Loading...
071 of 2017 - Adopting "Growing SLC: A 5 Year Housing Plan" to replace the existing Salt Lake Community Housing Pl 0 17-1 P 17-30 SALT LAKE CITY ORDINANCE No. 71 of 2017 (Adopting"Growing SLC: A 5 Year Housing Plan" to replace the existing Salt Lake City Community Housing Plan) An ordinance adopting the housing plan titled, "Growing SLC: A 5 Year Housing Plan" to replace the existing Salt Lake City Community Housing Plan pursuant to Petition No. PLNPCM2017-00168. WHEREAS, the Salt Lake City Planning Commission held a public hearings on April 26, 2017 on an application submitted by Mayor Jackie Biskupski ("Applicant")to replace the Salt Lake City Community Housing Plan (adopted May, 2000) with a new housing plan titled, "Growing SLC: A 5 Year Housing Plan" (Petition No. PLNPCM2017-00168); and WHEREAS, at its April 26, 2017 meeting, the planning commission voted in favor of forwarding a positive recommendation to the city council on said application; and WHEREAS, the city council has established Guiding Principles for Evaluating and Appropriating City Funds on Housing Developments and included those in the Growing Salt Lake Plan, the city council intends to both measure the success of the city's housing efforts and to appropriate funds consistent with those Guiding Principles; and WHEREAS, after a hearing before the city council, the city council has determined that adopting this ordinance is in the best interest of the city. NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. Adopting the "Growing SLC: A 5 Year Housing Plan". That the housing plan titled, "Growing SLC: A 5 Year Housing Plan" is hereby adopted to read and appear as provided in Exhibit"A" attached hereto. The "Growing SLC: A 5 Year Housing Plan" shall replace and supersede the Salt Lake City Community Housing Plan adopted in 2000. SECTION 2. Effective Date. This ordinance shall become effective on the date of its first publication. Passed by the City Council of Salt Lake City, Utah, this 12th day of December 2017. CHA PE ATTEST AND COUNTERSIGN: CITY RECRIIER Transmitted to Mayor on January 22, 2018 • Mayor's Action: Approved. Vetoed. AYOR CITY RECORDER � V CITY, 4 APPROVED AS TO FORM s Salt Lake City Attorney's Office (SEAL) i�KN.cL____,//' BillNo. 71 of 2017. � Pa C.Niels , e ior City Attorney Published: January 26, 2018. HB ATTY-#62628-v2-Ordinance_adopting_Growing_SLC_5_Year Housing_Plan.docx GROWING SLC • • A FIVE YEAR HOUSING PLAN . . . , .. . . -- - --•;•-•-4 '-;-:: 7 . 311444)740. ,t.j.:•il'1, L'.°. ' 0.. II. _ . • % ' . -'' " '''-'- 1111.11111...1- .. ' -: - '‘-'' ., -`• -'-1.: ..,., ' , , - I .r!lial- '....- '411121.1.111114- -- - - ' • ii:.••;. :lx„ , 1111![,*'.: •, 1 i i . hi 4, 14-•,•411; i 11 e - - —% .1641. r: 7" ii . i! -. -- ; ,, , , .. ft. .... ihrigt6 . - :I- 1 4 :,,i. ,. 4,•- ..,... •_ -• :!' 4111 ,,...4:1''1.". 7. ''.--,.1 11111 ILIIII1 1:1, . 1 - - ., 14, - ,. ., • ' i.:.;.:-•--•-.... 11111116m _ gii, f iii I ,...:' , I.-7-71, - L , • _ , . ,• '-7:. ..--• . • - -,0 • I;?I'i • -.... . . • . . 40,- • " ... .-.. . r_:,-.,r't.' '' --/Iiii: 1 - ':-.- i illt • . . iii,oli i_ , :13,A111:rimi_.111-t- is. . .,. N\:‘,• ,,7 ...ii,.,..1-4.-' ,r'• ',4 .. '-.4 . ..:,.,. . 7_Iln, -.. . . . mo ... 111111111 • i 1 ALI • 't Iti: -..,, • •J• . ' - , — . • 4 I . •••• .,,,,1•131'w. - '••••.1'. . A ".;L: • r 11,14,f,...-, • l'-;• _ I 1- • , - . , .r,... ,•,-• . _.,;:!,,,,, •-,•• 4' , : ,i • •5i•o'Aoki , oil - ••-• tp i _ li 1, • I, 1111 .5....4.11 i III r 'IL I ,....,.,, _ f.• • I I *I - i 1 I ., - , . -, - - --- 0 4 , . . . - ........ it'..„ Salt Lake City .. .:., . .•., r. Housing and Neighborhood Development •••.-,,,,!,,,,,,,,--- GROWING SLC : A FIVE YEAR PLAN J .202 Ik ........ '''''„ Salt Lake City • ! ! 711 14' Housing and Neighborhood Development ACKNOWLEDGEMENTS CITY COUNCIL District 1 —James Rogers District 2—Andrew Johnston District 3—Stan Penfold;2017 Council Chair District 4—Derek Kitchen District 5—Erin Mendenhall District 6—Charlie Luke;2017 Council Vice Chair District 7—Lisa Adams STAFF SUPPORT Michael Akerlow,Deputy Director, Department of Community and Neighborhoods Melissa Jensen,Director,Housing and Neighborhood Development Division Matthew Dahl,Deputy Director,Housing and Neighborhood Development Division Sean Murphy,Policy Manager,Housing and Neighborhood Development Division VODA,consultants,vodaplan.com Mark Morris,Director Laura Bandara,Associate Publication Date:2 Jan 2018 Growing Salt Lake:2018-2022 TABLE OF CONTENTS 1. EXECUTIVE SUMMARY 9 2. GUIDING PRINCIPLES FOR EVALUATING 15 AND APPROPRIATING CITY FUNDS ON HOUSING DEVELOPMENTS 3. RESPONDING TO THE CRISIS: 17 COMPREHENSIVE SOLUTIONS&POLICIES 4. GUIDING POLICY 39 5. HOUSING CRISIS 41 6. SNAPSHOT SALT LAKE CITY 49 7. CONCLUSION 61 APPENDIX 63 APPENDIX A:HOUSING MARKET STUDY APPENDIX B:HOUSING CHOICE SURVEY APPENDIX C: SALT LAKE CITY'S DOWNTOWN RENTAL MARKET: PAST,PRESENT,AND FUTURE APPENDIX D: AFFORDABLE HOUSING FINANCE WORKING GROUP REPORT& RECOMMENDATIONS Growing Salt Lake:2018-2022 6 Growing Salt Lake:2018-2022 A MESSAGE FROM THE MAYOR Driven by the vision of finding opportunity to create housing,which is safe, secure,and enriches lives and communities,my administration's team at Housing and Neighborhood Development has been working to build Salt Lake City's first housing plan since 2000.The result of this work is found here in Growing SLC:A Five Year Housing Plan. Growing SLC acknowledges that it is a moral imperative to ensure Salt Lake City is a community where all people,regardless of race,age,economic status,or physical ability can find a place to call home.We are not simply focused on numbers,but in f �" laying groundwork across the City to support and foster affordable housing. } This five-year implementation plan will help Salt Lake City address the root causes of affordability,create long-term solutions for increasing needed housing supply, and expand opportunities throughout the City,while resolving systemic failures in the rental market,and preserving our existing units. To achieve these critical goals we must reform City practices to promote a responsive,affordable,high-opportunity housing market.This will require bold,but equitable,changes to existing City policies and procedures. If we are to truly make an impact,these must include removing local barriers;which limit density,prohibit needed housing types,and create development burdens.All of this contributes to the supply deficit,and worse,economic segregation in the City. Jacqueline M.Biskupski At the heart of Growing SLC is also opportunity to work with community partners Mayor to design and build new high-quality,innovative,and affordable homes throughout every part of the City.Salt Lake City has a long tradition of working with public and private partners to fund,design,and construct affordable housing,and it is through these partnerships that the goals outlined in Growing SLC will be addressed. Growing SLC affirms Salt Lake City's commitment to equity.To ensure that everyone has access to the housing they need to grow and thrive,the City must empower our residents with the tools and education they need to exercise their rights as renters and homeowners. The true test of any plan lays not in its preparation,but in its implementation. Resolving the crisis will require a community wide effort to embrace change and do what is necessary to ensure that we are always aspiring to be a community of hope,equity,and opportunity. Growing Salt Lake:2018-2022 7 Message from the Housing and Neighborhood Development Division Today,too many in our community are faced with impossible decisions and uncertain circumstances. Households are choosing between food and rent,while feeling the harsh reality of rising housing costs and limited wage growth.In the face of these challenges,Housing&Neighborhood Development(HAND)sees the opportunity to find meaningful and lasting solutions that have the ability to bring stability to all of our residents.That stability,first and foremost,comes from housing that is safe and secure,housing that is affordable,and housing that enriches our communities.We proudly present"Growing SLC:A Five Year Plan Michael Akerlow, Deputy Director 2018-2022"as a response to the challenges of our community and as a reflection Department of Community and of our commitment to our mission of enhancing livable,healthy,and sustainable Neighborhoods neighborhoods. This plan proposes a fundamental shift to how housing is prioritized in the City, as well as a broad restructuring of City process and a commitment to long-term funding.The plan outlines a thoughtful strategy for ensuring long-term affordability and preservation that continues to enhance neighborhoods,while balancing their unique needs.Moreover,it considers that as we grow we must build,but build thoughtfully,in a way that is sustainable,equitable,and durable. Melissa /sen, Director Housing and Neighborhood Over the years,HAND has derived its success and strength from public and private Development Division partnerships that have educated our team,built successful projects,and reached out to help those most in need.The implementation of this plan will require those same partnerships to ensure that we are leveraging the brightest minds and maximizing every dollar.HAND has taken bold steps to address the housing crisis and Salt Lake City is committed to working in a thoughtful and deliberate fashion to ensure that as the plan is implemented our stakeholders guide and inform the Matt Dahl, D puty Director process.We cannot achieve these goals alone and welcome the participation of our Housing and Neighborhood nonprofits,developers,financial institutions,businesses and residents to join us in Development Division making Salt Lake City a place where everyone can live. This plan is an opportunity.An opportunity to respond where the market has failed and to stay true to our values of inclusiveness and innovation.We must embrace the opportunity that exists in the challenges ahead and we look forward to your help,commitment,and partnership over the next five years. 8 Growing Salt Lake:2018-2022 1 . EXECUTIVE S U V VARY Universally,the home is the bedrock upon which every person builds the foundation of their lives. The home is fundamental to establishing roots in a SALT LAKE CITY community and achieving a basic sense of safety,security,and stability for those HOUSING PLAN that live within its walls.It is when these basic needs are met that people have the AT-A-GLANCE ability to take a risk and improve their situations,to contribute socially,culturally, and economically,and build a better community. Policy solutions over the five year period of this In recognition of the role that housing plays in the success of the individual plan will focus on : and the community,this plan is intended to establish that Salt Lake City is a (1) UPDATES TO ZONING place for a growing diverse population to find housing opportunities that CODE are safe,secure,and enrich lives and communities. This plan outlines the (2) PRESERVATION OF LONG- housing solutions through which Salt Lake City will advance this vision. This plan TERM AFFORDABLE imagines a city where all residents,current and prospective,regardless of race,age, HOUSING economic status,or physical ability can find a place to call home. To achieve this goal,the City's housing policy must address issues of affordability at the root cause, (3) ESTABLISHMENT OF A SIGNIFICANT FUNDING creating long-term solutions for increasing the housing supply,expanding housing SOURCE opportunities throughout the city,addressing systemic failures in the rental market, and preserving our existing units. (4) STABILIZING LOW-INCOME TENANTS Salt Lake City is growing. From 2010-2014,the city gained 4,400 new residents, (5) INNOVATION IN DESIGN doubling the pace of growth that was recorded between 2000 and 2010. Estimates anticipate that this growth will continue,adding an additional 30,000 residents (6) PARTNERSHIPS AND COLLABORATION IN by 2030. Salt Lake City's current population of 190,873 people consists of 75,923 HOUSING households. The average household in Salt Lake City includes 2.45 people, with 52 percent of the households being comprised of families. (7) EQUITABILITY AND FAIR HOUSING Salt Lake City's population includes unique characteristics,notably a high proportion of millennials and minority groups and a low proportion of seniors. Post-college aged millennials(age 25-34)account for 21 percent of the population, Growing Salt Lake:2018-2022 9 which is higher than peer cities such as Boise(14%)and Portland(19%)and on par Salt Lake City Residents with cities like Denver and Austin(both 22%). Additionally,minority groups make by Age,2014 up approximately 35 percent of the city's population,of which one-fifth of the total population identify as Latino. The majority of these groups live west of Interstate 18 34 35 44 15. Conversely,Salt Lake City has an unusually low population of seniors,with those age 65 and older only accounting for 10 percent of the population. These demographic characteristics are important to understanding the unique housing 45-64 wants and needs of the population as a whole. Each generation has different <18 ideas and behaviors that influence their decisions at each stage of life,and in the 65+ aggregate create the demand for housing that the city is currently experiencing. Nearly 4 of every 10 Salt Lake City residents is an Salt Lake City is in the beginning stages of a systemic housing crisis that adult millenial (between 18 highlights the shortcomings of the multi-year economic rally. While many factors and 34 years old). have contributed to the housing crisis,at its root is the demand for housing in Source:BBC Housing Market Study, Salt Lake City driving up home prices and rental rates at a faster pace than wage 2016 increases. Between 2011 and 2014,rental rates increased two times faster than the wage increase for renters. Additionally,home sale prices increased four times faster than the wages of homeowners. Unabated,this trend will impact greater numbers of low-and middle-income residents of the city every year pushing out those that make it diverse and dynamic and fill critical roles and occupations in our communities. The growing disparity between wages and rental rates will create greater instability in the lives of low-income households. There is currently a 7,467 unit deficit for the 12,624 residents living in poverty and making $20,000 per year or less. In the absence of these units which provide predictable,affordable housing, people are forced to live in unclean,crowded,and unsafe conditions,or forced into homelessness. These residents require a rental rate of$500 per month or less or the burden of housing becomes overwhelming.Today,49 percent of renters and 22 percent percent of homeowners in Salt Lake City spend more than 30 $ 610 avg. monthly $ 1910/ Salt Lake City Average $ 470 avg. monthly $ 1370/ affordability gap Rents vs. Affordability affordability gap m0 (80%AMI) $ 900/ m0 $ 1300/ (source:CBRE 2016) m 0 m0 Affordable rent for one-person household ■ Affordable rent for four-person household 1 BR Average Rent+Utilities ■ 3BR Average Rent+Utilities 10 Growing Salt Lake:2018-2022 percent of their income on housing. Additionally,24 percent of renters are severely cost-burdened,spending more than 50 percent of their income on housing. For those already living in poverty,being cost burdened by their housing can result in WHAT IS"AFFORDABLE" having as little as$500 remaining each month to cover all other costs,including HOUSING IN SLC? food and healthcare.These groups are also likely to miss rental and mortgage Housing and utilities payments,placing the stability of their home in jeopardy. Such a burden has for a renter and monthly significant impact on children and their lifetime potential for success. Children that mortgage payment and are hungry,move frequently,and experience high stress environments at home housing expenses for a are less likely to perform well in school,which in turn can contribute to the inter homeowner should be less generational impacts of cost-burdened households and poverty. than 300/0 of a household's gross monthly income. The housing crisis also impacts middle-income households. The historically low vacancy rate of 2 percent in Salt Lake City in 2017 has driven prices up in every A single person household in Salt Lake County has an neighborhood. In many cases,middle-income households are forced to make Area Median Income(AMI)of the decision to locate in neighborhoods that they would not otherwise choose, $51,690;the AMI for a family take on greater amounts of debt,or move to another community. In August 2016, of four is$73,800. Salt Lake City conducted the Salt Lake Live Work Survey,which included people that commuted into the city for work. Among these commuters,52 percent Affordable housing for a indicated that they would consider living in Salt Lake City if housing were more single person in Salt Lake City currently earning 60% affordable. Salt Lake City's population grows by 60 percent every day from in AMI,or$41,350,would be a commuters,which creates significant stress on our transportation network and rental costing approximately the environment. Providing more affordable options could greatly reduce these $1,034/month,or a home impacts,which are shared by all residents. priced around$175,000 (est.mortgage$824/mo+ Exacerbating the housing crisis are local barriers to housing development. taxes and insurance). These barriers,such as density limitations,prohibitions on different types of housing,and other development regulations,have contributed in part to a general Affordable housing for a Salt Lake City family of four supply deficit and economic segregation.Many of these regulations were created earning 80%AMI,or$59,050, at a time of population contraction. For example,much of the east side of the would be a rental costing city is zoned for single-family scale development,which significantly reduces the about$1,476/month or number of residential units that can be built and drives up prices for the limited or a home priced around supply that is available. While the current building boom is in part supported $265,000(est.mortgage by improvements in land use regulations that were made throughout the last $1,193/month+taxes and decade,the expanded application of these improvements,as well as further insurance). modernization,is required to reduce local barriers and create more housing opportunities throughout the city for low and moderate income households. The removal of these barriers will not solve the housing crisis on its own. Without Source:Salt Lake County Community well-crafted policies and additional incentives,creating greater flexibility could Resources and Development(2016 Area Median Income). result in the displacement of affordable housing. However,if done correctly,the removal of local barriers is fundamental to opening up neighborhoods with quality infrastructure,as well as strong educational,social,economic,and culture networks Growing Salt Lake:2018-2022 11 and institutions,to low-and moderate-income households. Raj Chetty,a professor of Economics at Stanford University and co-author of"The Effects of Exposure to Better Neighborhoods on Children:New Evidence from the Moving to Opportunity Project;' found that children that move to neighborhoods with less poverty will have a higher earning potential than their peers.While earning potential is not the only measurement of success,it is an indicator that policies that effectuate economic segregation also contribute to inter generational poverty. It's critical that these barriers be removed to create greater opportunity for the residents of Salt Lake City and contribute to further breaking down the systems that perpetuate poverty in our community. In addition to locally created barriers,resolving the housing crisis will also require addressing the economic inequities in the market. This includes providing financial assistance to renters,programs to support home-ownership, financial incentives for developers,and risk mitigation for landlords.The end goal is to decrease the cost of renting or owning a home for low-and moderate-income households and increase the amount of funding they have available for rent and mortgage payments. These fixes are not inexpensive,and will require a long-term and sustainable funding source. The development of such a funding source will require support from the community and a network of committed local partners. The systemic affordable housing crisis has implications for every Salt Lake City resident and business.While the unique needs of our vulnerable population such as those with disabilities,refugees,or people experiencing homeless are not specifically addressed,this plan creates a flexible framework that can address the needs of these groups as they too search for affordable housing options. Resolving the crisis will require a community wide effort to embrace change and develop a willingness to invest a little to change a lot. The following are the housing goals and objectives established in this plan. Through these goals and objectives,Salt Lake City will work to remove local barriers to housing development,address economic conditions that prevent the development and preservation of affordable housing,and support access to affordable housing for all Salt Lake City residents. 12 Growing Salt Lake:2018-2022 Goal 1: Reform City practices to promote a responsive, GOAL 1:INCREASE HOUSING OPTIONS affordable, high-opportunity housing market. GOAL2:AFFORDABLE HOUSIN iimilli Objective 1:Review and modify land-use and zoning regulations to reflect the GOALS:EQUITABLE&FAIR HOU affordability needs of a growing,pioneering city. Objective 2:Remove impediments in City processes to encourage housing development. Objective 3:Lead in the construction of innovative housing solutions. Objective 4:Provide residents,community advocates,business leaders,and elected officials with high-quality data to drive decision-making. Goal 2: Increase housing opportunities for cost-burdened households. GOAL 1:INCREASE HOUSING OPTIONS Objective 1:Prioritize the development of new affordable housing with an GOAL 2:AFFORDABLE HOUSING emphasis on households earning 40 percent AMI and below. GOAL 3:EQUITABLE&FAIR HOUSING Objective 2:Pursue funding for affordable housing opportunities. Objective 3:Stabilize very low-income renters. Objective 4:Secure and preserve long-term affordability. Objective 5:Work with landlords to improve their housing stock and rent to very low-income households earning 40 percent AMI and below. Objective 6:Increase home ownership opportunities. Goal 3: Build a more equitable city. Objective 1:Eliminate incidences of housing discrimination in Salt Lake City. MEObjective 2:Align resources and invest in strategic expansion of opportunity GOAL1: INCREASE HOUSING throughout all neighborhoods of the city and access to existing areas of GOAL2:AFFORDABLE HOUSING El opportunity. GOAL 3:EQUITABLE&FAIR HOUSING Objective 3:Implement life cycle housing principles in neighborhoods throughout the city. Growing Salt Lake:2018-2022 13 SNAPSHOT SALT LAKE: SU V VARY Salt Lake City Residents by Age, Cost-burdened City 2014 Nearly 4 of every 10 Salt Lake City residents r1117111 11111111711 is an adult millennial (between 18 and 34 18.34 35 44 years old).Demand for housing in walkable neighborhoods and non-single family housing types by this demographic will rr 'ff I! iff W If 111 drive the housing market for the next m Wit m m m W. W. 45 64 decade. �, ,�. ,�, ,�, ,�. '�. <18 In addition,similar housing choice preferences If m m If m If m 65+ among the Baby Boomer cohort as they retire II II II II If will put added pressure on urban types of Source:BBC Housing Market Study,2016 housing development. 111 If III If If I f If ICINearly one-half of all renters in Salt LakeII II II II II II II City are cost-burdened,and nearly one- • Wage Increase vs. Home Sale quarter are extremely cost-burdened (spend if Not cost-burdened Price Increase more than 50%of income on rent). 2011-2014 t T Cost-burdened If &Extremely Cost-burdened 33% Homeowners in Salt Lake Cityare increasingly Source:BBC Housing Market Study, cost-burdened.Wages over the last 5 yeagrs 2016 have not nearly kept pace with the average home sale price in the city. Monthly Cost Burden of Housing+Transportation 8% 30 ■ Increase in homeowner With an average annual cost in Utah of more wages than $18,000 to own and operate two cars ■ Increase in home sale prices per household,the option of transit access 40%AMI can have a major impact on the financial Household Source:BBC Housing Market Study, stability of a cost burdened household. It is 2016 imperative that new housing be constructed in the right locations of the city. Salt Lake City Workforce (Source: Utah Business) 63 84% ■ Housing ■ s for 2 Cots Cars ifkil Salt Lake City has a very high in-commuter ■ Remaining budget of the city's total �S2,000/year In-Commuters percentage as a portionY workforce relative to comparable cities.Of 16% those surveyed,52%of in-commuters would consider relocating to Salt Lake City if SLC housing were more affordable.(Salt Lake Residents Live Work Survey,2016) Source:BBC Housing Market Study,2016 14 Growing Salt Lake:2018-2022 2. GUIDING PRINCIPLES FOR EVALUATING & APPROPRIATING CITY FUNDS ON HOUSING DEVELOP V ENTS During the City Council's adoption process for this plan in the fall and winter of 2017,a series of policy statements were developed to guide the City's investments during implementation.The City Council approved these principles with the intent that they will inform and provide guidance to City officials,the community, developers,and all interested parties of the Council's housing priorities when considering the appropriation of any City funds on housing related projects. The following guiding principles will help staff as they consider and evaluate proposals and applications for City housing funds,regardless of the funding source. Growing Salt Lake:2018-2022 15 The Salt Lake City Council will support and fund projects that: 1. Adhere to federal-level efforts to encourage a mix of 11. Utilize City-owned land whenever possible. income in individual projects and neighborhoods. 12. Enable residents'success to maintain housing through 2. Uphold an equitable ratio of affordable to market rate partnerships with providers of supportive services. new units throughout the city.Ideally,projects outside areas of high opportunity should have lower ratios of 13. Support tax increment and neighborhood affordable units. development goals when utilizing RDA money for housing development. 3. Incentivize affordable housing within areas of high opportunity. 14. Identify opportunities to expedite City funded projects that are already in the process. 4. Award funding through a competitive,accountable, fair and transparent process to give all interested 15. Clearly articulate to the community,developers developers,agencies and organizations equal and all interested parties options for funding and opportunity to submit proposals for consideration. collaborating with the City on establishing affordable housing in all neighborhoods. 5. Incentivize the preservation and improvement of existing affordable housing. 16. Identify tools to increase and diversify the total housing supply including housing types that the 6. Create a net increase in affordable housing units private market does not sufficiently provide such as while: family housing in the downtown area,innovative i. Avoiding displacement of existing affordable housing types,missing middle housing and middle-to housing to the extent possible,and low-income apartments. ii.Retaining and expanding the diversity of AMI and innovative housing types. 17. Include affordable housing in transit-oriented developments because access to public transit 7. Keep publicly-funded housing projects affordable as increases access to opportunities.Moderate increases long as possible. in density should be encouraged along transit 8. Create a spectrum of housing options for people of all corridors. backgrounds and incomes. 18. Include innovative parking solutions especially for 9. Collaborate with the private sector to include projects near public transit to bring down construction affordable units in developments that are planned costs so more affordable housing units can be built. or in progress,which otherwise might not have 19. Include quality construction materials,design,and affordable units. incorporate public or private amenities. 10. Include collaboration with community and private 20. Allow and encourage opportunities for projects to sector partners to enable opportunities for in kind remain at least to some extent on the City's tax rolls. contributions,creative financing and service delivery models. 