee members agree with staff s goals for the ADU program and if staff should pursue an RFQ
publication and potential partnerships.
RFQ Publication and Review
RDA staff will incorporate Committee and Board members' ideas into the RFQ.
RDA staff, with input from the City's ADU Task Force, will review RFQ submissions and may select one
or more organizations to partner with to create an ADU financing program. The RDA may run the program
alone if it does not make sense to partner.
ADU Financing Program Proposal
RDA staff, with input from the City's ADU Task Force, will work alone or with partner organization(s) to
design an ADU financing program.
Board Approval
RDA staff will bring the ADU financing program proposal to the Board for final approval before program
launch.
Program Launch
RDA staff will launch the ADU financing program, providing loans to help low- to moderate-income
homeowners build and rent ADUs.
ATTACHMENTS
Attachment A: ADU Program Examples
Attachment B: 9-Line Project Area Map and Relevant Data
Attachment C: Map of Permitted ADUs as of January 2022 and Zoning Map
Attachment D: Observed 2022 Advertised ADU Rents and Affordability
4
ATTACHMENT A
ADU Program Examples
Organization Offerings Requirements Program Link
City of Interest-free gap financing Internal ADU only https://www.boston.gov/departments
Boston, MA up to $50k /housing/addition-dwelling-
units/adu- ro ram
County of $75k grants ADU must be rented https://planning.lacounty.gov/second
Los Angeles, to formerly homeless unitpilot
CA
City of Napa, $50k forgivable loan ADU must be rented https://www.cityofnapa.org/747/Juni
CA at approx. 55% AMI or-Unit-Initiative-Program
City of $150k 3yr construction Must be rented to https://www.cityofpasadena.net/hous
Pasadena, CA loan at 1% Section 8 tenant; ing/second-unit-adu-program/
must be repaid within
3 years
City of $130k 15yr second None https://www.cityofmadison.com/dpc
Madison, WI mortgage loan at 2% ed/economicdevelopment/adu-loan-
financin /3809/
Eight Village ADU owned and operated Homeowner allows https://www.backyardatl.com/
Backyard by Eight Village; ADU on their lot
ATL homeowner may purchase through ground lease
ADU at any time
Keys to Technical assistance: None, though the https://keystoequity.org/
Equity design, permitting, program primarily
(Oakland, financing construction, and focuses on black
CA) property management homeowners
La Mas (Los Technical assistance: Homeowner must https://staticl.squarespace.com/static
Angeles, CA) design, permitting, rent to Section 8 /5840c42cf5e2310b848ee53a/t/5be4
financing, construction, tenant for 5 years c7bcb8a0455819808583/154171999
and property management 7027/LA-
Ma%CC%81 s_BackyardHomes_On
ePager_09.24.18+(1).pdf
Symbium Software that allows None https://symbium.com/
homeowners to "fit"pre-
approved ADU designs on
their lot
Dweller Prefabricated ADUs owned Homeowner gives https://www.dweller.com/
and operated by Dweller free ground lease and
receives 25% of rent
5
ATTACHMENT B
9-Line Project Area Map and Relevant Data
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Relevant Data:
• $232k average assessed house value (2022)
• $47,719 median household income (2020)
• Historic redlining
• 8,279 sqft median lot size (2022)
• 89% of residential land zoned RI (2014)
• 4.1 average family size (2014]
6
ATTACHMENT C
Map of Permitted ADUs as of January 2022 and Zoning Map
District 1 2
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ATTACHMENT D
Observed 2022 Advertised ADU Rents and Affordability
The following table compares rental rates observed on ADU rental ads on KSL Classifieds and Facebook
Marketplace, both popular places for small-scale landlords to advertise their offerings.
The table also indicates the minimum income a household must make to afford the associated monthly rent
at 1/3 of their income.
F�W or Wr
SgFt Low Rent Avg Rent High Rent 7
tudio 500 $ 700 $ 1,050 $ 1,400
Renter's Income $28,000 $42,000 $ 56,000
49
1 Bed 650 $ 910 $ 1,365 $ 1,820
Renter's Income $36,400 $ 54,600 $ 72,800
2 Bed 800 $ 1,120 $ 1,680 $ 2,240
Renter's Income $44,800 $67,200 $ 89,600
The following table lists current Salt Lake County area median income levels.
Family Size A
1 $71,688 $57,350 $43,013 $28,675
2 $81,938 $65,550 $49,163 $32,775
3 A $92,188 $73,750 $55,313 $36,875
4 WMIN $102,375 $81,900 $61,425 $40,950
9