16 Growing Salt Lake:2018-2022 3. RESPONDING TO THE CRISIS: COMPREHENSIVE SOLUTIONS & POLICIES Salt Lake City is witnessing tremendous growth as households are expanding and new housing is being developed. The vision of this plan,that Salt Lake City is a place for a growing diverse population to find housing opportunities that are safe,secure,and enrich lives and communities,recognizes the changing nature of the city,and provides the foundation for creating goals and strategies to manage the housing needs of tomorrow.The following pages outline the housing goals, objectives and strategies through which City departments and divisions,and public and private partners can achieve the outcomes identified in Plan Salt Lake and the Comprehensive Housing Policy adopted by the Council in February 2016. GOAL 1: INCREASE HOUSING OPTIONS: REFORM CITY GOAL 1:INCREASE HOUSING OPTIONS PRACTICES TO PROMOTE A RESPONSIVE, AFFORDABLE, GOAL2:AFFORDABLE HOUSING mil HIGH-OPPORUNITY HOUSING MARKET GOAL 3:EQUITABLE&FAIR HOUSINAI In order to respond to Salt Lake City's changing demographics and the housing needs of its diverse communities,it is critical to begin to look within the City for real and responsive change that will encourage the market to develop the housing and infrastructure needed to accommodate our growing community.This goal focuses on the need to increase the diversity of housing types and opportunities in the city by seeking policy reforms that can enhance the flexibility of the land-use code and create an efficient and predictable development process for community growth. Strategic policy decisions that integrate the transportation system,development related infrastructure,financial institutions,and data,as well as innovative design and construction methods,can break down social and economic segregation,thus building a city for everyone. Growing Salt Lake:2018-2022 17 GOAL1:INCREASEHOUSINGOPTIONS Objective 1: Review and modify land-use and zoning regulations IGOAL2:AFFORDABLE HOUSING to reflect the affordability needs of a growing, pioneering city I GOAL 3:EQUITABLE&FAIR HOUSING Plan Salt Lake's Existing Conditions report shows that the City has not had a significant update to its zoning code since the mid-1990s.Land use decisions of the 1990s came about as a reaction to the gradual population decline that occurred over the preceding three decades.Conversely,the city's population has grown by 20 percent in the last two decades,(the fastest rate of growth in nearly a century) presenting a need for a fundamentally different approach.Household type and makeup has also significantly changed to reflect smaller household sizes in the city. Increasing flexibility around dimensional requirements and code definitions will reduce barriers to housing construction that are unnecessary for achieving city goals,such as neighborhood preservation.A concentrated zoning and land use review is warranted to address these critical issues and to refine code so that it focuses on form and scale of development rather than intended use. 1.1.1 Develop flexible zoning tools and regulations,with a focus along significant transportation routes. In order to respond to the demographic shift described above,modernizing zoning is key not only to catching up with the demand,but creating housing that responds to every stage of life whether just starting out or downsizing later in life. Immediate strategies that will be pursued for greatest impact include improving or expanding on zones that have supported recent housing development, including the Transit Station Area(TSA),Residential Mixed-Use(R-MU),Sugar House Business District(CSHBD),Gateway Mixed-Use(GMU),Central Business District (D-1),Downtown Warehouse/Residential District(D-3),and new form-based zones (FBUN).In addition,there is a need for in-fill ordinances that allow for greater density in existing neighborhoods,offering owners the option to subdivide large parcels to increase the utility and value of their land,removing impediments to innovative construction types,such as accessory dwelling units,and reducing parking requirements to bring down the cost of developing new housing units. Form-based zoning is not the only zoning tool that can support new housing growth,but it has many benefits,including allowing the City and residents to determine what height,depth,and general shape a building should be,thus allowing the private market to decide the best use of that space. Form-based zoning has been piloted in select neighborhoods around the city,including the Central 9th neighborhood,and has proven a successful tool for creating regulatory flexibility that supports new development,while ensuring that neighborhood 18 Growing Salt Lake:2018-2022 character is preserved and enhanced.This has been accomplished by ensuring GOAL 1:INCREASE HOUSING OPTIONS that the form of a building fits into the neighborhood surrounding it,rather than focusing regulation on the specific use of that building as traditional zoning code GOAL2:AFFORDABLE HOUSINGAI requires. GOAL 3:EQUITABLE&FAIR HOUSINAI Expanding this system of zoning with a focus on new residential and commercial development along transportation corridors will allow the private market to fill the housing demand where the city needs it most.To ensure that the maximum potential of these regulatory changes is realized,the City will need to plan,design, fund,and construct the infrastructure that will be required to support the increases in residential density. This will require significant and targeted investment in multiple utility systems and other public improvements. Where possible,the City will seek public-private partnerships to fund the infrastructure improvements. 1.1.2 Develop in-fill ordinances that promote a diverse housing stock, increase housing options,create redevelopment opportunities,and allow additional units within existing structures,while minimizing Tfp�,• neighborhood impacts. In-fill ordinances provide both property owners and developers with options —• =4► to increase the number of units on particular parcels throughout the city.Such options would also help restore the"missing middle housing types where new Encouraging in fill housing like this multi unit building throughout the city means more construction has principally been limited to single-family homes and multi-story people are able to find homes in Salt Lake apartment buildings for decades.Missing middle housing types are those that City.(Image:Atlas Architects) current zoning practices have either dramatically reduced or eliminated altogether: accessory dwelling units,duplexes,tri-plexes,small multi-plexes,courtyard cottages and bungalows,row houses,and small apartment buildings.Finding a place for these housing types throughout the city means more housing options in Salt Lake City,and restoring choices for a wider variety of household sizes,from seniors to young families. Apart from traditional infill ordinances,responding to the unusual age,form,and shape of housing stock should be addressed and leveraged to add incremental density in existing structures.This would include options for lot subdivision where there is ample space to build an additional home on a property or alternatively expand rental opportunities in existing structures.This solution responds to the strong preference for single-family homes that was captured in the Salt Lake Live Work Survey.Allowing land owners to subdivide their large,underutilized lots creates a path to building more single family homes in a city that has limited space left for them under its current land-use regulations. Growing Salt Lake:2018-2022 19 While lot subdivision responds to some of the single-family home demands,the GOAL 1:INCREASE HOUSING OPTIONS expansion of rental opportunities in existing structures is another strategy to IGOAL2:AFFORDABLE HOUSING meet affordability needs and increase access to opportunity.Allowing owners to IGOAL 3:EQUITABLE&FAIR HOUSING subdivide large homes into apartments could be a solution resulting in rent rates closer to$500-$600 per unit based on current market examples.Older homes throughout the city that were dissected into apartments have been grandfathered *PIin through a unit legalization process.The unit legalization ordinance is designed to :44106/ increase the safety of those existing units,not increase the total number of available tr ■ _ units.It allows large homes with existing apartments to become legal if certain criteria are met,but there is no streamlined mechanism that allows additional units to be built within existing structures such as large homes or apartment complexes. Allowing property owners to subdivide those existing structures to add new units Because the land is already owned,the within them could boost the total number of inexpensive rental units on the production cost on these small,inexpensive market without affecting the scale of development in a neighborhood.Such an units is reduced even further,making ADUs the most cost-effective method of new ordinance could actually create more units on the market without demolishing or construction for small housing units.(Image: constructing any new structures. Pacific Residential Mortgage) 1.1.3 Revise the Accessory Dwelling Unit ordinance to expand its application and develop measures to promote its use. Accessory dwelling units(ADUs)will contribute to creating a range of housing options.These units,typically 500-600 square feet in size,fit on existing properties, usually behind single-family homes.The production cost on these small,relatively inexpensive units is reduced,because the price of land is removed from the equation.This model also allows for households to accommodate their changing family needs,perhaps housing a student or aging parent.The City will explore and make recommendations on clear internal processes and potential building plans. The revised ordinance should expand the use of ADUs and create design and approval standards that ensures an ADU integrates within the neighborhood. 1.1.4 Reduce parking requirements for affordable housing developments and eliminate parking requirements in transit-rich,walkable neighborhoods or when the specific demographics of a development require less parking,such as senior populations. The City's parking requirements for new development have been identified by numerous local housing developers as a hurdle to keeping rents low in their projects.Reforming parking regulations has also been identified as a prerequisite for reducing housing costs by policy analysts across the country.The opportunity and construction costs associated with constructing surface or structured parking can be extremely expensive,running as high as$50,000 per parking stall.This expense subsequently adds hundreds of dollars to the rental rates for a 20 Growing Salt Lake:2018-2022 development.This financial impact,paired with Living Space vs. Parking Space financial institutions hesitancy to loan money ,_ on projects with limited parking,will require a Iz o~ -0•. flexible and strategic approach from the City. ' I t'l 1 This means that parking requirements will be o -'I based on the needs of each neighborhood and et 1 I '" I N I. the specific needs of new development based r �' cr- ;, ;., -, on parking demand and incentives.Further,this L. -‘r 14,-iii., = in. „Fa. •J0. same approach will be utilized for transit-oriented _ • �1 development.City parking requirements for r—� j 1 m 'N �o new development in transit-rich areas will be i.0 significantly reduced or eliminated to reduce � V ' ' the cost of construction and ultimately reduce apartment rental prices.In conjunction with the Planning Department's efforts to revise the 2 I I 2 BEDROOM APARTMENT U.S PARKING SPACES parking code,the City will work with developers 900 FT2 INCLUDING AISLES 388 FT' / to explore transit incentives to tenants,such as the HIVE Pass,when parking requirements are Minimum parking requirements focus more reduced. funding and resources towards storing cars than to housing.(Image source:Sightline Institute). Objective 2: Remove impediments in City processes to encourage housing development The City consistently hears that internal permitting and licensing procedures add to the total cost of all projects,especially affordable housing developments.Adjusting this process to incentivize affordable units may serve as an incentive for housing developers to engage with the City on how to integrate affordability into projects. Further,the savings from fee waivers and time could function as a subsidy for some developers,increasing the number of affordable units throughout Salt Lake City. 1.2.1 Create an expedited processing system to increase City access for those developers constructing new affordable units. To encourage the construction of affordable units,the City will create an expedited administrative process that will oversee the permitting,licensing,and inspection process of projects that meet a minimum threshold of long-term affordable units. Providing developers who build affordable units with a fast-tracked permitting process will decrease the cost of those projects,increasing the likelihood that such projects make it to the market. The process will empower the administration with the authority to waive fees and expedite City procedures. Growing Salt Lake:2018-2022 21 GOAL 1:INCREASE HOUSING OPTIONS Objective 3: Lead in the construction of innovative housing IGOAL2:AFFORDABLE HOUSING 111 solutions I GOAL 3:EQUITABLE&FAIR HOUSING Reducing regulation and decreasing processing times are two examples of reform the City needs to lead in,but the value of actually constructing new housing will stimulate local development and cannot be overlooked.One of the most important areas that the government can and should influence the private market is in pioneering technologies that provide a long-term public benefit,but that must first be"proven" Additionally,the City must provide examples of how affordable housing can incorporate high-quality exterior design that is durable,aesthetically appealing,and neighborhood compatible. Quality design is particularly important, because it is often the few poorly designed developments that are remembered and create negative expectations for future developments. 1.3.1 Lead in the development of new affordable housing types,as well as construction methods that incorporate innovative solutions to issues of form,function,and maintenance. Through the City's Housing Innovation Lab,city staff will seek opportunities to incorporate green technologies and innovative construction methods that use fewer natural resources and lower consumer's utility costs when developing new housing units.Additionally,the City will support the development of new or underutilized housing types that meet the unique needs of the diverse communities that live in Salt Lake City.This has already begun with projects that focus on a significant mix of resident incomes and micro-units and could be expanded to include other housing types.Efforts to develop well-designed and well-built homes that serve the changing needs of residents will improve housing choice into the future. The Planning Division and HAND will analyze and recommend processes that may allow the city to be more responsive to changing housing demands and trends so that proposals that fit into a neighborhood are easier to realize.Small lot developments,cottage courts,and tiny homes are examples of housing trends that do not meet current zoning regulations but may be appropriate in some situations. 1.3.2 Establish partnerships with housing industry leaders to construct innovative and affordable developments. Two entities within the City are currently working to fill this need.The Redevelopment Agency has a proven record of utilizing innovative land-use policies,such as the City's Form Based Urban Neighborhood Zone,and working 22 Growing Salt Lake:2018-2022 with private partners to develop new housing types,including accessory GOAL 1:INCREASE HOUSING OPTIONS dwelling units and cottage homes. The City's Housing Innovation Lab located GOAL2:AFFORDABLE HOUSING milin the Housing and Neighborhood Development division also works with public AIand private partners to develop single-family homes and mixed-use projects to GOAL 3:EQUITABLE&FAIR HOUSIN encourage the next generation of housing innovations. In the past year,the Housing Innovation Lab has undertaken a variety of projects with the goal of spurring innovation: - Design Build Salt Lake:Design Build Salt Lake is a partnership between the City and the University of Utah with the goal of building high-quality homes that are sustainable and affordable. As part of the program, students will assess the development potential of small City-owned parcels,prepare construction plans,and work with the City to build new homes. • Emery Passive House:In 2016,as part of the Housing Innovation Lab, Salt Lake City constructed a solar-ready passive home at 381 South Emery Street. The 2,100 square foot home includes four bedrooms,2 Yz bathrooms,and a two car garage. The home also incorporates innovative design features with the goal of minimizing utility expenses. These features include cutting edge insulation products and techniques,and advanced mechanical systems. • Housing Innovation Competition: In 2016,Salt Lake City held the Housing Innovation Competition, which sought two teams to design and build high-quality,innovative,and affordable homes on City-owned property. It is imperative that the City continue to work with its partners to spread the innovative designs and constructions methods that come from their projects,so housing that is sustainable,functional,and affordable can become the standard in our community. Objective 4: Provide residents, community advocates, business leaders, and elected officials with high quality data to drive decision-making In order to measure the success of any of the objectives outlined above and below, the City will need to focus on accurately monitoring and reporting its progress as it implements this plan.Consistent and timely monitoring can also be used to assess impact and necessary changes that may be warranted by evolving market conditions. Growing Salt Lake:2018-2022 23 GOAL 1:INCREASE HOUSING OPTIONS 1.4.1 Maintain a public-facing set of housing metrics to provide insight into market characteristics and the performance of regulatory GOAL 2:AFFORDABLE HOUSING changes that will drive decision making. (GOAL 3:EQUITABLE&FAIR HOUSING Ultimately,this effort will allow the public,advocates,private businesses,and elected officials the ability to participate in and hold the City accountable to this Plan.In order to accomplish this objective stakeholders must have access to meaningful and understandable information such as: The current rate of housing unit production and types of units being produced The change in population and demographics The impact zoning changes are having on housing unit production The citywide Opportunity Index The impact of City investments such as federal grants and the Housing Trust Fund The full cost of purchasing or renting a home GOAL 2: AFFORDABLE HOUSING: INCREASE HOUSING OPPORTUNITIES AND STABILITY FOR COST-BURDENED HOUSEHOLDS This aggressive goal is dedicated to serving and addressing the needs of those most vulnerable in our community.It is driven by a strong belief that housing a- - stability is good for the entire city,adding income to small businesses,creating food stability for children,and allowing residents to enrich their neighborhoods.Salt —IF ar Lake City needs to pursue a combination of strategies outlined in the objectives E G below to achieve this goal.There is no singular initiative that will resolve this crisis, / �i it must be addressed with a range of strategies to best fit the diverse needs of our I— — entire community. ® To that end,over the last several years,City staff has focused on understanding how growth in the local economy has affected its most cost-burdened households.As this understanding grew,the City developed a strategy for allocating federal funds that would result in the greatest impact to these households.That initial effort Providing developers who build affordable culminated in the 2015-2019 Consolidated Plan,"Neighborhoods of Opportunity" units a fast-tracked permitting process will decrease the cost of those projects, Unfortunately,the total amount of those federal grants is insufficient to cover the increasing the likelihood that such projects city's need for affordable housing assistance.What is more troubling is that the make it to the market.(Image:VODA) funds are consistently decreasing. If the City is going to increase the chances that cost-burdened households will weather the housing crisis,it needs to increase funding for housing development, preservation,and assistance programs. 24 Growing Salt Lake:2018-2022 Objective 1: Prioritize the development of new affordable GOAL 1:INCREASE HOUSING OPTIONS housing with an emphasis on households earning 40 percent GOAL2:AFFORDABLE HOUSING AMI and below GOAL 3:EQUITABLE&FAIR HOUSING Recognizing the growing need to identify financing opportunities for new affordable housing,the City convened a Finance Working Group in the Spring of 2016,comprised of experts in the finance and development field,to explore feasible solutions to address the affordability gap for those primarily earning 40 percent of AMI.This resulted in the production of the"Affordable Housing Finance 4111 --, e Working Group Report and Recommendations_The Working Group's report, available in the Appendix,charts the path for increasing primary financing options for affordable housing across a range of possibilities from those that the City rim d rger.,w j can initiate entirely on its own,to those that will require long-term effort.These i recommendations are evident in the following objectives. 2.1.1 Convene a Blue Ribbon Commission for affordable housing 9T"EAST LOFTS AT BENNION PLAZA comprised of industry experts,advocates,partners,and government 444 South 900 East entities. Salt Lake City As discussed earlier,collaboration is a key component of mitigating the housing 54 Affordable Units crisis,as such the need for ongoing community leadership and guidance is critical 68 Total Units to arriving at robust and locally-relevant solutions.Under the Mayor's leadership a Blue Ribbon Commission,comprised of policy and industry leaders,will evaluate The 9th East Lofts at Bennion the best ways in which to leverage a variety of resources,while focusing on some of Plaza,in which 80%of units the city's most challenging housing issues.This group will also be able to look at the are affordable,opened in 2017. issue without geographical constraints,cultivating partnerships across jurisdictions Located just steps from the and with a variety of public and private organizations. 900 East TRAX station,and in walking distance of shops and 2.1.2 Consider an ordinance that would require and incentivize the restaurants,the 9th East Lofts inclusion of affordable units in new developments. at Bennion Plaza are midway between Downtown and the The need for large scale inclusion of affordable housing has driven the exploration University. of an inclusionary zoning (IZ)policy.Such practices fit into a larger theme surrounding a comprehensive strategy to increase affordable housing and increase Salt Lake City's Housing Trust the available housing stock across the"affordable"spectrum.Inclusionary zoning Fund provided a$750,000 programs refer to local land use ordinances that require or encourage developers loan to develop this apartment to include affordable units in new residential developments,either applied to an complex. entire city or focused on a distinct geographic area.Affordability is often achieved through an indirect subsidy to residential developers—including through increased Image:Method Studio development capacity or other accommodations during the development review Growing Salt Lake:2018-2022 25 GOAL 1:INCREASE HOUSING OPTIONS process—and therefore the public cost of generating affordable homes can be relatively low.HAND's staff produced an analysis(see full report in the Appendix) GOAL 2:AFFORDABLE HOUSING of how an inclusionary zoning program may be structured;the analysis identified GOAL 3:EQUITABLE&FAIR HOUSING the need for an incentive to be paired with any requirement therefore easing the financial burden on developers while increasing the likelihood for partnership. This strategy could eliminate the common criticisms of inclusionary programs related to slowing overall development and unduly increasing costs for developers who simply pass those costs on to consumers.The Division is also researching options that would focus inclusionary requirements on city-owned properties,or designated target areas,such as Redevelopment Agency Project Areas.Any future inclusionary program could also feature a payment in-lieu of construction option. 2.1.3 Offer incentives to developers of affordable housing such as land discounts and primary financing options. Many of the primary financing options for affordable housing,such as tax credits and loan programs,are not meeting current funding needs.While the Salt Lake City Housing Trust Fund plays a critical role by providing low interest debt,the need for affordable housing funding continues to increase overall.As the strategies in this plan are deployed,funding sources will need to increase their capacity and their flexibility in order to incentivize new development.In addition to conventional financing,the use of land"write-offs"and other non-traditional methods of incentives will be incorporated when developing available City-owned land.While this is a common practice of the RDA and HAND,the practice will be expanded and policy should require long-term affordability and increased affordability compliance measures.To strengthen the leveraging of City land,the following will be considered: 1)a policy that requires affordable housing to be evaluated in surplus land disposition,which could include development requirements and/or allocation of proceeds from sale to the Housing Trust Fund;and 2)taking a more proactive surplus property approach which would involve an analysis of the whole portfolio of City-owned land and prioritization of parcels best for housing;and 3) evaluating if additional city staff or resources are necessary to maximize leveraging City lands and assets. Objective 2: Pursue funding sources for affordable housing opportunities There is no greater need than to identify a long-term sustainable and predictable funding source.There is no one-size-fits-all approach to addressing the housing crisis.A diverse set of tools and menu of options is needed.There is no current 26 Growing Salt Lake:2018-2022 policy or subsidy that has the capacity to address the affordable housing GOAL 1:INCREASE HOUSING OPTIONS crisis.If this is neglected it will result in a deepening crisis that will have lasting consequences.Current financing programs,like the tax credit program and grants, GOAL2:AFFORDABLE HOUSING are insufficient to meet demand and are a diminishing pool of resources with GOAL 3:EQUITABLE&FAIR HOUSING extremely burdensome regulatory barriers.This environment drives the objectives below,which target not only a funding source,but a new way of deploying resources quickly and efficiently to meet the unique needs of current and future residents. 2.2.1 Propose a significant,long-term,and sustainable funding source for the development,preservation,and stability of affordable housing. A local funding source,as identified in the Affordable Housing Finance Working Group Report(Appendix D),needs to be designed in a way that could subsidize new units under an inclusionary program,infuse the Housing Trust Fund's loan program with capital,purchase and preserve vacant land for future affordable development,offer program assistance,or purchase dilapidated properties for housing redevelopment projects.Most importantly this funding source would target the difficult task of stabilizing current cost burdened households through an incentivized rent assistance program(this is further outlined in Objective 3). Such a pool of funding would provide a significant investment that could be structured into a long-term and sustainable fund.Throughout the country,there are a range of options that have been effective tools for increasing local affordable housing funds,from relatively simple real estate transaction fees or short term rental fees to more time and resource intensive options,such as impact fees,bonds,or a levy.No matter which specific initiative these funds would be focused on,it would provide an immediate boost to closing the current affordability gap and providing housing to those households earning 40 percent AMI and less. 2.2.2 Pursue legislative change at the state and federal level that would create opportunities for new incentives and revenue sources. While Salt Lake City is committed to addressing local issues,there is a realistic understanding that there is a shortage of affordable units in many Wasatch front cities and across the state.To this end there are several mechanisms that should be approached as long term legislative actions,including: • Tax abatement allowing the City to issue a reduction of a developer's taxes if that developer constructed a certain percentage of affordable units within their project. This could effectively reduce or refund the additional cost associated with constructing the affordable units. • An impact fee for affordable housing that assesses the impact that new, Growing Salt Lake:2018-2022 27 large construction projects have on overall housing affordability and GOAL 1:INCREASE HOUSING OPTIONS impose a fee on that new development to offset that impact.These fees GOAL2:AFFORDABLE HOUSING are calculated and assessed for other impacts that new growth has on the city,such as streets,parks,police and fire. fGOAL3:EQUffABLE&FAIRHOUSING • Real estate fees which could consist of a flat fee that generates ongoing revenue to offset the cost of affordable housing.These fees are widely used throughout the nation to mitigate the effects of housing booms. Communities such as Philadelphia,PA and St.Louis,MO charge fees ranging from $50-100 for recording certain real estate documents,which generates several million dollars annually. It a ® • State and federal advocacy to increase funding available to cities for —I' IWO i ' = affordable housing development and supportive services for residents. Any of these initiatives would require legislative action,and therefore,a coordinated 616 LOFTS effort with legislators,municipalities and public partners.These efforts will be 616 South State Street worked on in collaboration with the Blue Ribbon Commission and the legislature as Salt Lake City a whole. 274 Affordable Units 274 Total Units Objective 3: Stabilize very low-income renters Situated south of the Since there has not been an increase in wages that matches the increase in cost downtown business district, 616 Lofts opened in 2017. of living the need for additional resources to stabilize very low income renters(40 percent AMI)is a critical piece of a comprehensive solution.Historically,the primary The 616 Lofts are two blocks source of stabilization has been the Housing Choice Voucher program,and while from the Courthouse TRAX it is the foundation of support for those on fixed incomes,the elderly,and many stop,and along bus routes with 15 minute headways. with disabilities,it is also clear that the federal requirements demand a great deal of administration. Additionally,the application of vouchers is not responsive to our Salt Lake City's Housing Trust local market,and residents can wait years to access this benefit as the availability Fund provided a$1,000,000 of vouchers is incredibly limited,therefore the need for a new,outcome based and loan to develop this affordable apartment complex. innovative method of stabilization is long overdue. Image:Wasatch Group 2.3.1 Work with housing partners and government entities to create an incentivized rent assistance program. This strategy gets to the heart of program creation and innovation,assisting families and working with partners to ensure responsiveness to the needs of those seeking assistance through a robust rent assistance program.Under the direction of this strategy the City could utilize its own source of funding,creating guidelines tailored to meet the needs of Salt Lake City residents,taking into account the housing needs,gaps that exist in the community,and the current housing market. The program would have flexibility in a way that incentivizes economic mobility for program participants and reduces dependence on such assistance.It would 28 Growing Salt Lake:2018-2022 also allow recipients to live in areas of high opportunity.This would provide people GOAL 1:INCREASE HOUSING OPTIONS with the opportunity to locate closer to schools of their choosing,their workplace, healthcare facilities,or other amenities that match their needs.The success of such GOAL2:AFFORDABLE HOUSING a strategy would be dependent on identifying a long-term,sustainable funding GOAL 3:EQUITABLE&FAIR HOUSING source,as outlined in 2.2.1,or other innovative funding strategies,such as creating single-property owner Community Reinvestment Areas to provide tax increment reimbursement and reduce the cost of building new supportive housing. Home Repair Program 2.3.2 Work with housing partners and government entities to continue Salt Lake City offers home supporting and enhancing service models that meet the needs of repair loans and technical assistance to homeowners the City's most vulnerable households. and investors within the city. The images below illustrate Some very low income renters will need intensive resident services to find stability the positive impacts the and thrive in housing.This is especially true for people entering supportive and program can achieve for residents and neighborhoods. permanent supportive housing,who require regular,ongoing care and counseling. Similarly,some residents earning above 30 percent AMI may benefit from less Before frequent,"light-touch"support and home visits. Alkb- As the City works with its public and private housing partners to expand housing opportunities for very low income households,it needs to work with the city's I GII4 service provider network to ensure their needs are understood and met. Objective 4:Secure and preserve long-term affordability After As a result of low vacancy rates,rising housing costs,and flattening wages it is not ! only necessary to create new affordable housing units,but also preserve them in 0 I H the long term.This need is described in Kem C.Gardner Policy Institute's report l ® N. on the downtown rental market,which details the tremendous growth of real - — estate prices downtown,property that is now the most expensive in the state. Downtown also has the densest allowed zoning,the best access to transit,and the greatest number of amenities,making it an ideal location for affordable housing development.However,without tangible preservation tools,existing housing affordability is at risk of being lost amidst one of the greatest construction booms Salt Lake City has seen. 2.4.1 Create an Affordable Housing Community Land Trust. In order to preserve the ability to develop affordable housing in the future,the City will create a Community Land Trust and work with its institutional partners to purchase land and entrust it for future development.This will ensure that as values continue to rise,there will still be land available to build new affordable housing as Growing Salt Lake:2018-2022 29 the City grows.This mechanism preserves affordability in perpetuity in a way that GOAL 1:INCREASE HOUSING OPTIONS also ensures housing stock (single and multi-family)is maintained and well taken GOAL 2:AFFORDABLE HOUSING care of through formalized partnerships. 10AL 3:EQUITABLE&FAIR HOUSING 2.4.2 Work with community partners and government entities to acquire hotels,multi-family properties,and surplus land to preserve or redevelop them as affordable housing. The most cost-effective means of adding new affordable units may be to purchase existing multi-family structures,either hotels and motels or apartment complexes, renovate or redevelop those units,and partner with a local housing operator to manage the properties.Vacant,abandoned,and underutilized properties pose safety risks to the public,place a strain on the City's resources,and detract from neighboring property values.The City will identify these properties and purchase them for redevelopment,while preserving long-term affordability.The City will also explore opportunities to acquire or partner in the redevelopment of aging public housing facilities and tax credit funded developments that are nearing the expiration of their affordability restrictions. Additionally,the City will work with government partners to prioritize affordable housing development and contributions to the Community Land Trust whenever appropriate federal,state,or county surplus land is dispossessed within Salt Lake City. 2.4.3 Structure renovation programs to reduce utility,energy,and maintenance costs while promoting healthy living. As the housing stock continues to age,especially for homeowners,rehabilitation and energy efficiency upgrades will be central to long term community preservation. The City's home repair programs provide efficiency upgrades that decrease the long-term cost for households earning modest incomes.Continued development of these programs can bring stability to households whose utility bills fluctuate considerably over the course of the year as the seasons change.The expansion of these programs will be essential in improving and maintaining Salt Lake's multi-family and single family units. 30 Growing Salt Lake:2018-2022 Objective 5:Work with landlords to both improve their housing GOAL 1:INCREASE HOUSING OPTIONS stock and rent to very low-income households GOAL2:AFFORDABLE HOUSING GOAL 3:EQUITABLE&FAIR HOUSING Throughout Salt Lake City,the age and condition of the housing stock is varied with some rental properties being maintained and improved,while others slowly deteriorate causing blight,vacancy and increased crime.Poorly-maintained properties are typically rented at lower cost and serve a lower-income population making them de facto affordable housing.However,this stock is not rent- restricted and may become unaffordable overnight through changing market conditions and ownership.In addition,such properties are often rented at lower St.Vincent de Paul costs serving a low-income population while the conditions of the units are not Housing Workshop suited for habitability.This issue is complex as renovation can increase rents and therefore displace current tenants however,the current condition merits significant November 15,2016 improvement to be habitable.In order to begin to address a few of these issues the "We're in a tough position.My following objectives lay out some alternative methods for both serving low-income daughter collects disability and renters and improving housing conditions. I am her full time caretaker,so I can't hold down a regular job. With her disability payment 2.5.1 Support and potentially expand incentives for landlords to rent low- alone we could just about income households,including landlord insurance programs. afford rent,but not first and last month's rent on top.Or a Based on both the number of currently homeless individuals in the city and the security deposit.If we got help with those,we wouldn't be out feedback provided through a workshop at St.Vincent's in 2016,there is a great here on the street" need for more housing options,specifically for those exiting homelessness.The need for affordable options,outside of new development,but within existing -Workshop Participant neighborhoods is a key piece of equitable distributions of housing and access "Why is it that most to opportunity.While community partners have long developed relationships [apartment]complex or private with landlords there is further opportunity to increase those willing to rent to owners refuse to overlook an eviction?They act like it is your low-income and formerly-homeless populations while also improving the current fault.Nobody is willing to even condition of their property.This may be most propelled by the creation of a consider giving you a second landlord insurance program that covers possible damages and other related costs chance.The biggest problem is when most people hear that to ease concerns as they relate to individuals who may traditionally be considered you live at the Road Home they hard to house.Adding the incentive of rehabilitation or repair can be used as an automatically look down on engagement and educational opportunity to increase understanding of those who you,they look at you like you're garbage" are in most need of housing. -Workshop Participant 2.5.2 Enhance neighborhood development programs to entice landlords of substandard properties to improve their rental units. Home repair programs like the one the City operates can be marketed specifically towards landlords whose properties are in need of improvement.In practice, these two concepts would pair nicely together,creating incentives for property Growing Salt Lake:2018-2022 31 improvements and gaining a larger pool of tenants for landlords who are willing to GOAL 1:INCREASE HOUSING OPTIONS provide rentals to previously-homeless tenants. Partnering with service agencies GOAL2:AFFORDABLE HOUSING and engaging landlords through the process will be a critical piece of expanding 10AL 3:EQUITABLE&FAIR HOUSING this program. In addition,the program will be geared toward landlords who own properties in specific neighborhoods,streets,or nodes where additional City investment is already planned specifically in accordance with Master Plans thereby magnifying the overall impact of efforts in the target area.This process is directly related to the objective of aligning resources to create Areas of Opportunity in Goal 3. Objective 6: Increase home ownership opportunities As mentioned throughout this plan,Salt Lake City has become an increasingly difficult market in which to purchase a home,quickly becoming out of reach for anyone making less than area median income.One of the underlying issues here is that,along with the compounding effects of longer commute times and increased burden on infrastructure and resources,first-time homebuyers who move out of the city due to affordability may never return.The objective below is designed to increase accessibility to homeownership and provide a pathway for families to stay in Salt Lake City. 2.6.1 Increase funding,marketing,and partnerships that will lead to more affordable homeownership programs within the city's network of homeownership partners. As noted in the Salt Lake Live Work Survey the primary reason for leaving the Capitol City was related to housing and homeownership options and affordability. Therefore,the increase in funding should be leveraged through an increase in down payment assistance and through additional access to permanent mortgages. Currently,there is a strong infrastructure of agencies that administer housing programs and such partners should be used to expand their current programs, explore new and diverse ways of making homeownership more accessible,and increase visibility of those programs throughout the city.In addition,both the City and partners should look to the land trust model to ensure long-term affordability as it applies to homeownership.This approach will ensure that investment benefits generations to come. 32 Growing Salt Lake:2018-2022 GOAL 3: EQUITABLE& FAIR HOUSING: BUILD A MORE GOAL1:INCREASE HOUSING OPTIONS EQUITABLE CITY G (11111. GOAL 3:EQUITABLE&FAIR HOUSING Equity is not only about eliminating discrimination,it is also about increasing access to opportunity.One of the guiding principles of Plan Salt Lake is to create an equitable city by ensuring"access to all city amenities for all citizens while treating everyone equitably with fairness,justice,and respect"The City will accomplish this by working to eliminate housing discrimination,strategically investing in neighborhoods that stand the most to gain,and building a city that meets needs of a diverse population. Actively working to eliminate discrimination in housing is not only a standard that Salt Lake City holds itself to,but it is also a requirement under the U.S.Department of Housing and Urban Development(HUD)administrative ruling of 2015,the Affirmatively Furthering Fair Housing rule(AFFH).The City will need to focus on both identifying discrete acts of discrimination against protected classes,such as documented instances of housing discrimination against persons with disabilities, and policies that create a structure of discrimination,such as residential zoning practices that eliminate the opportunity for low income households to live in high opportunity neighborhoods. Meeting the City's requirements under the new ruling will help sustain the ongoing effort to create new high-opportunity neighborhoods,which will require alignment across the City's Departments and Divisions.Concentrating the City's investment and its institutional partners'investments in neighborhoods and nodes within those neighborhoods will yield a greater impact with finite funding.Spreading the concept of equity to new development and infrastructure investment also means integrating Life Cycle Housing(creating neighborhoods that accommodate every stage of life). Objective 1: Eliminate incidences of housing discrimination in Salt Lake City Discrimination grows when market conditions increase competition among renters, and competition is strong and on the rise in Salt Lake City.The Policy Institute reports the competition among new and existing units is incredibly strong:citywide vacancies rates are around 3 percent while vacancy in new construction is below 2 percent.Working to increase the housing supply will help decrease competition over time,which may reduce instances of discriminatory housing practices in the long-term,but there are distinct actions the City will pursue to make a direct impact on reducing discrimination. Growing Salt Lake:2018-2022 33 3.1.1 Utilize data and evaluation efforts developed by partner GOAL 1:INCREASE HOUSING OPTIONS organizations about housing discrimination to meet the City's SING requirements under the Affirmatively Furthering Fair Housing GOAL 3:EQUITABLE&FAIR HOUSING ruling. While Salt Lake City's plan to respond to the Affirmatively Furthering Fair Housing ruling is not due during this plan,it is imperative that actions are undertaken to Affirmatively Furthering Fair Housing(AFFH) understand current discriminatory practices and evaluate ways to reduce their occurrence.Equity can be established are through policies and zoning as laid out Interpretations of the recent earlier in this plan.During the implementation of this plan special attention will be AFFH administrative ruling and paid to: experts on the Fair Housing Act of 1968 point to evidence • Ensuring that local zoning policies do not create segregation that economic and racial • Creating affordable opportunities in high-opportunity neighborhoods segregation existing within • Directing resources to invest in the lifting up of traditionally low-income America's housing market neighborhoods today are largely an outcome of zoning policies enacted in • Utilizing local data about instances of discrimination to steer policy the 1950s and 1960s. making One of the most powerful • City staff receives the necessary training to identify discriminatory housing tools that localities—cities practices and work with community partners to reduce such practices and towns—possess is zoning control.Since its inception, These efforts will go a long way to increasing access and creating a more equitable zoning has been an effective city.To accomplish this there must be a deepening of the City's relationship with means of eliminating the local partners,currently working on housing discrimination. opportunities for low-income residents to live in high- 3.1.2 Work with partners to enhance awareness and resources around opportunity neighborhoods. tenant rights and responsibilities. This clarification on the 1968 law asserts that simply Another key aspect of promoting equity is ensuring the community understands providing protections for individuals who traditionally and is empowered to expose discriminatory practices and defend their rights as face discrimination is tenants.The importance of this was made abundantly clear through the comments, insufficient in eliminating questions,and stories that were expressed by the attendees at the housing discriminatory practices. workshop held at St.Vincent de Paul,who were primarily those experiencing Municipalities must prove homelessness.Through the input provided at the workshop,several specific that they are actively working to identify and eliminate areas of education were identified as being needed,including how to qualify for discriminatory housing programs,what to do in the face of eviction,and tenant rights and responsibilities. practices. The City will coordinate local service providers to help inform and guide tenants about their rights and responsibilities.City employees and service providers would then be able to also provide information about services available throughout Salt Lake County that support tenants while also directing individuals to active lists of available properties. 34 Growing Salt Lake:2018-2022 Objective 2:Align resources and invest in strategic expansion GOAL 1:INCREASE HOUSING OP11ONS of opportunity throughout all neighborhoods of the city and G (11111. access to existing areas of opportunity GOAL 3:EQUITABLE&FAIR HOUSING The City is in the unique position of having acquired a depth of knowledge about neighborhoods and possesses the ability to direct funds to produce the greatest impact in those neighborhoods.A key priority in alignment of resources is ensuring that they create opportunity in under served neighborhoods or conversely create access to neighborhoods considered areas of opportunity,where residents have access to jobs,healthcare,education,transportation,and other amenities. 3.2.1 Align financial resources to increase opportunity in neighborhoods that score below 4.0 on the Opportunity Index's 10 point scale. Access to jobs,quality education,healthcare,fresh food,transportation,and other amenities is key to unlocking the potential of the city's residents to succeed economically.Unfortunately,these opportunities are not available in every neighborhood in the City.To address this geographic inequity,the City will align its resources to achieve significant and impactful change within specifically targeted areas of concentrated poverty.Funding through Community Development Block Grants,Capital Improvement Program,Impact Fees,RDA tax incentives,and a sustainable housing funding source should all be employed in creating access to opportunity in all neighborhoods throughout the City.This investment strategy is intended to increase access to opportunity,and ultimately improve the lives of the residents that live in the target areas.In addition to this long-term strategy,the City will also seek to encourage and fund the development of new affordable housing units in neighborhoods that are already considered areas of opportunity.Recent studies have shown that relocating a child from a low-opportunity neighborhood to a high-opportunity neighborhood can significantly increase their earning potential over their lifetime.In light of this finding and others like it,the City should strive to be a community where the success of an individual is not determined by their address,but on the merits of their effort. 3.2.2 Make strategic affordable housing investments in high opportunity neighborhoods. The City and its housing partners will need to take an active role to promote affordable housing options in certain areas of the city where affordable options are especially challenging to create.Those neighborhoods scoring high on the Opportunity Index(4.0 out on a 10 point scale)have higher than average land costs,therefore requiring additional subsidies to build affordable housing units. Growing Salt Lake:2018-2022 35 GOAL 1:INCREASE HOUSING OPTIONS In order to capitalize on the amenities these neighborhoods present,the City and its partners must be willing to invest in these areas with targeted policies and SING resources that promote affordable housing. GOAL 3:EQUITABLE&FAIR HOUSING To encourage more housing in these neighborhoods,the City will review its regulatory and acquisition policies for ways to attract more affordable development and purchase land for the Community Land Trust. 3.2.3 Work with partners at the Kern C.Gardner Policy Institute to produce an updated Opportunity Index assessment as a tool for guiding City investment. Understanding how and where opportunity is will drive how alignment should be implemented.Further,identifying which community assets should be built, leveraged or enhanced is a process that should be driven by residents and the community partners.In 2013,James Wood of the University of Utah led a study that mapped finite details about housing and opportunity in Salt Lake County. Part of this process was developing an Opportunity Index"to quantify the number HOUSING LIFE CYCLE of important liabilities and assets that influence — the ability of an individual,or family,to access and Single H . L . �L :: �:1 capitalize on opportunity"An update will be necessary • e • young ii■ a i■ n �_/nn/����_ ®®A ®® adult ■■ ■■ an Oa ■■� in order to track the impact of alignment efforts and Family �� " "W al " " to help neighborhoods identify which primary asset opportunities are missing. Young flit I couple ®® ®® I I u Objective 3: Implement Life cycle Housing ® ® ® rit ® ® in nei neighborhoods throughout Older ® i m principles g g couple 8, ®, 1® the city Family with 3 children ra :: ::1 Salt Lake City should be a place where residents are Family with 1 child not stifled in their housing choice,because certain neighborhoods are not conducive to their stage of life. Life cycle housing seeks to provide housing The goal with this objective is to enable a diversity of choice for all residents,for all phases of their housing types that responds to housing needs,allowing lives,within each neighborhood.(Image individuals to stay in their communities as their housing needs evolve. source:VODA) The Kem C.Gardner Policy Institute's demographic projections show a growing senior population statewide,and while we know from the housing market study that Salt Lake City's percentage of seniors(10%of total population)is relatively low compared to other municipalities in the state,the City will begin anticipating the needs of a growing senior community.However,seniors are not the only 36 Growing Salt Lake:2018-2022 population that is demanding a different type of housing.Across the country GOAL 1:INCREASE HOUSING OPTIONS there are trends for micro housing,community style living,generational housing to accommodate aging parents,and intentional community and living space that co-exist(like a day care in a Senior Center).There is not one way to achieve life cycle GOAL3:EQUITABLE&FAIR HOUSING housing,but infinite possibilities and it is the goal to engage the community in way that not only fosters the possibility,but creates policy that allows for the building. 3.3.1 Support diverse and vibrant neighborhoods by aligning land use policies that promote a housing market capable of accommodating residents throughout all stages of life. In order to truly encourage new types of housing that considers cost,energy efficiency,and accessibility a strong land use and zoning foundation must be laid that supports new types of building.The City must also understand how the type of housing being produced and home prices align with changing household dynamics.An understanding of housing demand and gaps in the housing market will inform land use decisions and priorities,including the disposition of City- owned property. As resources are aligned a program will be structured that encourages new ways of adaptive re-use or new build through the use of City-owned land and request for proposals.This shift in programming will also closely align with the Housing Innovation Lab as life cycle housing is not just applicable to low-income populations,but for every resident in the City. Growing Salt Lake:2018-2022 37 38 Growing Salt Lake:2018-2022 3. GUIDING POLICY The goals,objectives,and strategies outlined in this plan were developed using a combination of public input,professionally generated data and analysis,and PLAN SALT LAKE existing housing policy. The primary sources of current policy are Plan Salt Lake and the Salt Lake City Comprehensive Housing Policy.The following is a summary HOUSING INITIATIVES: of those two documents: 1.Ensure access to affordable housing citywide(including Plan Salt Lake rental and very low income). 2.Increase the number of Plan Salt Lake was adopted by the Salt Lake City Council on December 1,2015 and medium density housing types sets a citywide vision for Salt Lake City for the next twenty-five years.It considers and options. where we are as a city,where we want to be,and establishes the framework for 3.Encourage housing options decision making that will get us there.The plan is a result of consolidated existing that accommodate aging in City policies and input gathered from thousands of city residents and visitors, place. leaders,business owners,experts,and concerned citizens.The plan sets the stage 4.Direct new growth for future neighborhood,community,and city system plans to address how they toward areas with existing will each contribute to the established 2040 Vision for Salt Lake City. infrastructure and services that have the potential to be Plan Salt Lake establishes a guiding principle for housing that seeks to achieve, people oriented. "Access to a wide variety of housing types for all income levels throughout the 5.Enable moderate density city,providing the basic human need for safety and responding to changing increases within existing demographics: neighborhoods where appropriate. The plan also sets the following 2040 Targets specific to housing: 6.Promote energy efficient housing and rehabilitation of 1. Increase diversity of housing types for all income levels throughout the existing housing stock. city. 7.Promote high density 2.Decrease percent of income spent on housing for cost-burdened residential in areas served by households. transit. 8.Support homeless services. Growing Salt Lake:2018-2022 39 Salt Lake City Comprehensive Housing Policy The Salt Lake City Comprehensive Housing Policy was adopted on March 1, ` 2016. The Housing Policy represents the City Council's efforts to establish a 4 � - policy direction to address current conditions in Salt Lake City. The intent is that this direction will be followed whenever the City engages in housing funding assistance,zoning and land use planning,master planning neighborhoods,and ;► creating economic incentives. Additionally,the Housing Policy is intended to achieve the following: Focusing housing density around rail and 1.Foster and celebrate the urban residential tradition; bus transit facilities can have many positive impacts on the city,as well as on individual 2.Respect the character and charm of predominantly residential districts, households.(Image:VODA) including those with historic character and qualities,while also providing opportunities for the provision of local goods and services easily accessed by neighborhoods; 3.Promote a diverse and balanced community by ensuring that a wide range of housing types and choices exist for all income levels,age groups, and types of households; 4.Develop new housing opportunities throughout the City; 5.Ensure that affordable housing is available in all neighborhoods and not concentrated in a few areas of the city; 6.Emphasize the value of transit-oriented development,transit accessibility, and proximity to services; 7.Recognize that residents,business owners,and local government all have a role to play in creating and sustaining healthy neighborhoods; 8.Create an appropriate balance of rental and ownership opportunities in neighborhoods without jeopardizing an adequate supply of affordable housing; 9.Strongly incentivize or require the use of green building techniques and sustainability practices in public and private housing developments; 10. Examine the changing needs of Salt Lake City's population,and develop and maintain reliable demographic information to support housing policy and residential development; 11. Consider the needs of multi-generational households and ensure housing products are available to meet those needs. 12. Address the livability of neighborhoods and concentrations of ageing adults,and plan and implement strategies that will allow residents to Age in Place. 40 Growing Salt Lake:2018-2022 4. HOUSING CRISIS Salt Lake City has been experiencing an unprecedented multifamily residential _ T* boom since the end of the Great Recession.Between 2010 and 2020,there , '0 .c will be nearly as many apartment units built in the downtown area than h r ` in the previous 100 years.According to the Ivory-Boyer Construction Report 3 II and Database,in 2016 nearly 3,000 multi-family apartment units were permitted. Vacancy rates are also at an all-time low,hovering around 2 percent,with little indication that they will raise in the near future.Even with the increase in the ,,,� inventory of apartments,rental rates are exceeding $2 per square foot.According to ' ' I• i ■" the October 2016 Research Brief written by James Wood from the Kern C.Gardner -- Policy Institute at the University of Utah,new downtown apartments have the A recent study suggests the boom in highest rents in the state:the average rent for a studio is$1,000,$1,100 for a one construction of new rental housing units in bedroom,and $1,450 for a two-bedroom unit.This tremendous growth is resulting downtown Salt Lake City will continue over the next five years.(Image:VODA) in an increasingly vibrant city in which a growing number of people want to live, but only those with high incomes can afford. 7,500 households in SLC need help paying rent However,while the market rate apartment inventory continues to grow, affordable multi-family is at a net loss,even with the addition of new units. Many existing affordable units throughout the city are being leased at higher rental rates due to market demand,or in the fastest growing areas of the city,such as Downtown and Sugar House,they are being sold and converted to housing for those with higher incomes. In 2013,a Salt Lake City Housing Market Study and Gaps Analysis was completed by BBC Research primarily using Census and American Communities Survey data from 2000-2010.In addition to reporting 1213 demographic data and trends in Salt Lake City,this study identified a gap of approximately 8,200 rental units for those at 40 percent or below of area median Annual Income Range income.An updated Market Study and Gaps Analysis was recently completed using • Under$5000 $10.000-$14.999 2010-2014 data that indicates a rental housing shortage of approximately 7,500 • s 5000-s 9,999 15.000-s 20.000 units in Salt Lake City for those making$20,000 or less a year.This decrease is not Source:BBC Housing Market Study,2016 Growing Salt Lake:2018-2022 41 WHAT IS A"COST-BURDENED HOUSEHOLD"? A household spending 30 percent or more of its entire income on total housing expenses—rent/mortgage,basic utilities, and property taxes— is considered"cost burdened."A household spending 50 percent or more of its entire income on housing is"severely cost burdened" 49 percent of all renters in Salt Lake City are cost burdened and 23 percent of all renters are severely cost burdened. In comparison,22 percent of all homeowners are cost burdened and only 8 percent are severely cost burdened. a result of new affordable housing units,but is due to a slight increase in incomes between 2011 and 2014. The development and preservation of affordable housing is one of the most pressing and complicated issues facing not only Salt Lake City,but the nation as a whole.And while it is a conversation that is continuing both at federal and local levels,funding resources continue to be jeopardized and,in many cases, decreased.Salt Lake City has proven itself as a leader in creative and thoughtful ways to address its housing shortage through stronger relationships with the for- profit and non-profit community,financing organizations,and advocacy groups in addition to funding housing needs through federal grants and the City's Housing Trust Fund.However,even with the great strides that have been taken,the City has now entered the beginning of a systemic crisis in providing affordable housing for all of its residents in all communities. The data from the 2013 Housing Market Study and Gaps Analysis identified the alarming trend that incomes are not keeping up with the increase of housing costs. The updated report shows that this disparity continues and may be increasing at a Wage Increase vs. Rent Increase, higher rate than before. 2011-2016 Salt Lake City is experiencing an affordable housing crisis and despite the efforts 26% of many,it is not improving.Too many people are not able to find appropriate and affordable housing and many of those who are housed are spending too much of their income on housing costs.The updated Market Study provides the following data: • Both renters and owners lost purchasing power between 2011 and 2014 (continuing the trend from 2000).That is,sales prices increased faster ■ Increase in renter wages than owner incomes(33%vs 8%)and rent increased faster than renter incomes(8%vs 4%). ■ Increase in rent prices • The rental affordability gap is higher than the owner affordability gap and Source:BBC Housing Market Study,2016 renters are more likely to be cost-burdened than owners(49%of renters and 22%of owners spend more than 30%of their income on housing). 42 Growing Salt Lake:2018-2022 • Among renters,single parent families and minority households may have • • • some of the greatest housing needs as they are more likely than other m fe fe 11. le • households to live in poverty;both also have low rates of homeownership. • Nearly 33 percent of all renters earn 30 percent or less of area median m• m• fe • m• m•income and nearly 60 percent of renters earn 50 percent or less of area I1n 'n' n'median income(AMI). 11 11 1 I' 11 I' I' • Nearly half of all renters(18,672 households)in Salt Lake City are cost burdened.A quarter of renters are severely cost burdened spending more than 50 percent of their income on housing costs.This situation • • • • • • • • prevents those with low incomes from being able to afford the basic Il I1 I1 f1 I1 W necessities of life and further exacerbates the issues surrounding poverty. • •• Approximately 4 percent of the city's households—or about 3,265 II. Ill. 11. rhouseholds—are overcrowded.Two percent of owner-occupied housing ''nI' units are overcrowded and 7 percent of renter-occupied units are Nearly one-half of all renters in overcrowded. Salt Lake City are cost-burdened, • Altogether,the city has a shortage of rental units priced affordably for and nearly one quarter are extremely cost-burdened. renters earning less than$20,000 per year of 7,467 units(down from 8,240 units in 2011). Source:BBC Housing Market Study, 2016 The data indicates that the housing market is not supplying enough affordable housing—in particular rental units—for those with fixed incomes who desire to live in the city.Incomes are not keeping up with housing costs and too many people are cost burdened,severely cost burdened,or living in overcrowded homes.And while the number of rental units decreased from 8,200 to approximately 7,500 it is due to a very slight increase in incomes,which is not enough to cover other housing and living expenses. • Poverty .41 Even with the slight increase in incomes,too many of those living in Salt Lake City SLC are in poverty.The Census Bureau determines those who are living in poverty 2 f a of all families with by using money thresholds that vary by family size and composition.In 2014, children live in the federal poverty level for a family of four(two parents and two children)was poverty $24,008 and $12,071 for an individual.In Salt Lake City,the 2014 poverty rate was 21 Source:BBC Housing Market Study,2016 percent,or 40,248 people,which is down from 22 percent in 2010,but substantially higher than the County and State who are both at 12 percent.The city's poverty rate does include University of Utah students who may have more opportunities for economic mobility and thus inflate poverty rates,so it may be best to look at the family poverty rate.Fifteen percent or 5,707 families in Salt Lake City are living in poverty,which is higher than peer cities of Boise at 9 percent and Denver at 12 percent.Poverty is highest among children in the city with 30%(11,763)living at or below the threshold and is especially prevalent with 39 percent of single Growing Salt Lake:2018-2022 43 parents in poverty.The west side area of Salt Lake City has a higher concentration of minorities and has a poverty rate of 30-40 percent.In 2010,one quarter of the city's population was under 18 and approximately 43 percent of the city's youth live on the west side.This data indicates that a higher number of youth living on the west side are also living in poverty. The effects of poverty negatively impact the physical,mental health,and wellbeing of the city's children.Unfortunately,the effects of poverty are long lasting and create a barrier to breaking the cycle.According to the American Psychological Association's website,some of the academic,physical,and psychosocial outcomes of poverty include: • Chronic stress associated with living in poverty has been shown to adversely affect children's concentration and memory,which may impact their ability to learn • They are more likely to be developmentally delayed or have a learning disability • They are more likely to not complete high school • Children in poverty are more likely to have chronic asthma,pneumonia, and anemia • They are more likely to have lead poisoning SALT LAKE CITY'S • They are more likely to be low birth weight GREATEST • Children in poverty are more likely to have an ongoing emotional or HOUSING NEEDS behavioral problem that lasts 3 months or more • Female teens in poverty are more likely to become pregnant 1)7,500 affordable rental units to meet the needs • Children are ten times more likely to have experienced hunger at least of the city's lowest income once in the past year renters(those earning • They are more likely to be victims of child abuse or neglect $20,000 and less per year). While there are certainly other contributing factors,the lack of affordable, 2)Additional residential healthy,and safe housing further compounds the issues of poverty.As shown housing product to entice previously,25 percent of renters are extremely cost burdened,spending more in-commuters to relocate to than 50 percent of their income on housing.A family of four living in poverty who the city,encourage current residents—particularly spends half of their income on housing and 20 percent on transportation costs,is millennials—to remain left with only$20 each day to provide health care,food,and other basic essentials in the city and provide of healthy living.Stable and affordable housing allows parents to feel some degree more homeownership opportunities for minority of financial security as their very basic need of shelter is being met.Such stability renters. diminishes the feeling of always being in crisis and allows parents to focus on getting out of poverty. Source:BBC Housing Market Study, 2016 44 Growing Salt Lake:2018-2022 Defining Affordable Housing Dialogue around affordable housing often uses words that are interchangeable or not clearly defined.In the truest sense"affordable housing"is something that every person needs regardless of his or her income.Affordable housing means that no person should spend more than 30 percent of their income on housing costs.HUD uses the following categories and AMI percentages to break incomes into segments so that specific housing needs can be met: Median Family Income 100% Low Income 80% Moderately Low Income 60% Very Low Income 50% Extremely Low Income 30% However,in common vernacular,affordable housing has come to mean housing for those with lower incomes and is further defined by associating the term"low- income housing"for those in the Very Low and Extremely Low Income categories. Some of those who need low-income housing would include those experiencing or are near homelessness or those making a minimum wage.Even those who are working full time being paid $12-14 per hour would qualify for housing at 50 percent of AMI.One third of Salt Lake City renters are at 30 percent or below AMI,and yet only 15 percent of our housing inventory would be affordable for them.A family of four between 60 percent and 80 percent of area median income(which equates to a salary range of$44,280 to$59,050)could most likely afford a smaller rental unit or,at the higher end of the spectrum,could afford to purchase a home.Once again,the inventory isn't available or the living conditions would be substandard which may include overcrowding.Much of the existing inventory of housing that is affordable to very low income and extremely low income households is not restricted stock and is at risk with changing market conditions. Impediments to Affordable Housing Lack of Funding One of the primary impediments to the construction and management of affordable housing is a lack of financial resources.Typical funding sources include two federal tax credit programs that allow tax credits to be sold to an investor in turn giving a project 40-90 percent equity.While this is an incredibly valuable financing tool,the 9 percent tax credits that are the main source for funding Growing Salt Lake:2018-2022 45 housing for the very low and extremely low income are limited,making them very competitive to obtain.A project funded by the 9 percent tax credits usually has about 90 percent equity with the rest of the funding,if needed,from financial rinstitutions,government resources and/or deferred developer fees,but the program is only available once a year with a limited number of available credits.A umwo..,om 4 percent tax credit project offers lower equity amounts but can be done at any time.A 4 percent project does require a Private Activity Bond in the amount of at least 51 percent of the cost of the project however the State's bond amounts have NORTHWEST PIPELINE also becoming increasingly popular and recently have not been sufficient to meet BUILDING DEVELOPMENT developer demand.The 4 percent projects are typically more expensive to finance In August 2015,Salt Lake and require more debt resulting in higher rents thus excluding most people below City launched a request for 60 percent AMI.There are very few other funding sources for the construction of proposals to develop the affordable housing and those that do exist can be expensive and time consuming historic 1958 Northwest thus driving up costs.Another typical funding source is Section 8 Housing Choice Pipeline Building at 315 East vouchers that include tenant and rental based subsidies.These traditional subsidies 200 South. The development are limited and may not be available to new applicants for years. In fact,many will provide new market rate, housing agencies are not currently accepting applications for this program.Finally, affordable,and permanent traditional bank financing is not a strong resource for the creation of affordable supportive housing units. housing due to higher interest rates and other costs resulting in higher rents passed to the tenants. The development will include the rehabilitation of the Land Costs and Availability Northwest Pipeline building and new construction on Land costs are closely associated with the ability to finance affordable parcels adjacent to it.In housing.Reducing land costs is an effective way to create opportunities for addition,the project will below-market rate housing units.The more a project is subsidized the greater the provide much needed opportunity for deeply discounted units providing housing for those with very low Central City public space and and extremely low incomes.Land values on the east side of the city and in major commercial space for local east side corridors(such as 400 South)are usually higher than other areas,thus businesses. limiting the opportunities for affordable housing.In addition,developable property for both multifamily and single-family housing on the east side of the city is scarce, which results in higher land costs. Current Zoning A third impediment to the creation of more affordable housing is City zoning ordinances.Zoning affects land values,and if unit density is not available then land costs are too high to make affordable housing cost effective.One of Salt Lake City's main concerns in zoning is a lack of middle income housing options. The current residential multi-family zones(RMF)do not allow for the density to make townhomes,duplexes,and small multi-family developments affordable 46 Growing Salt Lake:2018-2022 and financially feasible. Other unit types,such as Accessory Dwelling Units,are also currently prohibited from most areas of the city,in particular areas of high opportunity. Additionally,large sections of the city are zoned for a low-density residential land use pattern that requires lots of at least 10,000 square feet. Allowing for these lots to be subdivided into two buildable lots,could increase the density and housing options in a neighborhood without significantly impacting the scale of the buildings. Neighborhood Resistance-"Not in my backyard"(NIMBY) NIMBYism is unfortunately becoming more of an impediment,especially as the need for affordable housing grows and the conversation is becoming more prevalent.Too many neighborhoods lack deeply affordable housing and vocally oppose it coming into their communities.This opposition takes many forms. In some cases the concern can be about the compatibility of new housing types with the existing development pattern of a neighborhood or the increase of people and vehicles in a neighborhood without the requisite infrastructure. Often the concern is founded in the belief that affordable housing will result in a rise in crime and safety issues,a decrease in property values,and that it will be a barrier to future economic development. Those who live in affordable housing,in particular low-income housing,include a range of people:young couples beginning their careers,teachers,social workers, government employees,single mothers with children,those with disabilities— people in our communities who may be working one,two,or three jobs to make ends meet.Low-income housing is also built for those who may be struggling with substance abuse issues,homelessness,or mental illness.It is presumptuous and unfair to determine that low-income housing equates to higher crime rates and cannot be supported by any evidence.In fact,affordable housing,as a tool of economic development,can often help to lower crime rates.The National Crime Prevention Council calls for the construction of affordable housing to reduce crime because"neighborhood cohesion and economic stability are enhanced in areas where the continuing supply of dispersed,affordable housing is assured" When managed effectively by experienced professionals these buildings are safe, bring eyes to the street,and often add value to a neighborhood.One excellent example is Kathleen Robison Huntsman transitional housing located on 300 South and 300 East where neighbors would probably never know that it is a place that provides housing for low income families. Growing Salt Lake:2018-2022 47 Recent studies byTrulia and another by the Joint Center for Housing Studies at Harvard University evaluated values of properties that surround low-income housing developments throughout the country.There is no evidence to support the claim that affordable housing negatively affects surrounding property values and in fact,in most cases,there was an increase.This is a result of two things:good design and good management.Affordable housing developments in Salt Lake City are proving to demonstrate both of these qualities.Taylor Springs,Liberty Citywalk, Citifront,and NorthSix are just a few of the many developments that either have a mix of incomes or are exclusively affordable and are well designed and managed and contribute to their respective neighborhoods. Finally,the belief that low-income housing is a detriment to economic development is unsubstantiated.Studies show that those with low incomes patronize local businesses more than those with higher incomes.In addition, growing companies seeking to expand facilities and the numbers of employees often have difficulty attracting workers,because there is no place for them to live or reliable transportation to and from work. Salt Lake City is experiencing tremendous residential growth with new homes and apartment buildings being constructed.Due to low vacancy rates and all-time high rental rates,the increase in housing costs is far outpacing incomes.Too many of our renters,both individuals and families,are spending more than half of their incomes on their housing costs that prohibits them providing other essentials such as transportation,health care,nutritious foods and vegetables,and recreation. Families and individuals living in poverty cannot find stable and affordable housing that would help them to start on the path to financial security.As the data proves, poverty has lifelong implications,not to mention that younger generations will most likely continue its detrimental cycle--a cycle that may be most interrupted by housing stability. The city is in an affordable housing crisis and if growth projections are correct,it will not improve unless bold and strategic measures are developed and enacted.Solutions must include using zoning ordinance to provide a mix of housing types in an effort to relieve the pressure put upon existing housing, creating sustainable and significant funding sources,preventing and diverting low- income families from entering homelessness,and creating innovative housing for all income types. 48 Growing Salt Lake:2018-2022 5 . SNAPSHOT SALT LAKE CITY The home is the intersection of the core components of daily life,where economies meet the personal matters of the home.It is the place where budgets are laid out, ' crises are undergone or averted,meals are prepared,much needed rest is granted, .. Band-Aids and bikes are stored,and where life is shared and experienced.Housing ! is t J is critically linked to many other important policy considerations,like education, '�5 *' . . " health and transportation.These linkages create opportunities for a holistic view as ' * ' -- well as potential to bring in non-traditional housing partners to make an impact. In an effort to focus the scope of this plan,data is used to understand how each of LIBERT LK these unique sectors interplays with the housing market and housing affordability. APARTMENTS 210 South 300 East Data is the key to understanding how our city is growing and developing,what Salt Lake City barriers and challenges exist when solving the affordable housing crisis,and how system design can create a more equitable place to live.This section will focus 73 Affordable Units on the story the data shares about such growth and development,and how that 73 Total Units affects the residents of the city. Located just east of the downtown business district, The basis of this plan is an understanding of the complexity of housing,the Liberty CityWalk opened in affordability crisis,and the larger structural needs of a growing Capitol City.While 2010. the scale of available information is great,there are some key data sets that have been identified as critical to the development of the City's housing plan: In walking distance of TRAX first,determining the growth and changing demographics of the city;second, and several bus lines,this fully identifying the complexities of the housing market;and third,understanding the affordable apartment complex received a loan in the amount needs and wants of the residents. of$500,000 from Salt Lake City's Housing Trust Fund. A look inside Salt Lake City Image:Cowboy Partners There is no doubt that Utah continues to grow at an unprecedented rate. Projections from the Kern C.Gardner Policy Institute validate a tremendous population growth ranging from 10 percent to 20 percent over a single decade as Growing Salt Lake:2018-2022 49 a result of net in-migration and natural child birth increase.Utah,long known for its"young"population will need to prepare not only for such growth,but the shift in aging demographics.Salt Lake City is not exempt from such growth,in fact it is the epitome of such growth having seen the largest increase in just the past 4 years.This growth opportunity is reflected through increased economic and job Salt Lake City Workforce availability,increased labor force,and additional diversity.Our vibrant city continues to attract people from all ages and backgrounds to build a life here in a place 84% known not only for its mountains,but also for its local businesses and its strong communities. 11(14 In-Commuters Population growth trends are of particular interest to Salt Lake City and the opportunities it provides should not be missed due to a lack of infrastructure, 16% housing,or job opportunities.The consequences of a lack of these elements can be SLC seen as in-commuter trends are analyzed: Residents Source:BBC Housing MarketStudy,2016 "Salt Lake City has a very high proportion of in-commuters compared to peer cities:84 percent of Salt Lake City jobs are held by in-commuters(up from 82%in 2011),compared to 57 percent in Boise and 71 percent in Denver.The city's in-commuting population will continue to grow if job growth exceeds household growth in the city" Salt Lake City Household Composition,2014 Consideration must be given for creating opportunities to attract people to live where they work.Such high rates Married couples of commuters significantly deteriorates air quality and without children adds unnecessary strain on city resources when daytime 22% population increases by nearly 60 percent. Married couples 1�Q/Q with children While prediction of growth is valuable for planning,it is TOTAL also necessary to understand current needs in the Capitol HOUSEHOLDS One-person 36/0 Q 75,923 1Q/Q Single-parent City.To date, 191,000 people call Salt Lake City their home. households households The city has had an average growth rate of 5 percent 0 12Q/ 5% Other family since the year 2000,seeing the majority of that growth Q households in recent years.Today,52 percent of this population are Multi-person families,7 percent are single parents(the large majority of households which are single mothers),and 35 percent are made up of Nearly two-thirds of all households in Salt Lake racially and ethnically diverse households.An aggressive City are composed of one or two people. growth rate promises a future with a robust labor force, Source:BBC Housing MarketStudy,2016 diverse communities,and a strong economy,however it will also demand new types of housing,community amenities like fresh food and libraries,and spaces to bring talent and art alive. 50 Growing Salt Lake:2018-2022 With this promise of growth there are three main demographic areas that have shifted over the past four years and will be the cornerstone of future development Salt Lake City Residents and community composition. by Age,2014 1. Post-college aged Millennials(ages 25-35) 18-34 35-44 2. Aging Population(esp.Baby Boomers that are entering senior status) 3. Communities of Color(continue to account for the largest share of 45 64 population growth and are most geographically segregated) <18 65+ The Millennial population,while influential throughout the country,are particularly Nearly 4 of every 10 Salt abundant in Salt Lake City.This population exceeds peer cities and primarily lives in Lake City residents is an Central City,University neighborhoods,and Sugar House.Not surprisingly however adult millenial (between 18 and 34 years old). the existing housing is not meeting their needs. Source:BBC Housing Market Study, "The Salt Lake City metro area ranks second among all large metropolitan 2016 areas(those with at least one million residents)for the most Millennials as a proportion of the population—behind only Austin,Texas.The city itself has a higher proportion of Millennials and stronger millennial growth than the country,even when excluding college students.Twenty-one percent of Salt Lake City's population is post-college aged Millennials—higher than peer cities such as Boise and Portland,and on par with popular millennial cities such as Austin and Denver.Homeownership rates among this age group were relatively low(21%),in line with the tenure choices of Millennials in other cities"(BBC Housing Market Study,2016). This unique population is demanding a new way of living,preferring walkable communities with access to transit,looking for vibrant cultural and recreational opportunities,and open to smaller living spaces.In return,such a population continues to add to the economic health and growth of the economy and become vested residents that care for and enrich the community.To date,the supply of housing options that meet the housing preferences of this population has been limited.This reduces the likelihood that this population can remain local and have long-term stability. Conversely,Salt Lake's aging population while not surpassing peer cities continues to grow at a noteworthy rate;those ages 45 years and older make up about 30 percent of the population.These households generally live on the Upper East Side, Avenues,and City Creek Canyon.This population has legacies in their communities, raised families in a single home for decades,built up their network,and shaped the culture of their neighborhoods.However,without accommodating their changing Growing Salt Lake:2018-2022 51 extremely low-income seniors and people with disabilities Affordable rent&utilities: <$400/mo. =< $16,000 per year,poverty level 300/o AM I People65yearsandolder,Peoplewithdisabilities,People who live on a fixed income such as social security Low-Wage Workers Affordable rent:$420-$635/mo. $ 16,640 to$ 25,300 per year for an Affordable home: <$175,000 individual Childcare Provider,Veteri nary Assistant,Ski Patrol,Cashier, 30-5 0% AMI Visual/PerformanceArtist,Custodian,Fast Food Cook,Hotel Clerk Affordable rent:$900-$1,445/mo. Low-Income Families Affordable home: $175,000-$200,000 $ 36,100TO $ 57,750 per year for a family of four Home Health Aide,Accounting Clerk,Legal Secretary, u 80% Am ! Physical Therapy Assistant,Truck Drivers,Flight Attendant, Automotive Mechanic,Kindergarten Teacher Moderate-Income Families Affordable rent:$1,445-$1,805/mo. $ 57,800TO $ 72,200 per year for a family of four Affordable home: $200,000-$255,000 80- 1 00% � I Special preseEducation Teacher, tChir practoDesigner,Electrician, Sales Representative,Chef,Chiropractor,Social Worker High-Income Families Affordable rent:$2,000-$2,700/mo. $86,600TO $ 108,000 per year fora family of four Affordable home: $300,000-$400,000 20_ 1 5 0°i'o Am I Chemist,Electrical Engineer,Human Resources Manager, Nurse Practitioner,Attorney,Dentist,ITManager needs,such as increased accessibility,smaller homes within their current area,and increased access to transit,Salt Lake City may find itself losing many of those who have helped create a strong community fabric. Lastly,as growth is being considered it cannot be done without recognition �., of the contribution of racially and ethnically diverse residents.Today the 'itI� w a minority population makes up about 35 percent of total Salt Lake City residents W : with 21 percent of the total population identifying as Latino.This population is primarily responsible for all the population growth in the last decade and continues to be the largest contributor to new birth growth.This mimics the national trend �- of metropolitan areas slowly becoming"minority majority"communities—which is predicted for Salt Lake City by the year 2042. Salt Lake's current demographic An Envision Utah survey reported that 78%of Utahns supported mixing housing types in distribution of this population depicts a very segregated picture.The majority of the their neighborhood.(I mage:VODA) minority population currently lives within the Westside Master Plan geographic area and in general west of Interstate 15.These areas also have a deficit of traditional 52 Growing Salt Lake:2018-2022 opportunities,such as highly rated schools,access to fresh food,quality medical care,and transit.This has several implications for a growing city as it prevents it SLC WORKFORCE from enriching all communities with the assets,art,language,entrepreneurship, Top 10 Industries& and unique heritages of non-white communities.It also limits access to opportunity Average Annual Wage for the largest growing population in the city,thus creating a poor foundation for 1.Health and Social Services success in health,education,and income mobility. • $43,419(60%AMI) Each of the above-mentioned populations are growing and have housing needs 2. LI•I that are not currently being met.Markedly,the difference of where these three • $58,279(81%AMI) distinct populations(Millennials,Aging,and Communities of Color)are living 3. -•• •• ratio speaks to a myriad of issues.Primarily,aging populations living in high-resource • $47,439(66%AMI) and high-income communities while many minorities continue to be concentrated 4.Professional Services in areas with higher rates of poverty.Certainly,income and life cycle plays a role-- 73,341(102%AMI) intuitively an older adult presumably may afford more affluent areas while younger populations are at the will of the market.However,there is notable inequity when 5.Hospitalit looking to where our more diverse communities live.In the context of this report,it 7,067(24%AMI) is clear that racial and ethnic barriers exist,preventing career mobility and limiting 6.Retail Tra• the access to opportunity through the mere geography of housing.However,in $33,359(46%AMI) the context of Salt Lake City's anticipated growth it is also clear that there are 7.Transportation an not enough housing types or housing affordability to sustain the demand Warehousin• from each of these populations.Our current neighborhoods are not equipped 46,531 (64%AMI) to serve the needs of our growing and evolving population.Therefore,it will be g.Finance any + uran+ critical that there is a focus on land-use reform that can integrate the needs of • :9,872(97%AMI) each growing population into the now homogenous design of neighborhoods and there is demonstrable support for such a shift.According to an Envision Utah 9.Admin and Waste Services survey,78 percent of Utahns want communities that include a full mix of housing : 32,455 (45%AMI) types(including small lot detached homes,townhomes,condos,and apartments) 10.Wh•I- . -T..that match the affordability profile of residents.Furthermore,Utah residents are $65,700(91%AMI willing to allow more housing types in more communities in order to achieve this goal. Source:BBC Housing Market Study,2016 These preferences are in line with national trends favoring the development of "Missing Middle"housing types,which bridge the product gap between large- lot single-family homes and large apartment or condo structures.An increase in diverse ownership products—in terms of structure,type,and price-point—could help the city attract and retain workers and residents in the city,as well as increase ownership rates for disadvantaged populations. Growing Salt Lake:2018-2022 53 Living and Thriving Considering the demographic and population growth described above,it becomes clear that an in-depth understanding of the housing market is absolutely necessary as plans are created,zoning is modified,and racial and income segregation is addressed.Not only is it necessary to shift how land-use is regulated and housing is built in order to allow more housing and opportunity throughout the city,it is also necessary to understand who in the city is most under served in the market and what factors influence affordability. In 2016,the Salt Lake City Household Income Housing and Neighborhood Development Division of Salt Lake City worked with Distribution,2014 BBC Research to produce the"Housing Market Update"to help understand the $35,000- challenges facing low-income families and specifically the barriers to housing $99,999 within the city.Below is a highlight of the most significant barriers to meeting the 10 housing needs of Salt Lake City's residents. <$34,999 Income The area median income for residents in Salt Lake City is nearly$20,000 less than +$100,000 that of the County as a whole,holding at$46,711.In addition,only two of the five largest employment industries in Salt Lake City pay wages high enough to afford the city's median home price of$271,000,thus it may be difficult for households 40% 43% 18��j earning their income in those(or other)industries to afford to buy a home on a Lower Middle Upper single income,requiring both adults in the household to work.While overall there is Income Income Income some growth in income(8%)over the last few years,it was not significant enough Source:BBC Housing Market Study,2016 to keep up with market inflation.There is also a discrepancy in income gain among renters and owners.Owners experienced income growth at twice that of renters and the gap in income between these two populations has widened dramatically in the past five years.Without consistent increase in wages that match the increase in market inflation many of Salt Lake's low and moderate income households will be pushed out of the city creating additional financial burdens,decrease in opportunity,increase of in-commuters,and a great loss of mixed-income and diverse neighborhoods.This is intensified as single parent families and minority households may have some of the greatest housing needs,as they are more likely than other households to live in poverty.Since it is unlikely wages will increase —especially for those making $20,000 per year(or 40%AMI),Salt Lake City must consider alternative methods for stabilizing this population and creating access to safe housing. Housing Stock A key challenge that is unique to this market is the unusual age and type of existing housing stock.About half of the housing is single-family detached,which 54 Growing Salt Lake:2018-2022 consumes large lots and is generally out of reach for many low-income households = = = t and the other half consists primarily of apartments,duplexes,and condos.However, I1I�III. I�I 711. I�I 116 the vast majority of rental units(80%)has only two bedrooms thus amplifying both the need for new units,but also increased affordability for families that are If If iff If 111 frf renting.While structure(type)and availability(#of units)are clearly underserving • renters and owners,the age and condition of units deepens the complexity of 111 I' 11 'If II If serving the general market's needs.The majority of our city's housing stock was built before 1940 indicating that chances of dilapidation,blight,and unsafe 11 11 11 If If 1! If conditions may exist,increasing the likelihood of obsolescence,dilapidation, I�I= I�I= =blight and unsafe conditions.In fact,nearly 1,000 units lack key facilities such 111. fi I�I as plumbing or complete kitchens.These issues demonstrate that preservation, Nearly one-half of all adaptive re-use,and energy efficiency will need to be addressed as this plan renters in Salt Lake City are explores how to best leverage existing structures for long term affordability and cost-burdened,and nearly one-quarter are extremely increased density. cost-burdened. Rental Market Source:BBC Housing Market Study, 2016 There is currently a"housing boom"in Utah's Capitol City.Most residents have experienced this through either a gain in equity;or on the other end of the spectrum a dramatic increase in rent resulting in displacement or increased housing cost burden.These experiences are also clear in the data.Average rents along the Wasatch Front reached an all-time high in 2016,and rents increased 26 percent in the five-year period between 2011 and 2016.Although Salt Lake City is in the midst of an unprecedented building boom,it has yet to keep pace with the rising numbers of people who want to call the city home.Rising rents and low vacancy rates of 2 percent are driving more and more city residents to either seek housing elsewhere,or live burdened with housing costs that exceed Wage Increase vs. Home Sale 30 percent,and in some cases,more than 50 percent,of their household income. Price Increase According to recent U.S.Census data,49 percent of all renters in Salt Lake City are 2011-2014 cost-burdened,and 24 percent are extremely cost burdened.For those low-income families and workers who are unable to move outside the city limits(where rents 33% also continue to rise),or who are unable to spend an increasing share of their wages on rent,this housing crisis often creates a direct route into homelessness. Homeownership Homeownership is not exempt from the housing boom nor are those who 8% desire to purchase a home exempt from feeling the market exclusion of -- such an opportunity.According to the 2016 Housing Market Study Update BBC ■ Increase in homeowner Research shows that home sale prices increased 33 percent between 2011 and wages 2014,while homeowner wages increased only 8 percent.This steep rise in prices Increase in home sale prices Growing Salt Lake:2018-2022 55 has created a market in which most for-sale homes are only affordable for those in the high-income bracket.This is in direct conflict with the opportunity to retain more Millennials and first time home-buyers.Access to homeownership is often cited as key to community engagement and stability.Currently,homeownership is inaccessible to those making less than 80 percent area median income and current programs,while creating access through subsidies,generally lose affordability after a few years thus only serving a portion of those in need. Transportation Monthly Cost Burden of Housing+Transportation As mentioned previously,the home is the intersection of life and transportation. Access to transit can either be the key to housing stability or the component that creates instability.This is why it is recommended that the cost of housing 30 % and transportation for a household should not exceed 45 percent of the household's monthly budget.The cost of owning a car can have a dramatic 100%AMI impact on household income and purchasing power,especially for those at 80 Household percent AMI and below. In 2013,Utah Business noted that the average annual cost 25 % 45 % of owning a car in Utah was$9,122.This amount makes up nearly 31 percent of a family's income at$30,000 per year,at such rates the loss of this car or any other cost that comes up could send a family into crisis. 1p/o For a household earning 100 percent AMI in Salt Lake City,assuming 30 percent of 30 % income goes to housing,the cost of owning two cars would consume 25 percent of household income.The cost of two cars rises to 63 percent of household 40%AMI income at 40 percent AMI,again assuming 30 percent of income for housing. Household Even more striking,while in this scenario a 100 percent AMI household would have nearly half of its total income remaining for discretionary spending after meeting 63 % housing and transportation costs,a 40 percent AMI household would have only 7 percent total income remaining—or$165—to meet all its other monthly expenses. ■ Housing ■ Costs for 2 For a family at 40 percent AMI,reducing to one car would produce a monthly gain Costs Cars in discretionary income of 31 percent,or$760.If that same household lives in a ■ Remaining budget transit-rich neighborhood and is able to forgo car ownership and uses a reasonable With an average annual cost in Utah of more 15 percent of income for transportation,their funds available for discretionary than$18,000 to own and operate two cars spending would increase to 55 percent of total income,or$ 1,324 per month.The per household,the option of transit access can have a major impact on the discretionary affordable housing crisis cannot be addressed without exploring solutions in which incomeofa cost burdened household. transportation access and cost are considered. (Source:Utah Business) Collaboration The housing market is influenced by many factors and a collaborative approach across sectors is needed to make an impact on stability and availability. Currently 56 Growing Salt Lake:2018-2022 there is no infrastructure of programs,intentional alignment,or resource availability What were the reasons Salt Lake that would create a path to comprehensive housing change.Such change City renters did not buy a home? should occur at every level of the housing development pipeline,including those 60 experiencing the housing crisis,those building housing,and to those who are 50 52p/0 creating statewide housing policy.This effort is intended to work with existing 40 advocates,local governments,and residents.Without the input and expertise of all 70 communities the stark challenge that lies ahead cannot be met with the solutions 20 it needs. 10 1 14% Citizen Voices 0 ■ Could not afford location Contemplating and understanding data are key to any plan,however,it is only within the context of the community that data can truly be leveraged and ■ No desirable home in location understood.In the creation of this plan it was a priority to understand the views, ■ No desirable type of home desires,and needs of Salt Lake City's unique populations.To that end a housing choice survey was conducted:Salt Lake Live Work Survey.This was launched in late summer 2016 and garnered tremendous response(over 1,400 respondents); perhaps the largest survey response in recent record.The incredible response rate m 1 1 m it m1. I 1. I 1. 11 11. included about 15 percent of in-commuter responses adding significant context for those who work in the city,but do not live here either by choice or market ,�m ,�mmcircumstance.Since housing affects every income and race,a key outreach strategy 11. II. 11. If. If. '�. was to deliver the survey in ways that accommodated populations that consistently If If T m Tare under served or misrepresented,this meant that both an online survey was If 'In1' 'Pc 'Inl' available as well as a paper survey that was distributed at community events T primarily throughout the west side of the city.A full summary can be found in theI1W Ilnl' appendix.Below are several highlights that reflect much of what is laid out in the ,�, , ,�, ,�, W. IT�data above—however,a story takes shape telling of the opportunity that exists for I1IIf '�I I.I '�I ' the entire city through increased housing options and affordability. 52%of in-commuters • Nearly two-thirds of renters have wanted to buy a home in the past five would consider moving years,and most wanted to buy in Salt Lake City. to Salt Lake City if housing were more affordable. • Thirty percent of residents plan to move in the next 5 years in order to buy a home(44%)or because they want a bigger home(42%). • Respondents named two primary reasons for not purchasing a home in Salt Lake City: 1)Could not find an affordable home in the preferred location(31%);and 2)couldn't afford the down payment or didn't have enough saved fora down payment(51%). • Residents report spending about$1,100-$1,153 per month on rent and $1,489-$1,555 on monthly mortgage payments. • Nearly one in five residents report finding additional employment and 12 percent have friends or relatives living with them in order to support their housing cost or better described as housing burden. Growing Salt Lake:2018-2022 57 If you spent 25% less per month • Thirteen percent of residents went without needed medication/ on housing, how would you healthcare/dental care and 9 percent reduced their clothing budget in spend that extra money? order to meet housing costs. • Nearly one in ten survey respondents whose home or apartment needs 10% repairs believe their home is unsafe to live in(4%of respondents overall). • Top things residents would change about their neighborhood if they could:safer(29%);neighbors would do a better job keeping up their homes(23%);fewer apartments/rentals(18%);and more affordable homes to purchase in my neighborhood(14%). 43% • The majority of residents(more than 70%)reported being truly satisfied with both their housing and their neighborhood. • In-commuters who previously lived in the city moved for a bigger home (23%)and because they could not afford to buy in Salt Lake City(17%). 11`�0 • 52 percent of in-commuters would consider relocating to Salt Lake City if housing were more affordable. _ • Affordability was the primary reason in-commuters chose their current SLC Residents In-Commuters home(32%),followed by:having a lot of space inside their home(13%) and outside their home(13%);safety(8%);and owning rather than renting ■ Save for retirement (7%). ■Save for emergencies This survey data is highly reflective of the data outlined throughout this plan, ■Save for down payment however,there are several aspects that add additional details to the numbers. on house Key among these is that residents truly enjoy the environment in which they live, namely the access to amenities,art,culture,and proximity to work.In addition,the housing market strain is evident as many indicated that they may or would have to leave to achieve their desired housing model.This is directly correlated to the lack of housing options that exists currently.Without additional development of new and innovative products Salt Lake's current and future residents will be forced to look elsewhere for their desired livability. Total Survey Responses Online Survey Responses Paper Survey Responses 0ó08 1668 259 248 112 • 16 81 % 13 % 89 % 11 % 11 % 23 % SLC In- SLC In- SLC In- Residents Commuters Residents Commuters Residents Commuters 58 Growing Salt Lake:2018-2022 4TH SOUTH TRANSIT-ORIENTED DEVELOPMENT The development will include at least 40 micro-units (BARNES BANK PROPERTY) (between 250 and 500 square feet)with 40%AMI maximum iri I ,.......w affordable rent,as well as mixed income housing,with at j ,,....rw•• least 20%of the units reserved for households making 60% . 1 or less. li. `' ' -4 + A business incubator with space for offices and short-term - —...--- retail is also included,as well as long-term ground floor retail space designed to activate the public realm along In January 2017,Salt Lake City launched a request for surrounding streets.Urban solutions such as shared parking, proposals to develop the 4th South Transit-Oriented alternative transportation,public art,and gathering places, Development at 320 East 400 South and 340 East 400 South, will play a critical role,as will sustainable approaches to in order to further innovative approaches to affordable building,energy use,and recycling. housing. Affordability needs are acute within the survey results and are even more prominent when paper survey respondent results were reviewed separately from the online respondents.Paper survey respondents were 70 percent Latino and primarily from traditionally under served communities.Overall,affordability of homes and rental units are a primary concern,but the cost burden became more evident when rental and homeownership monthly payments were reviewed. For many of those that responded via the paper survey it was noted that their mortgage was slightly lower which may reflect the housing being concentrated in lower income areas of the city,again,reiterating the need for increased choice and access.Not surprisingly this population also reported incidents of discrimination for about 50 percent of the respondents;discrimination was directly linked to race, immigration status,or ethnicity(primarily Latino).This information was in direct contrast to the online respondents who felt the primary reason for discrimination was the ownership of a pet. Affordable housing is not just about the numbers,it is about the lives affected by sky-rocketing housing prices,poor living conditions,exclusion of basic needs,and the daily choice of food versus rent,and as Matthew Desmond points out in his book"Evicted"—'the rent always eats first:Salt Lake City does not disregard these numbers,but is constantly and profoundly aware of the many faces they reflect and that so many of those are children.As this plan progresses,recognizing the failure of the market to accommodate the changing needs of this community is key to also identifying solutions.While the market challenges affect everyone in the city a closer look at those most under served merits additional review so that this can be a city for everyone. Growing Salt Lake:2018-2022 59 60 Growing Salt Lake:2018-2022 6. CONCLUSION Salt Lake City is in the beginning of a systemic housing crisis. The goals, objectives,and strategies outlined in this plan are intended to guide the modernization of public policy and the deployment of resources that are needed to address the crisis. This effort will require that the City examine its own processes and procedures to ensure that it is functioning at the highest,most efficient levels. If administrative systems do not improve to match the goals established here,they could hinder the successful implementation of this plan. This is a five-year plan. While its duration is relatively short,the speed of markets, innovation,and demographic change,warrant regular review and potential course corrections as needed. As part of the execution of this plan,the City will commit to accountability and transparency toward achieving its goals and will create a work plan to establish expectations and chart the city's progress. Finally,Salt Lake City must be a place for a growing diverse population to find housing opportunities that are safe,secure,and enrich lives and communities. The execution of this plan is a fulfillment of Salt Lake City's legacy as a welcoming community that is committed to equity and access to affordable housing for all of its residents. Growing Salt Lake:2018-2022 61 Housing Plan Process&Timeline 201 5 PI. .It Lake Adopted Housing Policy Adopted De 115 Marc 16 Ho *ng Finance Group Completed BBC Market Study date M 16 Apr2016 Salt Lake Live Work Survey(1,916 Res es) W ide Public Outreach(5 Events) Aug-Se 016 Sep- ov 2016 Housing Overview Council B ng Se 16 Ce I City/East Side Public Outreach (11 Events) 0 16 Housing Finance Group Council B ng Oc 16 St. ent de Paul Housing Workshop RDA Board Housing Discussion N 16 Dec 2016 I Launch Barnes Bank Proper RFP W n Briefing on Housing Plan to Council Ja 17 Fe 17 Housing Plan Launch Fe 17 Pla ng Commission Briefing MI 2017 Housing Plan Public Information Session Feb/March 2017 Draft Housing Plan Presentation to Council Spryer 2017 Adoption of Final Housing Plan December 2017 Oil Olt 5 Y of Strategic Housing Policy Implementation 2022 62 Growing Salt Lake:2018-2022 APPENDIX A: HOUSING VARKET STUDY B3C RESEARCH & CONSULTING 2016 Growing Salt Lake:2018-2022 Growing Salt Lake:2018-2022 BBC RESEARCH CONSULTING Housing Market Update Salt Lake City Corporation a= k . ., ,.. /$ F' • L. r ` N 1111111 .. i'. :NT a:::r -- '' — gyp` i .iii .. ,'_ I .. I ' t MI @I � IVA w. . ., . . 1 mi.- i. .Lizii-i- t y 4.. _ _,..t ,...-1.--...5 .._. - , . a r ,t FINAL REPORT Final Report November 22, 2016 Housing Market Update Prepared for Salt Lake City Corporation Housing and Neighborhood Development 451 South State Street Room 406 Salt Lake City, Utah 84114 www.slcgov.com/hand Prepared by BBC Research &Consulting 1999 Broadway,Suite 2200 Denver, Colorado 80202-9750 303.321.2547 fax 303.399.0448 www.bbcresearch.com bbc@bbcresearch.com BBC RESEARCH CONSULTING Table of Contents ES. Executive Summary What Were the Primary Demographic Changes Between 2000 and 2014? ES-1 How Affordable is Salt Lake City Housing? ES-2 What Types of Households are most likely to need Affordable Housing? ES-3 Does Salt Lake City's Housing Stock Accommodate Future Housing Needs? ES-4 I. Community Profile Demographic Overview 1-2 Economic Indicators 1-18 II. Income Profile Income and Poverty II-1 Income by Tenure 11-7 Cost Burden 11-8 III. Housing Profile and Affordability Existing Housing Stock III-1 Profile of Renters and Owners III-4 Housing Cost and Affordability III-8 IV. Market Mismatches and Gaps Rental Gaps IV-1 Gaps in the For Sale Market IV-3 What Can Workers Afford? IV-6 BBC RESEARCH &CONSULTING Executive Summary Housing Market Update EXECUTIVE SUMMARY. Housing Market Update In 2013 BBC Research&Consulting(BBC) conducted housing market study for Salt Lake City Corporation,with a focus on affordable housing needs.This report provides an update to key demographic indicators from that market study and an in-depth analysis of housing affordability in Salt Lake City. This report is organized around the following sections: ■ Section I (Community Profile) provides context for the housing analysis.It reviews population growth,changing demographics,in-commuting,and employment. ■ Section II (Income Profile) analyzes resident incomes through the lens of housing affordability.The analysis evaluates distribution of households by income group,incomes of renters and owners and the number and proportion of cost burdened households. ■ Section III (Housing Profile and Affordability)provides an overview of the housing stock in the city in terms of type,age and cost,both for rental and for-sale housing.This section also discusses key differences between renters and owners and introduces the study's analysis of affordability. ■ Section IV(Market Mismatches) compares the cost of rental and for sale housing at various price points with resident demand for housing,using income as a proxy.This modeling effort shows where"gaps"in housing provision exist—that is,where there are more households who need affordable housing than is supplied. The Executive Summary highlights key findings from the analysis. What Were the Primary Demographic Changes Between 2000 and 2014? ■ In 2014,the Salt Lake City population was 191,000,up from 182,000 in 2000.The population growth rate increased between 2010 and 2014 relative to the previous decade. However,the growth rate among minority groups slowed between 2010 and 2014. ■ As is typical in large metropolitan areas,households in the suburbs are more likely to be families than households in the city(76%compared to 52%).The proportion of households that are families declined between 2000 and 2010 but held relatively Households in the Suburbs Households in the City constant between 2010 and 2014— both in the city and the county overall. Trends in the city and county were 76% 52% proportional,meaning the city does not seem to be losing a disproportionateid tit proportion of families to the suburbs. BBC RESEARCH&CONSULTING EXECUTIVE SUMMARY, PAGE 1 • The Salt Lake City metro area ranks 22% 22% 21% second among all large metros 19% (those with at least 1,000,000 residents) for the most millennials 14% aged 25-34 as a proportion of the population—second only to Austin, Texas.1 The city itself has a higher proportion of millennials and stronger millennial growth than the county,even when excluding Salt Lake City Boise,ID Portland,OR Austin,TX Denver,co college students.Twenty-one percent of Salt Lake City's Peer Cities Popular Millennial Cities population is post-college aged millennials (ages 25-34)—higher than peer cities such as Boise(14%) and Portland(19%) and on par with popular millennial cities such as Austin and Denver(both 22%). Homeownership rates among this age group are relatively low at 21%,in line with the tenure choices of Millennials in other cities. • Salt Lake City has a very high proportion Salt Lake City of in-commuters compared to peer cities: 84 percent of Salt Lake City jobs are held by in-commuters (up from 82% , Boise in 2011),compared to 57 percent in Boise and 71 percent in Denver.The city's in-commuting population will 84% continue to grow if job growth exceeds Denver household growth in the city. • Resident incomes in Salt Lake City increased at about the same rate as the county overall (both 12%)between 2011 and 2014.Owners experienced higher percentage gains in median income than renters (8%compared to 4%).However,income increases were not enough to keep pace with rising home prices and rents. How Affordable is Salt Lake City Housing? Median Rent: • Compared to surrounding communities,median rent in $761 Salt Lake City is relatively low($761) and median home value($238,700) and median sale price ($255,000) are11111 Median Home 1 � 1 � Value: moderate. • • I I $238,700 • Both renters and owners lost purchasing power between 11111 2011 and 2014 (continuing the trend from 2000).That is, sale prices increased faster than owner incomes (33%vs. 8%) and rent increased faster than renter incomes (8%vs 4%). 1 http://www.headlightdata.com/news---media/millennials-large-metros. BBC RESEARCH&CONSULTING EXECUTIVE SUMMARY, PAGE 2 ■ Despite the decline in renter purchasing power,the shortage of rentals priced below$500 narrowed slightly between 2011 and 2014—falling from 8,200 units to 7,500 units.That decrease in need is primarily related to an increase in renter incomes between 2011 and 2014,which resulted in fewer renters earning less than$20,000 per year. 2011 2014 13,4 12,624 Number of renters earning less than$20,000/year 5,226 5,158 Number of units affordable to renters earning less than$20,000/year Rental Gap -8,240 Rental Gap -7,467 ■ The for sale gaps analysis shows the Salt Lake City market to be relatively affordable for renters earning more than$35,000 per year that may wish to purchase a home. For renters earning less than$35,000 just 14 percent of homes are affordable,most of which are condos. For renters earning$50,000 per year 37 percent of homes are affordable and for those earning$75,000 per year two-thirds of all homes on the market are affordable. ■ The average Salt Lake City worker—earning$48,290 per year—could afford 35 percent of the homes sold in 2014/15.The same worker could afford just 30 percent of the homes in the balance of the county.Affordable homes in the balance of the county are slightly newer and slightly larger than affordable homes in the city but overall What types of households are most likely to need affordable housing? Overall,renters in Salt Lake City have greater need than owners:the rental affordability gap is higher than the owner affordability gap and renters are more likely to be cost-burdened than owners (49%of renters and 22%of owners spend more than 30%of their income on housing). Among renters,single parent families and minority households may have some of the greatest housing needs as they are more likely than other households to live in poverty;both also have low rates of homeownership. Renter needs include affordability for first-time homebuyers.Younger residents (including adult millennials) and Salt Lake City workers in many industries face challenges in finding an affordable home to purchase in the city. Only two of the five largest employment industries in Salt Lake City have wages high enough to afford the city's median home price,thus it may be difficult for households with a worker in those (or other) industries to afford to buy a home on a single income,requiring both adults in the household to work. BBC RESEARCH&CONSULTING EXECUTIVE SUMMARY, PAGE 3 Does Salt Lake City's housing stock accommodate future housing needs? With rental vacancy rates at historic lows,the city needs a larger supply of Salt Lake City's greatest housing needs rentals to accommodate demand;and are similar to those identified in the last to address the needs of lower income market study: renters it is important that the rental stock priced below$500 increase 1) A shortage of 7,500 rental units to (either through market production or meet the affordability needs of the subsidy or both). city's lowest income renters (those earning$20,000 and less per year). However,the city should also focus on Some of these households may be facilitating the development of students who have potential for ownership stock to accommodate the increased future earnings but many preferences of in-commuter,millennial of these households are low income and/or minority homebuyers. families, persons with disabilities, According to the Envision Utah survey, and lower wage workers. 78 percent of Utahns want communities that include a full mix of housing types (including small lot 2) Additional residential housing detached homes,townhomes,condos product to entice in commuters to and apartments) that match the relocate to the city, encourage affordability profile of residents. current residents—particularly Furthermore,Utah residents are millennials—to remain in the city willing to allow more housing types in and provide more homeownership more communities in order to achieve opportunities for minority renters. that goal.2 These preferences are in line with national trends favoring the development of"Missing Middle" housing types which bridge the product gap between large-lot single family homes and large apartment or condo structures.Salt Lake City does have a relatively high proportion of diverse housing stock—about half of Salt Lake City's stock is single family detached and half is attached housing(apartments,condos,townhomes,etc.).However,most of the city's attached stock is occupied by renters.An increase in diverse ownership products—in terms of structure type and price-point—could help the city attract and retain workers and residents in the city,as well as increase ownership rates for disadvantaged populations. 2 http://envisionutah.org/projects/your-utah-your-future/item/346-results BBC RESEARCH&CONSULTING EXECUTIVE SUMMARY, PAGE 4 SECTION I . Community Profile SECTION I. Community Profile This section provides a general overview of Salt Lake City's demographic and economic environment to set the context for the housing market analysis.Key findings from this section include: ■ Salt Lake City is currently home to about 191,000 people living in 75,923 households.The city population comprises 17 percent of the county population and 6 percent of the state. ■ Overall,the rate of population growth increased between 2010 and 2014,relative to the rate between 2000 and 2010.However,the growth rate among minority groups slowed between 2010 and 2014. ■ Post-college aged millennials (ages 25-34) account for 21 percent of the Salt Lake City population—higher than peer cities such as Boise (14%)and Portland(19%) and on par with popular millennial cities such as Austin and Denver(both 22%). ■ In 2014, 10 percent of Salt Lake City residents were seniors.Although the population of Salt Lake City is aging,forecasts suggest that the city is less likely to experience a significant "graying"of the population than other peer cities and the nation as a whole. ■ As is typical in large metropolitan areas,households in the suburbs are more likely to be families than households in the city(76%compared to 52%).However,that gap does not appear to be widening over time;in other words,the city does not seem to be losing a disproportionate proportion of families to the suburbs. ■ Salt Lake City has a very high proportion of in-commuters compared to peer cities: only 16 percent of Salt Lake City jobs are held by city residents,compared to 43 percent in Boise and 29 percent in Denver. BBC RESEARCH&CONSULTING SECTION I, PAGE 1 Demographic Overview Salt Lake City is home to 190,873 people-17 percent of the county population and 6 percent of the state population.The following demographic section presents trends and statistics for the residents of Salt Lake City in terms of population growth,household size and composition,age, race and ethnicity,disability and education. Population growth. Between 2000 and 2010,the population of Salt Lake City increased from about 182,000 to about 186,000—a compound annual growth rate (CAGR) of 0.3 percent. Population growth was faster between 2010 and 2014 with a CAGR of 0.6 percent,reaching nearly 191,000 residents.According to the Governor's Office of Management and Budget,Salt Lake City is projected to have more aggressive growth over the next few years,reaching nearly 211,000 by 2020 (1.2%CAGR from 2010). Figure I-1. Population,Salt Lake CAGR City,Surrounding 2000 2010 2014 2000-10 2010-14 Counties and State, 2000-2014 Utah 2,233,169 2,763,885 2,942,902 2.2% 1.6% Salt Lake County 898,387 1,029,655 1,091,742 1.4% 1.5% Source: Utah County 368,536 516,564 540,425 3.4% 1.1% 2000 and 2010 Census,2014 ACS and Davis County 238,994 306,479 317,646 2.5% 0.9% BBC Research&Consulting. Salt Lake City 181,743 186,440 190,873 0.3% 0.6% Salt Lake County as a whole expanded its population by 15 percent between 2000 and 2010 and another 6 percent between 2010 and 2014,largely due to suburban growth.The nearby cities of West Jordan,South Jordan and Draper had growth rates exceeding 50 percent between 2000 and 2010.Figure I-2 displays population trends and forecasts for Salt Lake City,surrounding municipalities and surrounding counties through 2030. BBC RESEARCH&CONSULTING SECTION I, PAGE 2 Figure 1-2. Population Trends in Salt Lake City,Surrounding Communities and Surrounding Counties, 1980 through 2030 250,000 - 227,824 —Salt Lake City 210,592 --West Valley City 200,000 181,743 186,440 ''''��� West Jordan 163,034 159,93,E —*—Sandy 150,000 .......+ Ogden —a—Layton 100,000 - _ .......---__=a! South Jordan -A --+ ----- Murray 50,000 - -- � Draper Bountiful Farmington 0 - r 1980 1990 2000 2010 2020 2030 1,600,000 - 1,400,000 - 1,200,000 - Salt Lake County 1,000,000 - ��--- Utah County 800,000 - —Davis County 600,000 - —Salt Lake City 400,000 -- -a _-- ---- 200,000 - -------- - 0 1980 1990 2000 2010 2020 2030 Note: Population projections are conducted by the Governor's Office of Management and Budget and use 2010 Census data as a baseline. Source: Utah Population Estimates Committee of the Governor's Office of Management and Budget Demographic and Economic Analysis and BBC Research&Consulting. Despite Salt Lake City's growing population,the county is experiencing slightly more out- migration than in-migration-a net migration loss of just under 2,000 residents.The outbound migration flow from the county is primarily due to residents moving to other counties within Utah.The majority of outbound and inbound migration is from Davis and Utah Counties. Household trends.According to the 2014 ACS,the 190,873 residents occupy 75,923 households in Salt Lake City.Of the 75,923 households,52 percent are families,nearly half of which include children—similar proportions to peer cities (Denver,Boise,Portland and Austin BBC RESEARCH&CONSULTING SECTION I, PAGE 3 range from 49%families to 59%families about half of which include children). Thirty-six percent of householders in the city live alone; one in five of those living alone are seniors. Approximately 7 percent of all Salt Lake City households are single parent households-2 percent are single fathers (1,512 households) and 5 percent are single mothers (4,104 households).Single parent households account for about 31 percent of all families with children in the city,compared to 23 percent in the balance of the county(Salt Lake County excluding Salt Lake City). Figure I-3 displays household composition for Salt Lake City. Figure 1-3. FAMIILIES NON-FAMILIES Household Composition, 52% 48% Salt Lake City,2014 Married couples Sources: without children 2014 American Community Survey and BBC Research&Consulting. 22% Householder 36% living alone TOTAL HOUSEHOLDS Married couples 75,923 with children ill Other Single parent non-family households Other households family households without children Compared to surrounding suburban communities,Salt Lake City has a much lower proportion of families—in the balance of the county 76 percent of households are families.While that type of difference is typical for a large metropolitan area,an important question for central cities is whether they are losing families to the suburbs.Between 2010 and 2014,family households as a percent of all households remained relatively constant in both the city(53%in 2010 and 52%in 2014) and the suburbs (76%in both 2010 and 2014).Families with children accounted for about one-quarter of all households in the city in both 2010 and 2014,compared to 39 percent in the suburbs for both years. Based on these trends,it does not appear that the city is losing existing families to the county. Household size.Utah has the highest average household size in the nation and is the only state where average household size is greater than three.Average household size in Salt Lake City is 2.45,lower than the state (3.16) and county(3.01)but higher than peer cities such as Denver (2.30).Twenty-three percent of Salt Lake City households have four or more occupants compared to 34 percent of households in the balance of the county. BBC RESEARCH&CONSULTING SECTION I, PAGE 4 Age. Over one-third of the city's population are adult millennials—aged 18 to 34.Middle aged and older adults (between 35 and 64) account for another third of the city population.Twenty- one percent of residents are children and 10 percent are seniors.Compared to the balance of the county,the city has a smaller representation of children and a higher representation of adult millennials. Between 2000 and 2014,the median age of Salt Lake City increased only slightly,from 30 to 31. Increases in median age were more pronounced in the county(29 to 32),the state (27 to 30) and the nation(35 to 38).As the Baby Boomers age,increases in median age are expected and a rising senior population is forecasted.That aging trend is evident in Salt Lake City,but to a lesser extent than in the nation as a whole. Figure I-4 compares Salt Lake City's residents by age in 2000,2010 and 2014.The balance of the county's and surrounding counties'age profile is also included for comparison. Figure 1-4. Age Profile,Salt Lake City, Balance of Salt Lake County and Surrounding Counties, 2000, 2010, and 2014 (Adult Millennials:18-34) A Children(<18) Ages 18-24 Ages 25-34 Ages 35-44 Ages 45-64 Seniors(65,) Salt Lake City 2014 21% 14% 2 10% 2010 23% 14% 2' 9% 2000 24% 15% 20% Balance of County 2014 30% 9% 15% —14% 10% 2010 31% 10% 16%-111 13% 9% 2000 32% 12% 15% 15% 7% Davis County 2014 34% 9% 15% 13% 9% 2010 34% 9% 16% 12% 8% 2000 35% 12% 14% 14% 7% Utah County 2014 35% 16% 16% 12% 7% 2010 35% 16% 17% 11% 6% 2000 34% 21% 15% 11% 6% Source: 2010 Census,2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION I, PAGE 5 Millennials and seniors are two populations of focus for housing planners,as many believe these two groups will drive changes in housing demand over the coming decades. • Millennials are aging into adulthood and their housing preferences are widely debated but most predictions expect millennials to seek out urban communities that offer alternative forms of transportation such as walking,biking and transit.They tend to form households later than previous generations and,so far,have lower homeownership rates than previous generations.' • As baby boomers age into senior status,their housing preferences may also change in ways that could have substantial market impacts.Some will choose to downsize,often moving to attached housing in more urban areas or locations in close proximity to health or other amenities.Most seniors are likely to age in place but may need accessibility accommodations/modifications to their home.They may also require in-home services and/or better access to transit and health services. As shown in the previous figure,Salt Lake City has a much higher proportion of adult millennials (35%)than the balance of the county(24%).2 Post-college aged millennials (25-34) account for 21 percent of the city population—higher than peer cities such as Boise (14%) and Portland (19%) and on par with popular millennial cities such as Austin and Denver(both 22%).Indeed a recent study by Headlight Data showed that the Salt Lake City metro area as a whole ranked second among all large metros (those with at least 1,000,000 residents) for the most millennials as a proportion of the population—second only to Austin,Texas.3 The same report indicated that the Salt Lake City metro area had one of the greatest decreases in millennials aged 25 to 34 between 2009 and 2014,dropping from 19 percent to 17 percent of the total population.This was not true of the city,however: the proportion of millennials increased very slightly(.5 percentage points) over the same period. In contrast,the senior population in Salt Lake City is lower than surrounding areas and lower than the nation as a whole.Between 2000 and 2014,the proportion of the city's population 45 and older increased from 28 percent to 30 percent.However,the senior subset of that population(those aged 65 and older) actually decreased as a proportion of the total population—from 11 percent to 10 percent. Aging was more pronounced in the balance of county where the proportion of residents 45 and older increased from 26 percent to 31 percent and the proportion of seniors increased from7 percent to 10 percent. The following two maps present age characteristics by geography for Salt Lake City residents: Figure I-5 displays the proportion of Census tract residents that are adult millennials (ages 18- 34) and Figure I-6 displays the proportions that are seniors. 1 In Salt Lake City,21 percent of millennials aged 25 to 34 are homeowners,similar to peer cities'millennials of the same age (26%in Denver,20%in Austin and 22%in Portland). 2 The Millennial generation includes persons ranging in age from about 15 to about 34.Adult Millennials are those aged 18 to 34 and post-college aged Millennials are aged 25 to 34. 3 http://www.headlightdata.com/news---media/millennials-large-metros BBC RESEARCH&CONSULTING SECTION I, PAGE 6 Figure 1-5. Percent of Census Tract Residents that are Adult Millennials,Salt Lake City 2014 Great Salt Lake •T, �- 1 f ' TRAX Route rj Percent Adult Millennials(Residents 18-34) —z�V'" ffp I r . Less than 25% ,I 25%to35% �. - •— f 35%to 50% , t r 34— M Greater than 50% !� fert_ �r� City Creek f M Salt Lake City .i ,' International ® Capitol Hill Airport Northwest [ •1' !1 'T Q Avenues / ._oujoisl, Northwest uadran.tLi, ii); ....�.. ..�...4 UnIVf/Siry �/ /: �� f II \\ICen ral I Community of Utah t r / ,1& Westside East Bench � '' ./ 1 tip` -- �� • ' i ,�..- -� or SugarHouse !"2 / 215 A s Sources:Esn.USO ZOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 ACS Census and BBC Research&Consulting. Millennials are most likely to live downtown,in Central Community and near the university. Portions of Sugar House also have a relatively high representation of millennials.Seniors are more likely to live on the eastern side of the city,particularly in the City Creek Canyon,Avenues and portions of the East Bench planning areas.These are also areas with relatively high housing values and,as much,may be cost prohibitive for young families. According to the Governor's Office of Management and Budget population forecasts,by 2020, one in 10 residents living in Salt Lake County will be 65 or older.4 Relative to out-of-state peer communities,such as Denver,and the nation as a whole,forecasted growth in the Salt Lake senior population is low.As such,Salt Lake is less likely to experience a significant"graying"of the population.Even so,Salt Lake County's population forecasts suggest there will be a decrease in the proportion of the population under 40 and an increase in the proportion 40 or older— particularly those aged 60 or older—between now and 2020.Such a shift can have significant impact on housing preferences and service demands. 4 Projections by age were not available at the city level. BBC RESEARCH&CONSULTING SECTION I, PAGE 7 Figure 1-6. Percent of Census Tract Residents that are Seniors,Salt Lake City 2014 Great Salt Lake _;_f- f+ ligl:', 'r / TRAX Route Percent Seniors(Residents Over Age 65) —GJ.� r Less than 5% 15%to 0% -. t ..: _i di I♦Greater than 15% r7♦ ..r— City Creek LJ i;,' ® .( .// t Salt Lake City /l � International Capitol Hill " I Airport I 'J Northwest •�' + Avenues _) Northwest Quadrant �{ 4y - University r � ' �. . Cen ral Community oJurnh • Jr Westside �— �, East Bench .. .f - _ ,. ' - fr... (80� } e /( .) Sugar-House ' /. II , �d.. I �2,s/..." i i T. iSources:Elul.USCLrrvOM Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 ACS Census and BBC Research&Consulting. Race and ethnicity. Sixty-five percent of Salt Lake City residents are non-Hispanic white; 35 percent belong to a minority group.About one in five (21%) are Hispanic,6 percent are Asian and 2 percent are African American.The county and the state are somewhat less diverse with population distributions that are 28 and 21 percent minority respectively.Figure I-7on the next page displays the population by race/ethnicity for Salt Lake City in 2000,2010 and 2014. BBC RESEARCH&CONSULTING SECTION I, PAGE 8 Figure 1-7. Race and Ethnicity,Salt Lake City,2000,2010 and 2014 2000 2010 2014 Growth 2000 to 2010 Growth 2010 to 2014 Number Percent Number Percent Number Percent Total CAGR Total CAGR Total Population 181,743 100% 186,440 100% 190,873 100% 3% 0.3% 2% 0.6% Race and Ethnicity Combined All minority groups 53,366 29% 64,115 34% 66,008 35% 20% 1.9% 3% 0.7% Non-Hispanic white 128,377 71% 122,325 66% 124,865 65% -5% -0.5% 2% 0.5% Race Detail Black or African American 3,433 2% 5,088 3% 3,363 2% 48% 4.0% -34% -9.8% American Indian and Alaska Native 2,442 1% 2,316 1% 3,077 2% -5% -0.5% 33% 7.4% Asian 6,579 4% 8,247 4% 10,684 6% 25% 2.3% 30% 6.7% Native Hawaiian/Pacific Islander 3,437 2% 3,776 2% 4,296 2% 10% 0.9% 14% 3.3% White 143,933 79% 140,080 75% 137,726 72% -3% -0.3% -2% -0.4% Some other race 15,482 9% 20,036 11% 25,575 13% 29% 2.6% 28% 6.3% Two or more races 6,437 4% 6,897 4% 6,152 3% 7% 0.7% -11% -2.8% Ethnicity Detail Hispanic 34,254 19% 41,637 22% 39,686 21% 22% 2.0% -5% -1.2% Non-Hispanic 147,489 81% 144,803 78% 151,187 79% -2% -0.2% 4% 1.1% Note: Census data on race and ethnic identification vary with how people choose to identify themselves.The U.S.Census Bureau treats race and ethnicity separately:the Bureau does not classify Hispanic/Latino as a race, but rather as an identification of origin and ethnicity.In 2000,15,556 Hispanic respondents racially identified as white and 15,188 Hispanic respondents racially identified as Some other race.In 2014,12,861 Hispanic respondents racially identified as white and 25,030 Hispanic respondents racially identified as Some other race. Source: 2000 Census,2010 Census,2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION I,PAGE 9 Between 2000 and 2010 all of Salt Lake City's population growth was attributable to growth in the minority population.During that time the non-Hispanic white population in the city decreased by 5 percent while the minority population increased by 20 percent.Similar patterns were evident in surrounding areas and peer cities.5 However,between 2010 and 2014,growth in the Salt Lake City minority population slowed (0.7%CAGR between 2010 and 2014 compared to 1.9%CAGR between 2000 and 2010) and growth in the non-Hispanic white population increased(0.5%CAGR between 2010 and 2014 compared to slight numerical decline between 2000 and 2010). Figure I-8 provides a graphical representation of the racial/ethnic distribution of Salt Lake City in 2000,2010 and 2014.Despite the difference in growth rates between minorities and non- Hispanic whites,changes in the overall distribution of the population were relatively small.The minority population,as a proportion of total population,increased from 29 percent in 2000 to 34 percent in 2010 and 35 percent in 2014.The Hispanic share of the population increased from 19 percent in 2000 to 22 percent in 2010 but dropped back to 21 percent in 2014. Assuming constant growth rates for minorities and non-Hispanic whites,the city could be minority majority in the future,although this would not occur until at least 2042 (based on the growth rates between 2000 and 2010). Figure 1-8. 71% 66% 65% Racial and Ethnic Composition,Salt Lake City,2000,2010,and 2014 Source: 2000 Census,2010 Census,2014 ACS and BBC Research& Consulting. Non-Hispanic white 11% 12% 14% Other Minority 19% 22% 21% Hispanic 2000 2010 2014 Figure I-9 shows the percentage of minorities out of the total population and the percentage of the largest racial/ethnic group in Salt Lake City,surrounding counties and the state in 2000 and 2014.Across all geographies,the percentage of minorities and the percentage of Hispanic residents have increased over the last fifteen years.Salt Lake City also has the largest percentage of minorities and Hispanic residents. 5 http://www.brookings.edu/—/media/research/files/papers/2011/5/04%20census%20ethnicity%20frey/0504_census_ ethnicity_frey.pdf. BBC RESEARCH&CONSULTING SECTION I,PAGE 10 Figure 1-9. 2000 2014 Racial and Ethnic Composition,Salt Lake City, 29%of 35%of Surrounding population are population are Counties and State, minorities minorities 2000 and 2014 Salt Lake City Note: 19%are 21%are Percentages calculated from Hispanic Hispanic total population. Source: 2000 Census,2014 ACS and BBC 19%of 27%of Research&Consulting. population are population are minorities minorities Salt Lake County 12%are 17%are Hispanic Hispanic 10%of 15%of population are population are minorities minorities Davis County 5%are 9%are Hispanic Hispanic 11%of 16%of population are population are minorities minorities Utah County 7%are 11%are Hispanic Hispanic 15%of 20%of population are population are minorities minorities Utah 9%are 13%are Hispanic Hispanic BBC RESEARCH&CONSULTING SECTION I,PAGE 11 Racial/ethnic segregation. In addition to the proportion of residents who are minorities,it is important to consider the geographic distribution of minority groups throughout the city. Research increasingly shows the importance of neighborhood on economic and social outcomes, particularly for children in low income households. In some cases,minority concentrations are a reflection of preferences—e.g.,minorities may choose to live near family and friends of the same race/ethnicities or where they have access to grocery stores or restaurants that cater to them.In other cases,minority populations are intentionally steered away or discouraged from living in certain areas.Housing prices can also heavily influence where minorities live,to the extent that there are economic disparities among persons of different races and ethnicities. The maps on the following pages show geographically where residents of different races and ethnicities may be concentrated within Salt Lake City.These racial and ethnic concentration maps use HUD's definition of concentrations: ■ A Census tract in which the percentage of households in a particular racial or ethnic minority group is at least 20 percentage points higher than the city overall; ■ The total percentage of minority persons is at least 20 percentage points higher than the total percentage of all minorities in the housing market areas as a whole;or ■ If a metropolitan area,the total percentage of minority persons exceeds 50 percent. Figures I-10 and I-11 display the Hispanic population proportion and total minority population proportion in Salt Lake City by Census tract.Minorities are concentrated in most Census tracts West of I-15.Hispanics,in particular,are concentrated in the Westside planning area and in portions of the Northwest planning area. BBC RESEARCH&CONSULTING SECTION I,PAGE 12 Figure 1-10. Percent of Census Tract Population that is Minority,Salt Lake City 2014 Great Salt Lake Wi:� yTRAX Routeri '' Percent Minority Residents Less than 15% -4 � / �� 1 �'t 15%to 25% 25%t0 40% 40%to 53% i t ri"� Greater than 53%(Concentrated Tracts) dt,, ""'/.. 'r— City Creek - uu // Salt Lake City ' 0International Capitol Hill . Airport Northwe t n •1 ( -, ' Avenues ltorthweat_Quadran -LC ,{ t ... ! vJrt :..M..d j university ( t - \Cen rat Community �'of Utah • Jr f Eastenc ;'` '•f W stsi � Bench 7l1 ••.• • ,.r....•• - � r 0 —Sugar ! __., ".•-:- I IL ( Sources:Esn,USG.GOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Sources: 2010-2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION I, PAGE 13 Figure I-11. Percent of Census Tract Population that is Hispanic,Salt Lake City 2014 g Great Salt Lake J! `pi -- ti TRAX Route , ice or Percent Hispanic Residents _/qI J.t� I r Less than 10% ,1 10%to 20%to 20% t ,,4, r;f =30%to 40% l Q - Greater than 40% ��` �#� Pt— ..,___ City Creek // r Salt Lake City /. International Capitol H(Avenues ' . " 1 Airport 'J Northwesv, •/ y�r ) ' !Vo[lhwest_Quadrant ....11)1 „.. Mer .r, . 24 university t Cen rat Community i°f u 1 r` ,f • East Bench ` r stsi 7l1 •.• - >Sugar°House v , r of } ( ; ( Sources:Esn,USGS'OAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Sources: 2010-2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION I, PAGE 14 Disability. In 2014,about 18,540 Salt Lake City residents-10 percent of the total population— had at least one type of disability.Among residents aged 65 and older,38 percent had a disability.Figure I-12 displays disability incidence rates by age group for Salt Lake City. Figure 1-12. Disability by Age Cohort, Number of Number with Percent of Salt Lake City,2014 Residents a Disability Residents Total Residents 189,945 18,540 10% Note: Total resident amount differs from Residents 5 years and younger 11,913 0 0% other population totals because the Census data on population varies Residents 5 to 17 years 27,927 1,225 4% depending on the variable(e.g.,could include or exclude people living in group Hearing 46 0% quarters). Vision 256 1% Cognitive 866 3% Sources: Ambulatory 46 0% 2014 American Community Survey and Self-care 123 0% BBC Research&Consulting. Population 18 to 64 years 132,406 10,530 8% Hearing 1,839 1% Vision 1,345 1% Cognitive 5,476 4% Ambulatory 4,161 3% Self-care 1,191 1% Independent living 3,645 3% Population 65 years and over 17,699 6,785 38% Hearing 3,358 19% Vision 1,425 8% Cognitive 1,180 7% Ambulatory 4,111 23% Self-care 1,033 6% Independent living 2,706 15% Education.Salt Lake City residents are relatively well educated: approximately 42 percent of city residents 25 or older have at least a bachelor's degree,compared to 32 percent in the county and 31 percent in the state overall.However,the city also has a slightly higher proportion of residents that did not complete high school (13%)than the state (9%) or county(10%). Compared to a peer city,such as Denver,the educational attainment of Salt Lake City is pretty typical.In Denver, 15 percent of residents 25 and older had less than a high school degree and 44 percent had a bachelor's degree or higher.Boise had fewer residents with less than a high school degree (6%) and a bachelor's degree or higher(39%). Figure I-13 shows educational attainment for the Salt Lake City population 25 years and older and surrounding counties. BBC RESEARCH&CONSULTING SECTION I, PAGE 15 Figure 1-13. 13% E Salt Lake City Educational Attainment, 10% Salt Lake City, Balance of Salt Less than high school 6% Lake County and Surrounding 7% Balance of Salt Lake Counties, 2014 County 17% High school degree 24% 1. Sources: (or equivalent) Davis County 2014 ACS and BBC Research&Consulting. 18% 20% Utah County Some college 27% 30% 35% 8% Associate's degree 9% 10% 10% 24% Bachelor's degree 20% 21% 21% 18% 10% Graduate degree 9% 8% Figure I-14 shows educational attainment by gender,foreign born residents,poverty rate and median earnings for Salt Lake City,surrounding counties and the state. In Salt Lake City, educational attainment among male and female residents is almost identical.At the county and state level,educational attainment differs by gender with male residents obtaining higher levels of education than female residents.Foreign born residents have relatively low educational attainment in all geographies,with large percentages having less than a high school education. BBC RESEARCH&CONSULTING SECTION I,PAGE 16 Figure 1-14. Educational Attainment by Demographic Profile,Salt Lake City,Surrounding Counties and State, 2014 Salt Lake City Salt Lake County Davis County Utah County Utah Number Percent Number Percent Number Percent Number Percent Number Percent Male,25 years and over 62,335 323,598 88,591 130,518 815,629 Less than high school 8,602 14% 37,214 12% 4,341 5% 8,614 7% 77,485 10% High School degree 10,846 17% 71,839 22% 17,009 19% 20,100 15% 182,701 22% Some college or Associate's degree 16,955 27% 107,758 33% 31,716 36% 47,248 36% 284,655 35% Bachelor's degree 14,524 23% 65,043 20% 22,148 25% 34,065 26% 168,020 21% Graduate degree 11,470 18% 41,421 13% 13,200 15% 20,491 16% 103,585 13% Female,25 years and over 59,383 327,201 92,034 132,249 827,099 Less than high school 7,839 13% 33,375 10% 4,049 4% 8,332 6% 70,303 9% High School degree 10,095 17% 76,892 24% 21,628 24% 24,466 19% 199,331 24% Some college or Associate's degree 16,212 27% 120,083 37% 39,299 43% 56,999 43% 325,050 39% Bachelor's degree 14,905 25% 66,749 20% 21,168 23% 33,459 25% 168,728 20% Graduate degree 10,333 17% 30,757 9% 5,890 6% 8,993 7% 63,687 8% Foreign Born 25,618 106,718 12,595 29,391 191,504 Less than high school 10,068 39% 35,781 34% 2,213 18% 7,374 25% 61,502 32% High School degree 4,881 19% 25,234 24% 3,500 28% 6,070 21% 45,205 24% Some college or Associate's degree 3,701 14% 21,355 20% 3,493 28% 8,334 28% 42,190 22% Bachelor's degree 3,361 13% 14,823 14% 2,438 19% 4,988 17% 27,002 14% Graduate degree 3,607 14% 9,525 9% 951 8% 2,625 9% 15,605 8% Poverty Rate,25 years and over Less than high school -- 34% -- 25% -- 18% -- 24% -- 24% High School degree -- 21% -- 12% -- 10% -- 11% -- 11% Some college or Associate's degree -- 17% -- 9% -- 6% -- 9% -- 9% Bachelor's degree or higher -- 7% -- 4% -- 3% -- 5% -- 5% Median Earnings $31,675 $35,349 $40,709 $35,316 $35,208 Less than high school $19,724 -- $21,950 -- $23,560 -- $21,304 -- $21,669 -- High School degree $22,610 -- $28,940 -- $30,186 -- $27,743 -- $29,114 -- Some college or Associate's degree $27,164 -- $33,099 -- $34,982 -- $30,350 -- $31,990 -- Bachelor's degree $39,202 -- $44,781 -- $51,417 -- $42,660 -- $44,412 -- Graduate degree $59,406 -- $63,021 -- $73,782 -- $71,023 -- $64,877 -- Source: 2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION I, PAGE 17 Economic Indicators As a complement to the demographic profile,this section discusses the economic indicators for Salt Lake City residents and workers focusing on the following topics:labor force and unemployment,employment and earnings by industry,and commuting patterns. Labor force and unemployment.Among Salt Lake City residents aged 16 and older, 71 percent,about 110,000 residents,participate in the labor force.This means that these residents were currently employed (either part-time or full-time) or were actively looking for a job. As displayed by Figure I-14,the city has historically exhibited similar trends in unemployment as the county and state.Typically,a city's unemployment rate is slightly higher than a metro area or state due to higher proportions of low income residents—yet since 2010 unemployment in the city has held below county and state rates.As of January 2016,Salt Lake City's unemployment rate was 3.1 percent and Salt Lake County's unemployment rate was 3.3 percent. Figure 1-14. Unemployment Rates,Salt Lake City,Surrounding Counties,State and the U.S., 1990 through 2015 \\\/ 9% - 7% - —United States —Utah 5% Davis County —Utah County 4% - Salt Lake County o Salt Lake City 3/0 - / V 2% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: Bureau of Labor Statistics and BBC Research&Consulting. Commuting. Salt Lake City is a job center for the region as a whole,hosting many more jobs than working residents.According to the US Census Bureau's Longitudinal Employer-Household Dynamics,there are 33,968 workers that both live and work in Salt Lake City.Another 173,548 people work in Salt Lake City but live outside the city.In addition,44,274 people live in the city but commute to jobs outside the city.The top commuting destinations for Salt Lake City BBC RESEARCH&CONSULTING SECTION I,PAGE 18 residents working outside the city are Millcreek(10%),West Valley City(7%),South Salt Lake City(4%) and Sandy(4%). That means just 16 percent of Salt Lake City jobs are held by city residents,compared to 43 percent in Boise and 29 percent in Denver. About 43 percent of Salt Lake City's working residents have jobs in the city,compared to 47 percent in Denver and 67 percent in Boise. Employment and earnings by industry. Figure I-15 displays employment by industry for people working in the city and for people living in the city.The figure also displays the average 2014 wage for each industry. Figure 1-15. Employment and Earnings by Industry,Salt Lake City,2014 Industry(average wage) Proportion of residents/workers Health and Social Services($43,000) 1111 13% 13% Job distribution for SLC residents Educational Services($35,000) 13% 3% Retail Trade($33,000) IMMIl 10% Job distribution for 7% SLC workers Hospitality($17,000) 9% 7% Professional Services($73,000) 8% 9% Manufacturing($58,000) 7g6 11% Admin and Waste Services($32,000) 7% 6% Finance and Insurance($70,000) MEI % 6 Public Administration($47,000) 49f: 9% Transportation and =I 44Yo Warehousing($47,000) 7% Construction($50,000) 4% 3% Wholesale Trade($66,000) `g0 5% Information($63,000) !2% Other Services ($36,000) 1.1 3% 3% Management of Companies($88,000) 4% Real Estate ($48,000) • 2% 2% Arts and Recreation($31,000) Ill 2% 1% Utilities($90,000) 0 y0% Mining($92,000) 100.3.4% % Natural Resources($34,000) I gy•01% Note: People who live and work the city are included in both distributions.Average annual wages are estimated for the county as a whole.. Source: US Census Bureau's Longitudinal Employer-Household Dynamics,Bureau of Labor Statistics Quarterly Census of Employment and Wages(BLS QCEW)and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION I,PAGE 19 Health and Social Services supports the largest proportion of both residents (13%) and workers (14%). For residents,the next largest sectors are Education,Retail and Hospitality—all relatively low paying industries. For workers,the next largest sectors are Manufacturing,Public Administration and Education.Both Manufacturing and Public Administration have higher-than- average annual wages. The state,Salt Lake County,and the city are all major employers in Salt Lake City.The top ten largest employers in Salt Lake City are: 1. State of Utah 6. USPS 2. Intermountain Health Care 7. L3 Communications Group 3. UofU 8. SLC School District 4. Smith's Food and Drug Center 9. Delta 5. Salt Lake County 10. Salt Lake City Projections by industry.The Utah Governor's Office of Planning and Budget provides employment projections by industry at the county level.Figure I-16 shows the projected growth of each industry between 2010 and 2020 for Salt Lake County.The industries are listed in order of highest to lowest average 2014 wage. BBC RESEARCH&CONSULTING SECTION I, PAGE 20 Figure 1-16. Employment Projections by Industry,Salt Lake County,2010 to 2020 Mining($92,000) 5% -21% Management of Companies($88,000) 5% Professional Services($73,000) Finance and Insurance($70,000)1 -1% Wholesale Trade($66,000) 16% Information($63,000) 22% Manufacturing($58,000) 15% Construction($50,000) 31% Real Estate ($48,000) 18% Public Administration($47,000) 19% Transportation and Warehousing($47,000) 15% Health and Social Services($43,000) 25% Other Services ($36,000) 14% Educational Services($35,000) 14% Natural Resources($34,000) I-0.3% Retail Trade($33,000) 13% Admin and Waste Services($32,000) 45% Arts and Recreation($31,000) 22% Hospitality($17,000) 12% Note: Average annual wages reflect 2011 estimates. Sources: Governor's Office of Management and Budget Demographic and Economic Analysis,BLS QCEW and BBC Research&Consulting. The utilities industry and the finance and insurance industry are both projected to shrink between 2010 and 2020.The utilities industry,which includes electric power,natural gas,steam supply,water supply and sewage removal,has relatively high wages but employed only a small proportion of the workforce in 2010 (less than 1%).The industries with the highest projected growth are Administrative and Waste Services,Professional Services and Construction. Both Professional Services and Construction have relatively high average wages. BBC RESEARCH&CONSULTING SECTION I, PAGE 21 SECTION II . Income Profile SECTION II. Income Profile The community income profile analyzes resident incomes through the lens of housing affordability.The analysis evaluates distribution of households by income group,incomes of renters and owners and the number and proportion of cost burdened households.Key findings from this section include: ■ Median household income in Salt Lake City was$46,711 in 2014—somewhat lower than surrounding suburbs,which is typical for a central city.The countywide median was $62,672 in 2014. ■ Resident incomes in Salt Lake City increased at about the same rate as the county(both 12%)between 2011 and 2014.Owners experienced higher percentage gains in median income than renters (8%compared to 4%).However,income increases were not enough to keep pace with rising home prices and rents. ■ The city has relatively few middle and upper income households and a high proportion of low income households.Forty percent of city households earn less than$35,000 per year. This is partly related to the presence of the University of Utah in Salt Lake City. ■ Nearly half(49%) of renters and 22 percent of owners in Salt Lake City are cost burdened— spending 30%or more of their income on housing. Income and Poverty In 2014,the median household income for Salt Lake City was$46,711,compared to$62,672 for the county as a whole.As is often the case for urban centers,Salt Lake City's median income was lower than many surrounding,suburban communities. Figure II-1 shows the median income for Salt Lake City along with surrounding municipalities,Salt Lake County and the State of Utah. BBC RESEARCH&CONSULTING SECTION II,PAGE 1 Figure II-1. Draper $94,852 Median Income,Salt Lake City Surrounding Communities, South Jordan $91,228 Surrounding Counties and Farmington $84,110 State,2014 Sandy $83,399 Note: Davis County $70,388 Data presented for Salt Lake City,Salt Lake West Jordan $67,453 County and Utah reflect 2014 5-year estimates; data for all other jurisdictions reflect 2014 1- Layton $65,504 year estimates. Bountiful $64,630 Salt Lake County $62,672 Sources: 2014 ACS 1-year and 5-year estimates and BBC Utah $60,922 Research&Consulting. Utah County $60,830 West Valley City $56,037 Murray $53,797 Salt Lake City $46,711 Ogden $41,891 Income growth for the city between 2011 and 2014 was similar to the county overall—median income for both the city and the county increased by 12 percent over the period. Income balance and economic segregation.The city has fewer middle and upper income households compared to the county and state and a higher proportion of low income households. Forty percent of households in the city earn less than$35,000 per year,compared to 25 percent for the county and 26 percent for the state.Figure II-2 displays the distribution of household incomes for Salt Lake City,Salt Lake County and the State of Utah. Figure 11-2. Income Distribution,Salt Lake City,Surrounding Counties and State, 2014 e.:i cili Upper Income • <$20,000 Salt Lake City 144m 17% 12% 12% 6% $20,000-$34,999 Salt Lake County 12% 13% 12% 21% 15% 20% 6% E $35,000-$49,999 Davis County 9% 10% 22% 17% $50,000-$74,999 $75,000-$99,999 Utah CountyEMIEEr 14% 21% 15% 20% 3% $100,000-$199,999 Utah EZIEML36 22% 15% 19% 4% >=$200,000 Sources: 2014 AC5 and BBC Research&Consulting. Although the proportion of low income residents is high,income mobility is also high.According to a recent study comparing upward mobility across metropolitan areas,the Salt Lake City MSA has one of the highest rates of income mobility of any major metro: more than one in ten children that were raised in the bottom fifth rise to the top fifth.On average,a child who grows BBC RESEARCH&CONSULTING SECTION II, PAGE 2 up in the Salt Lake City metro area with parents who earn$16,000 or less per year(bottom 10th percentile)will end up in the 43rd percentile of earnings ($52,000).1 Residents of the Salt Lake City metro area may be a bit of an anomaly by this measure since they form families and have children at relatively early ages,often while they are completing college. This would suggest that low income children whose parents who are enrolled in educational and job training programs may have a better chance at upward mobility. For low income residents looking for housing options or rental subsidies,fair market rents (FMR) can help determine affordability or subsidy amounts.HUD sets the FMRs annually depending on supply and demand constraints and current housing market conditions.FMRs are a primary parameter in rental housing voucher programs.2 Figure II-3 shows the FMRs by bedroom type for Salt Lake County. Figure 11-3. Fair Market Rents by Bedroom Type,Salt Lake County, 2016 Final FY 2016 FMRs By Unit Bedrooms Source: Efficiency $603 HUD 2016 FMR datasets and BBC Research&Consulting. One-Bedroom $757 Two-Bedroom $938 Three-Bedroom $1,351 Four-Bedroom $1,575 Figure II-4 maps income balance by Census tract in Salt Lake City.Income balance is a measure of the share of households in the tract that are lower income (less than$35,000),middle income ($35,000-$100,000) and high income (over$100,000).Similar thresholds were used in a recent Pew study on income segregation and are consistent with the way that Americans self-identify as members of socio-economic classes. We used statistical methods to determine an income balance rating for each tract:if all income categories were within one standard deviation of the city-wide average,the tract was considered "mixed income;"when the proportion of a particular income group exceeded one standard deviation above the mean that group was considered to be overrepresented. In other words,"mixed income"tracts generally reflect the income balance of the city whereas other tracts have a specific income group that is disproportionately represented and may be economically segregated. As displayed in Figure II-4,mixed income Census tracts are common downtown and in portions of the Capitol Hill planning area.Some neighborhoods within the Avenues,Central Community and Sugar House planning areas are also well-balanced.The disproportionately low income areas around the University of Utah are related to the student population. ihttp://www.equality-of-opportunity.org/. 2https://www.huduser.gov/periodicals/ushmc/winter98/summary-2.html\. BBC RESEARCH&CONSULTING SECTION II,PAGE 3 Figure 11-4. Income Balance by Census Tract,Salt Lake City 2014 Great Salt Lake J! `pd.,TRAX Route . Income Mix* -L 0:4 1 r = Disproportionately Low Income t Disproportionately Moderate Income •' .''- ./" /' f.4' Disproportionately High Income WI Mixed Income � F-1/_,-- . r 'r— City Creek �- - Salt Lake City ® e 1 l r fl International Capitol Hill r 1 Airport 'J Northwest \ • •,r .A ' Avenues ,{� r N 'Owst 'u t // r flsid Cen ral Co=munit• fI^ / ,f East Bench ` 'f� 7'11 -j J ti't i v " .. —Sugar House ,! r f V ( ' I Sources:EMI,USG.GOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. *Household Incomes defined as:Low-Less than 35k,Moderate-35k to 99k and High-Over 100K Sources: 2010-2014 ACS and BBC Research&Consulting. Income by AMI. HUD Area Median Income (AMI) is used by HUD's state and local policy makers to qualify households for housing programs.AMI is the same for all counties located within the Salt Lake City MSA:$72,200 in 2015 for a four-person household.As displayed in Figure II-5,about one-quarter of Salt Lake City households earn less than 30 percent of the area median income.Another 15 percent earn less than half the area median income. BBC RESEARCH&CONSULTING SECTION II, PAGE 4 Figure 11-5. Number of Percent of Income Distribution by Income Limit Households Households HAMFI,Salt Lake City, 2014 HUD Area Median Income(AMI) $72,200 0-30%ofAMI $24,250 19,635 26% Sources: 31-50%of AMI $36,100 11,051 15% 2014 ACS,HUD and BBC Research& 51-80%of AMI $57,750 13,608 18% Consulting. 81-100%of AMI $72,200 7,588 10% 101-120%of AMI $86,640 5,661 7% More than 120%of AMI $86,640+ 18,380 24% Poverty.The poverty rate for Salt Lake City was 21 percent in 2014,down slightly from 22 percent in 2010 but still substantially higher than the county and the state(both at 12%).3 Because of the presence of the University of Utah—the limited incomes of students can inflate true poverty numbers—family poverty may be a better measure of true poverty in the city. Fifteen percent of Salt Lake City families lived in poverty in 2014,somewhat higher than peer cities such as Boise(9%)and Denver(12%).Ogden had a relatively high rate of family poverty (18%)but most suburban communities outside Salt Lake City had low rates of family poverty. Figure II-6 displays individual poverty by age and family poverty by household type for the city. Poverty is highest for children (30%of all children in the city are living in poverty),especially those living in single parent households (34%of single parent households are living in poverty). Figure 11-6. Poverty,Salt Lake City,2014 Number Living Percent Living in Poverty in Poverty Source: Individuals 2011 ACS and BBC Research&Consulting. All people 40,248 21% Children(under 18 years) 11,763 30% Adults(18 years and over) 28,485 19% 18 to 64 years 26,699 21% 65 years and over 1,786 10% Families All Families 5,707 15% with children 4,579 23% Married couple families 2,848 10% with children 2,003 15% All single parent households 2,577 39% Single father households 239 13% Single mother households 2,337 49% Figure I1-7 maps poverty rates in Salt Lake City by Census tract.The darkest green shading indicates a poverty rate exceeding 40 percent;research has shown that a 40 percent poverty threshold is the point at which an area becomes socially and economically dysfunctional. 3 Following the Office of Management and Budget's(OMB)Statistical Policy Directive 14,the Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty.For example,in 2014,the federal poverty threshold for individuals was$12,071 and the threshold for a family of four(with two children)was$24,008. BBC RESEARCH&CONSULTING SECTION II,PAGE 5 Individual poverty is high in the Westside planning area and portions of the Northwest and Central Community planning areas. The high poverty areas west of I-15 are highly correlated with Hispanic concentrations displayed in Section I of this report(Figure I-11).High poverty around the University of Utah reflects the low incomes of students. Most areas of high poverty do seem to be well-served by the TRAX light rail line,except the southwestern portions of the Westside planning area. Figure 11-7. Poverty Rate by Census Tract,Salt Lake City,2014 Great Salt Lake r TRAX Route di WP. Percent Living in Poverty 'J,r f f#04/;" i4 !. Less than 10% /4' 10%to 20% t I. ri'— ir/ x 20%to 30% 30%to 40% ri " _- t Greater than 40% `'v�/� � — i � / •: / � . j City Creek ,'— " 10),/Salt Lake CityInternational Capitol HillAirport . .-4! Northwest # 1 • ' FB�/y I. 1 Avenues ,1 . y�, LNoivadrant el Ii _ r Ij`�' 'r• a Jr Cen ral Community , ;' Westside C East Bench 'r 1� _ _� I _. ll, I r r as ,� /� `— .SugarHouse r pi. if r Ii`d.. ®��'r ik I f Sources:Esn.USGS,NOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION II, PAGE 6 Income by Tenure In 1999,the median income for renters was$24,887 compared to$52,525 for owners.Between 1999 and 2014,the gap between renter and owner incomes widened as owner incomes increased by 37 percent while renter incomes only increased by 22 percent.In 2014,the median household income for Salt Lake City renters was$30,360 and that of owners was$71,903. Figure 11-8. Median Income Percent Change Median Income by Tenure, Salt Lake City,1999-2014 1999- 2011- 1999- 1999 2011 2014 2011 2014 2014 Source: 1999 Census,2011 ACS,2014 ACS and Owners $52,525 $66,297 $71,903 26% 8% 37% BBC Research&Consulting. Renters $24,887 $29,133 $30,360 17% 4% 22% Figure II-9 displays the income distribution of renters and owners in both 2011 and 2014.The proportion of renters earning less than$20,000 decreased between 2011 and 2014-some of those appear to have shifted into the next income bracket earning$20,000 to$35,000. Among owners,all cohorts earning more than$75,000 increased as a proportion of the owner population and all cohorts earning less than$75,000 decreased. Figure 11-9. Household Income Distribution by Tenure,Salt Lake City, 2011 and 2014 Renter Income Profile Owner Income Profile Less than$20,000 32%5% 2011 Less than$20,000111 2011 2014 • 2014 $20,000 to$34,999 25% $20,000 to$34,999 26% $35,000 to$49,999 13%• $35,000 to$49,999 ME $50,000 to$74,999 =11 $50,000 to$74,999 $75,000 to$99,999 5% $75,000 to$99,999 MI6 $100,000 to$149,999 F/0 $100,000 to$149,999 MI ►93'� 15% $150,000 or more �e $150,000 or more ° Source: 2011 ACS,2014 ACS and BBC Research&Consulting. Figure II-10 displays the 2014 income distribution of renters and owners using the HUD AMI ($72,200),which applies to the entire Salt Lake City MSA. More than one-third of all renters earn 30 percent or less of AMI and nearly 60 percent of renters earn 50 percent or less of AMI.Only 11 percent of owners earn 30 percent or less of HAMFI and 19 percent earn 50 percent or less of AMI. BBC RESEARCH&CONSULTING SECTION II,PAGE 7 Figure 11-10. Household Renters Owners Income by AMI Number Percent Number Percent and Tenure,Salt Lake City,2014 HUD Area Median Income(AMI) $72,200 0-30%of AMI $24,250 15,744 38% 3,892 11% Source: 31-50%of AMI $36,100 8,421 20% 2,630 8% 2014 AC5 and BBC 51-80%of AMI $57,750 6,917 17% 6,691 19% Research&Consulting. 81-100%of AMI $72,200 3,479 8% 4,109 12% 101-120%of AMI $86,640 2,205 5% 3,456 10% More than 120%of AMI $86,640+ 4,466 11% 13,914 40% Cost Burden In addition to income,it is important to consider residents'housing expenses relative to their income.Residents spending 30 percent or more of their income on housing are said to be"cost burdened"and residents spending 50 percent or more of their income on housing are said to be "severely cost burdened." Nearly half(49%) of all renters (18,672 households) in Salt Lake City are cost burdened. Twenty-three percent of renters are severely cost burdened.Owners are far less likely to be cost-burdened: in Salt Lake City 22 percent of owners (7,599 households) are cost burdened and 8 percent are severely cost burdened. Figure II-11 displays housing costs as a percentage of monthly income for Salt Lake City households. Figure II-11. Percent of Income Cost Burden by Tenure, Spent on Housing Proportion of Renters/Owners Salt Lake City,2014 14% Less than 15% Note: Cost-burdened households spend 30 percent or more of their monthly 37% income on housing expenses. 15%to 29.9')/0 Source: 2014 ACS and BBC Research& 26% Consulting. 30%to 49.9% a0 1. Renters Owner with a mortgage 50%or more 9% Owners without a mortgage 0 Figures II-12 and II-13 display the proportion of renters and owners that are cost burdened by Census tract in Salt Lake City.The Westside planning area contains a high proportion of cost burdened renters and cost burdened owners.The Northwest planning area also contains a high proportion of renters that are cost burdened. BBC RESEARCH&CONSULTING SECTION II, PAGE 8 Figure 11-12. Proportion of Census Tract Renter Household that are Cost-Burdened,Salt Lake City,2014 Great Salt Lake gj ."r TRAX Route " /, Percent Cost-Burdened Renters Less than 20% —G0 i� 11•J 20%to 40% J '� _ 40%to 50% , MI 50%to 60% t r/f Greater than 60% `.`rW-Oei I , . / City Creek // t Salt Lake City ® ir 1 International ® \ Capitol Hill ,. Airport Northwest,- �' 1 ') ' ,Avenues Northwest Quadrant ; _ 1 -11—LIPM '—L....... �' :'7• �._. University • - t Can rt.... Community, of Utah • Jr - t' Westside �� East Bench .0 r �' - _ -� ��yet I . Sugar House "—lit:, IT Sources:Esn,USG.GOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION II, PAGE 9 Figure 11-13. Proportion of Census Tract Owner Household that are Cost-Burdened,Salt Lake City,2014 Great Salt Lake �- i IP , , i j, ' -' TRAX Route "` Percent Cost-Burdened Homeowners _� Less than 20% i J�r 20%to 40% ,....,f . -/- .- • I 4 F. 40%to 50% j— MI 50%to 60% tri Greater than 60% • r 5/#4, rifil City Creek 17 Salt Lake City �Ir e I International ® Capitol Htll or " I Airport ' Northwe t •1 ' ' • Avenues Northwest Quadrant �1 11 1 L. University t Cen al mmuntty of Utah I r ,,f _____ ( -._ i East Bench '` ' f Westside 40 ,•.• I •i ypt } I,j Ij �- ! ----Su le ,_ .__ie..'- I (' Sources:Esn,USGGOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION II, PAGE 10 SECTION III . Housing Profile and Affordability SECTION III. Housing Profile and Affordability This section provides an overview of Salt Lake City's housing stock,renter and owner profiles, and market trends in both the ownership and rental markets.Affordability is also discussed but market mismatches are addressed in Section IV.Key findings from this section include: • About half of Salt Lake City's housing stock is single family detached and half is attached housing(apartments,condos,townhomes,etc).The city's housing stock tends to be older and smaller than the housing stock in the balance of the county. • Salt Lake City is home to more renters (54%)than owners (46%). Renters tend to be younger,have lower levels of educational attainment and earn lower incomes than owners. Renters are also more likely to be racial/ethnic minorities. • Compared to surrounding communities,median rent is relatively low($761) and median home value ($238,700) and median sale price ($255,000) are moderate. • Both renters and owners lost purchasing power between 2011 and 2014 (continuing the trend from 2000).That is,sale prices increased faster than owner incomes and rent increased faster than renter incomes. > Median sale price for homes increased 33 percent but owner incomes increased by only 8 percent. > Median rent increased 8 percent but renter incomes increased only 4 percent. Vacancy rates around 2 percent reflect a particularly tight rental market. Existing Housing Stock According to the 2014 ACS there are 81,715 housing units (occupied and vacant)in Salt Lake City,up from 80,724 in 2010—a 1.2 percent increase.The city's housing stock accounts for 22 percent of the housing units in Salt Lake County.Just fewer than half(46%) of households in the city are owner-occupied; 54 percent are renter occupied. Housing type. Overall,about half of Salt Lake City's housing stock is single family detached and half is attached housing(apartments,condos,townhomes,etc).In Salt Lake County as a whole, about two-thirds of the housing stock is single family detached and one-third is attached. The vast majority of Salt Lake City owners (83%) live in single family detached houses and the vast majority of renters (80%)live in attached units.Figure III-1 displays housing type by tenure for Salt Lake City. BBC RESEARCH&CONSULTING SECTION III, PAGE 1 Figure III-1. Housing Type by Tenure,Salt Lake City,2014 Single family 28% 20%0 detached III ALL UNITS OWNERS RENTERS U Attached:fewer than 81,715 34,697 41,226 10 units in structure 23% 36% 83% . Attached:10 or more units in structure Source: 2014 ACS and BBC Research&Consulting. Figure III-2 displays the proportion of homes that are detached single family homes by Census tract.Not surprisingly,the city center and university area have a low proportion of detached homes and the outer portions of the city have a higher proportion of detached homes. Figure III-2. Percent of Census Tract Households that are Single Family Detached,Salt Lake City,2014 Great Salt Lake 7 i TRAX Route Percent Single Family Detached Homes _ ,0 i, Less than 20% t J� de 20%to 40% 1� _ 7 40%to 60% I l 60%to 80% ' r ! 80%to 100% wl 'fi,; - / ' H71-17 =s— City Creek (--' ` Salt Lake City '' International ( —io 3 L Capitol Hill Airport , Northwest \ •1 t1 r yi 4v nu s u f Northwest Quadrant -11-1_, (-_-.......L-. t) University . i . r le ‘•• %ofUtah tr I Con cal Community ( __ ) East Bench ;� ''• ' rWestside I r / — 80 � r `,— =SugarHouse A I .�.... � • �"t ���. :4,r•= I z+s j iSourtes:Esri,USo Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION III,PAGE 2 The diversity of structure types prevalent in the city's housing stock is consistent with the housing and community preferences Utahns expressed in the Envision Utah survey.Seventy- eight percent of Utahns want communities that include a full mix of housing types (including small lot detached homes,townhomes,condos and apartments).The survey also shows that in order to achieve that goal,Utah residents are willing to allow more housing types in more communities.' Household size and bedrooms. One-third of housing units in Salt Lake City have two bedrooms; 24 percent have fewer than two bedrooms and 42 percent have three or more bedrooms.As shown in Figure III-3,the county has a much higher proportion of larger units-68 percent of the county's housing stock has three or more bedrooms. Figure III-3. No bedroom r Salt Lake City Number of Bedrooms,Salt Lake City,2014 (studio) Salt Lake County Source: 1 bedroom 2014 ACS and BBC Research&Consulting. 2 bedrooms 21% 3 bedrooms ME=m 4 bedrooms 5 or more bedrooms On average,owner-occupied households in Salt Lake City are larger(2.62 people)than renter occupied households (2.31 people).Owner occupied units also tend to have more bedrooms than renter occupied units.Over two-thirds of owner occupied homes have three or more bedrooms, compared to just 20 percent of renter occupied homes. Age of housing stock.About 9 percent of Salt Lake City's housing stock was built in the past 15 years (since 2000); another 13 percent was built between 1980 and 2000.Nearly half(47%) was built between 1940 and 1980 and nearly one-third was built before 1940. Figure III-4 displays the city's housing stock by age; data for the county are included for comparison. When examined by tenure,the city's owner occupied units are older than renter occupied units. For example,two-thirds of owner occupied units were built before 1960 compared to less than half(46%) of renter occupied units. 1 http://envisionutah.org/projects/your-utah-your-future/item/346-results BBC RESEARCH&CONSULTING SECTION III, PAGE 3 Figurelll-4. Salt Lake City Age of Housing Stock,Salt Lake Built 2000 or later City,2014 El Salt Lake County Built 1980 to 1999 Source: 2014 ACS and BBC Research&Consulting.. Built 1960 to 1979 IMEm Built 1940 to 1959 W 14% Built 1939 or earlier 9% Age of homes can be an important indicator of housing condition: older houses tend to have more condition problems and are more likely to contain materials such as lead based paint. Approximately 32 percent of the housing units in Salt Lake City were built before 1940,when the risk of lead-based paint is highest.2 In areas where revitalization of older housing stock is active, many old houses may be in excellent condition;however,in general,condition issues are still most likely to arise in older structures. Overcrowding and substandard conditions. Other key factors to examine in evaluating housing condition are overcrowding and substandard units.Overcrowding in housing can threaten public health,strain public infrastructure,and points to an increasing need of affordable housing.This study uses HUD's definition of having more than one person per room to identify overcrowded units.3 Approximately 4 percent of the city's households—or about 3,265 households—are overcrowded.Two percent of owner-occupied housing units (533 units) were overcrowded and 7 percent of renter-occupied units (2,702 units)were overcrowded. The 2014 ACS reported that 304 housing units(vacant and occupied) in the city lacked complete plumbing facilities and 683 housing units (vacant and occupied)lacked complete kitchens. Together,assuming no overlap,these 987 severely substandard units represent 1.3 percent of the city's total housing units. Profile of Renters and Owners Salt Lake City is home to more renters (54%)than owners (46%).Renters tend to be younger, have lower levels of educational attainment and earn lower incomes than owners.Renters are also more likely to be non-family households and single-person households. Renters are also more likely to be racial/ethnic minorities. Figure 111-5 summarizes characteristics of renters and owners in Salt Lake City.The figure displays the number and distribution of renter and owner 2 Lead-based paint was banned from residential use in 1978.Housing built before 1978 is considered to have some risk,but housing built prior to 1940 is considered to have the highest risk.After 1940,paint manufacturers voluntarily began to reduce the amount of lead they added to their paint.As a result,painted surfaces in homes built before 1940 are likely to have higher levels of lead than homes built between 1940 and 1978. 3 The HUD American Housing Survey defines a room as an enclosed space used for living purposes,such as a bedroom,living or dining room,kitchen,recreation room,or another finished room suitable for year-round use.Excluded are bathrooms,laundry rooms,utility rooms,pantries,and unfinished areas. BBC RESEARCH&CONSULTING SECTION III,PAGE 4 households by demographic characteristic and also provides the homeownership rate by age group,household type,education level and race/ethnicity. Figure III-5. Profile of Renters and Owners,Salt Lake City,2014 Renters Owners Ownership Number Percent Number Percent Rate Total households 41,232 100% 34,691 100% 46% Median Income $30,360 $71,903 Age of householder Young Millennials(15-24) 5,990 15% 361 1% 6% Post-college millennials(25-34) 15,920 39% 4,191 12% 21% Ages 35-44 6,398 16% 7,241 21% 53% Ages 45-64 8,209 20% 14,386 41% 64% Seniors(65 and older) 4,715 11% 8,512 25% 64% Household Type Non-family households 24,720 60% 11,844 34% 32% Householder living alone 17,330 42% 9,747 28% 36% Families 16,512 40% 22,847 66% 58% Married couples without children 5,518 13% 11,400 33% 67% Married couples with children 4,622 11% 8,128 23% 64% Single parent hh 4,051 10% 1,565 5% 28% Other family household(no children) 2,321 6% 1,754 5% 43% Householder Educational Attainment Less than high school graduate 6,854 17% 2,288 7% 25% High school graduate(or equivalent) 7,027 17% 3,872 11% 36% Some college or associate's degree 12,896 31% 9,964 29% 44% Bachelor's degree or higher 14,455 35% 18,567 54% 56% Race/Ethnicity of householder Non-Hispanic white 28,396 69% 29603 85% 51% Hispanic 7094 17% 3414 10% 32% Other minority 5,742 14% 1,674 5% 23% Source: 2014 ACS and BBC Research&Consulting. Some of the key differences between Salt Lake City renters and owners are summarized below: ■ Median income for renters in Salt Lake City($30,360)is less than half the median income of owners ($71,903).In 1999,the median income for renters was$24,887 compared to $52,525 for owners.Between 1999 and 2014,the gap between renter and owner incomes widened as owner incomes increased by 37 percent while renter incomes only increased by 22 percent. ■ Over half of all renters in the city are millennials (aged 15-34); over one-third are post- college aged millennials (25-34).About one in five post-college millennials owns a home, compared to nearly two-thirds of residents over the age of 45. BBC RESEARCH&CONSULTING SECTION III, PAGE 5 ■ About 60 percent of renters are in non-family households,compared to 34 percent of owners.About 21 percent of renter households have children (10%are married with children and 11%are single parents) as do 28 percent of owner households (23%are married with children and just 5%are single parents).Married couples with children are much more likely to own a home (64%own a home)than single parents (28%own a home). ■ Over half of homeowners have a bachelor's degree or higher and only 7 percent failed to complete high school.Among renters, 17 percent have less than a high school degree and 35 percent have a bachelor's degree or higher. ■ Renters are much more likely than owners to belong to a racial or ethnic minority group: 31 percent of renters are either Hispanic or some other minority compared to 15 percent of homeowners.Overall,51 percent of non-Hispanic white residents own their homes, compared to 32 percent of Hispanic residents and 23 percent of other minority residents. Figure III-6 maps the homeownership rate for each Census tract in the city.The Central Community planning area is predominately renter occupied as is the area immediately surrounding the University.City Creek Canyon has a very high proportion of owners,as does the northern half of the Avenues planning area.The northwest corner of the city,along with the east side of the Sugar House and East Bench planning areas,also has a high rate of homeownership. For the most part,Census tracts adjacent to the TRAX light rail line are majority renter. BBC RESEARCH&CONSULTING SECTION III,PAGE 6 Figure III-6. Percent of Census Tract Households that are Owner Occupied,Salt Lake City,2014 Great Salt Lake 7 TRAX Route Percent Owner-Occupied Households _� Less than 20% t J� 20%to 40% 01:4-41,1',.. 40%to 60% 60%to 80% f� ::: / Ciry'GFe`ek , , Salt Lake City 0 ilnte Capitol Hill. " I Airport 'J Northwest •�' ' s' 151 111-111 4venues_ ii.,,,i _Northwest Quadrant .'� ,.,,_,..."0„ — 4117 _ ,, .k.... ........, __67.7.. ,, i j University t -d...r--5fUtah r' lr� Cen ral Community ,f Westside� East Bench ,:.1 t Sugar House _ / M. 1 ' Sources:Esn,USGSAIOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 5-year ACS and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION III, PAGE 7 Housing Cost and Affordability This section of the report discusses housing costs in Salt Lake City through the lens of affordability.The for-sale,or ownership market,is discussed first,followed by the rental market. Ownership market. Similar to most housing markets across the country,Salt Lake City experienced substantial increases in home values between 2000 and 2007 followed by a drop in values and sales activity as the housing bubble burst.However,the impact in Salt Lake City(6% decline in home values between 2007 and 2011)was not as severe as in the U.S.as a whole(11% decline in values). Since early 2012,home prices and home value in Salt Lake City have been on the rise.By the end of 2014 the median sale price ($235,000) exceeded the 2007 peak median sale price of $223,751.Figure III-7 displays the median home value and the median sales price for Salt Lake City in select years between 1999 and 2014. Figure III-7. Median Home Value and Median Sales Price Trends,Salt Lake City, 1999 through 2014 $300,000 - $250,000 $240,200 $238,700 Median+ Value $225,600 235,000 Median Sales Price $200,000 - 23,75 $180,5 $153,300 $177,204 $150,000 $159,768 $130,429 $100,000 - $50,000 1999 2005 2007 2011 2014 Source: 2000 Census;2005,2007,2011 and 2014 ACS,Salt Lake Board of Realtors and BBC Research&Consulting. Home value.According to the 2014 ACS,the median value of owner-occupied homes in Salt Lake City was$238,700,very similar to the median value for the county as a whole ($241,500). Figure 111-8 displays the distribution of Salt Lake City homes by value.Approximately 22 percent of homes are valued at less than$150,000 and another 13 percent are valued between$150,000 and$200,000.Nearly half of the city's homes are valued between$200,000 and$500,000 and 13 percent are valued above$500,000. BBC RESEARCH&CONSULTING SECTION III, PAGE 8 Figure III-8. Salt Lake City Home Value Distribution, Less than$50,000 Salt Lake City,2014 Salt Lake County $50,000 to$99,999 r Source: 2011 American Community Survey and BBCBC Research&Consulting. $100,000 to$149,999 =MI $150,000 to$199,999 $200,000 to$299,999 $300,000 to$499,999 $500,000 to$999,999 M. $1,000,000 or more 1g, Figure III-9 compares the median home value in Salt Lake City to that of surrounding communities,Salt Lake County and the State of Utah.Salt Lake City home values are in the middle portion of the range defined by surrounding communities. Figure III-9. Draper $372,600 Median Home Value,Salt Lake City and Surrounding South Jordan $324,100 Communities, 2014 Sandy $282,500 Note: Farmington $274,200 Data presented for Salt Lake City,Salt Bountiful $243,700 Lake County and Utah reflect 2014 5- year estimates;data for all other Salt Lake County $241,500 jurisdictions reflect 20141-year estimates. Salt Lake City $238,700 West Jordan $227,300 Sources: 2014 ACS 1-year and 5-year estimates Murray $225,300 and BBC Research&Consulting. State of Utah $223,200 Layton $212,500 West Valley City $168,500 Ogden $134,500 Within the geographic boundaries of Salt Lake City,home values are highest in the north and east portions of the city and lowest west of I-15.Figure III-10 displays the median home value by Census tract for Salt Lake City. BBC RESEARCH&CONSULTING SECTION III, PAGE 9 Figure III-10. Median Home Value by Census Tract,Salt Lake City,2014 ,� , Great Salt Lake �- r TRAX Route "` 0/� 0 '� i ,Median Home Value —4�t J��::,,:i �Less than$150,000 $150,000 to$200,000 _Jt '^ ��I /$150,000 to$200,000 =$300,000 to$400,000 r�1f ,- M Greater than$400,000 `4 !JI'i' ' /! • / , ril Ili_ /4)' ,--f'- „ - • t -;' Salt Lake City I1 0 International •\..it.l P Airporthw Northwest ' Not: est_QUadrant -L, I / fer ••iI ' T' 'i university ' ' .'`' r Central Community °f Utah if / .jr Westside East Bench -r` Ir hr_____..._ilr.1 M.� r Sugar House SO.,!� / Y 4 V 1 I Sources:Esn,USG.GOAA Note: The Census tract containing the Westside planning area extends outside the city limits and captures portions of north West Valley City. Source: 2010-2014 5-yearACS and BBC Research&Consulting. Home sales. In Q1-Q3 of 2015,about 3,600 homes were sold in Salt Lake City for a median sale price of$255,000.Seventy-seven percent of sales were single family detached homes,a proportion slightly below the 83 percent of owner-occupied homes in the city that are single family detached. Between 2005 and 2015,housing prices increased faster in the city(57%)than in the county as a whole (43%). Prices for detached homes increased faster than attached homes (condos, townhomes and twins) in both the city and the county. Figure III-11 displays the median sold price for Salt Lake City and Salt Lake County by housing type and year(2005,2012,2014 and 2015). BBC RESEARCH&CONSULTING SECTION III, PAGE 10 Figure III-11. Median Sold Price for Homes in Salt Lake City and Salt Lake County,2005 to 2015 Percent Change 2005 2012 2014 2015 2005-2015 Salt Lake City All Homes $162,500 $185,000 $235,000 $255,000 57% Single Family Detached $172,500 $196,893 $255,000 $277,000 61% Attached* $129,950 $145,000 $174,950 $174,950 35% Salt Lake County All Homes $175,000 $195,000 $235,000 $250,000 43% Single Family Detached $187,500 $212,000 $255,500 $275,000 47% Attached* $132,900 $144,050 $174,900 $185,000 39% Note: Attached includes condos,townhomes and twins.Data from 2015 includes only the first three quarters of the year. Source: Multiple List Service(MLS)and BBC Research&Consulting. Figure III-12 compares the 2015 median sale price for homes sold in Salt Lake City to surrounding communities.Similar to Salt Lake City home values (Figure III-9),the median sales price of Salt Lake City homes is in the middle portion of the range defined by surrounding communities. Figure III-12. Draper $340,000 Median Sold Price,Salt Lake City and Surrounding Communities, South Jordan $324,500 2015 Sandy $283,000 Note: Salt Lake City $255,000 Data from 2015 includes only the first three quarters of the year. Salt Lake County $250,000 West Jordan $234,000 Source: Multiple List Service(MLS)and BBC Research& Murray $219,500 Consulting. West Valley City $190,000 Ownership affordability.As discussed in the Income Profile (Section II of this report),owners experienced higher percentage gains in median income than renters between 2011 and 2014. However,income increases were not enough to keep pace with rising housing costs,even after accounting for lower interest rates in 2014. In 2011,the median sale price of$177,204 demanded a buyer income of$45,262 assuming a 30 year fixed rate mortgage with a 4.25 percent interest rate and assuming about 30 percent of monthly housing costs are for taxes,utilities,etc. In 2014,the median sale price was$235,000 and required an income of$57,890 under the same mortgage assumptions but with a lower interest rate (3.95%). The increase in income required to afford the change in median sale price was 28 percent.The actual increase in median owner income was 8 percent. BBC RESEARCH&CONSULTING SECTION III,PAGE 11 Rental market.According to market reports,apartment vacancy rates in the Greater Salt Lake Area were at a fourteen year low in early 2015—indicating a very tight rental market.4 The 2014 ACS reports median rent(including utilities) in Salt Lake City to be$819 per month,up from $761 in 2011 and$564 in 2000.The increase in rent between 2011 and 2014 in the city(8%) was on part with median rent in the county overall,which increased by 9 percent over the same period(from$859 to$939 per month). Vacancy rates.The ACS reports a 2014 rental vacancy rate of 4 percent for the City of Salt Lake. Market reports for the county overall suggest an even lower vacancy rate of 2.7 percent(as of September 2015)—the lowest vacancy rate in fourteen years. In 2011,the area's vacancy rate for apartments was 5.2 percent.Vacancy rates are lowest for studios (vacancy rate of less than 2.0%)and three bedroom two bath units (2.0%vacant) indicating substantial demand for both the smallest and largest units on the market.5 Distribution of rents.As shown in Figure III-13,most Salt Lake City renters (57%) pay between $500 and$1,000 for their units.Five percent pay less than$300 and 9 percent pay more than $1,500 per month. The rent distribution of the county is shifted toward higher rents relative to the city. Figure III-13. Salt Lake City Gross Rent Distribution,Salt Lake Less than$300 r City,2014 11 Salt Lake County $300 to$499 Ir Source: 2014 and BBC Research&Consulting. $500 to$749 1 $750 to$999 32% $1,000 to$1,499 31%1 $1,500 or more Figure III-14 compares the median rent in Salt Lake City to that of surrounding communities,Salt Lake County and the State of Utah.As indicated by the figure,the median rent in Salt Lake City is relatively affordable compared to surrounding communities. 4 Apartment Market Report,Greater Salt Lake Area.September 2015.A Cushman&Wakefield Commerce Research Publication. Available online at http://www.comre.com/research 5 Ibid. BBC RESEARCH&CONSULTING SECTION III,PAGE 12 Figure III-14. Median Rent,Salt Lake City and South Jordan $1,401 Surrounding Communities,2014 Draper $1,194 Note: Sandy $1,155 Data presented for Salt Lake City,Salt Lake County West Jordan $1,059 and Utah reflect 2014 5-year estimates;data for all other jurisdictions reflect 2014 1-year estimates. West Valley City $963 Salt Lake County $939 Sources: 2014 ACS 1-year and 5-year estimates and BBC Murray $919 Research&Consulting. Bountiful $894 State of Utah $886 Layton $863 Farmington $861 Salt Lake City $819 Ogden $725 Within the city,rents are highest in the northeast portion of the city and some portions of the East Bench planning area.However,portions of the Westside planning area and the Northwest Quadrant also have relatively high median rent.Figure III-15 displays the median rent(including utilities)by Census tract for Salt Lake City. BBC RESEARCH&CONSULTING SECTION III, PAGE 13 Figure III-15. Median Gross Rent by Census Tract,Salt Lake City,2014 Great Salt Lake �- r TRAX Route Median Rent ,L e. e , Less than$600 $600 to$750 ��'�_ `L /� $750 to$900 1 11 =$900 to$1,100 r�f ,- M Greater than$1,100 `4 f/% - —- / • c- ,i r1.1 Ill / - ' 7 is•- . ," e Salt Lake City /� International •.qt./ 1 Airport Northwest •�' 7.1 .'".A:'1 _` . /j , Northwest Quadrant __ . �:'; University � ( - t -711! �` Central Comrnunity� °f llt�ah�� Jr • Ir East Bench r•f _ Westsidc •.� '� ri L sugar House ! r—a 1111--1410 ; I I ( Sources:Esn,US.GOAA Source: 2010-2014 ACS and BBC Research&Consulting. Market rates.The ACS data on median rent and rental distribution is a comprehensive analysis of what all renters currently pay for rent.However,those data might not reflect what is available on the market for a household looking to rent. A survey of apartment complexes in the Greater Salt Lake area shows that average rents county-wide were$907 in 2015,up from$754 in 2011 (20%increase).Average rent by unit size ranged from$638 for a studio to$1,132 for a three- bedroom,two-bath unit.Average rent was highest for apartment communities with 100 to 250 units at$960.Average rent for larger complexes (with more than 250 units)was$896 and average rent for smaller complexes (fewer than 100 units)was$823.6 BBC also tracked Salt Lake City rental listings on KSL.com between mid-October and mid- December of 2015.Over that period,484 rentals were listed with an average rent of$1,059 per month.Nearly one-quarter of the rentals listed were single family homes (23%);another 13 percent were listed as townhomes or condos.Those rental types commanded the highest 6 Apartment Market Report,Greater Salt Lake Area.September 2015.A Cushman&Wakefield Commerce Research Publication. Available online at http://www.comre.com/research BBC RESEARCH&CONSULTING SECTION III,PAGE 14 average rents:$1,611 for single family homes and$1,236 for townhomes/condos.Average rents for apartments and other multifamily units listed on KSL.com was$899. Permit data indicate that the inventory of apartment units in Salt Lake County overall is increasing.Nearly 2,800 permits were issued in 2014—up from 1,700 each of the previous two years.As of June 2015,922 additional permits had been issued for new apartment construction. Renter affordability. Between 2011 and 2014 renters in Salt Lake City lost purchasing power as rents increased faster than incomes.Median rent increased by 8 percent in Salt Lake City from $761 in 2011 to$819 in 2014.In order to afford the increase in rent,renters'annual incomes would have needed to increase by$2,320 between 2011 and 2014;however actual increase in renter median income was only$1,227. Renter affordability gaps by income level are discussed in detail in Section IV,Market Mismatches. Assisted rental housing.According to the U.S.Department of Housing and Urban Development (HUD)there are 3,026 publicly supported housing units in Salt Lake City.About half of those are supported through the housing choice voucher program.Voucher holders are most likely to live in the south central or eastern portions of the city. Low Income Housing Tax Credit(LIHTC) developments,which are not included in the above estimates also provide income restricted rental options for Salt Lake City residents.There are about 50 LIHTC developments in the city and most are located in the Central Community or downtown planning areas. BBC RESEARCH&CONSULTING SECTION III,PAGE 15 SECTION IV. Market Mismatches and Gaps SECTION IV. Market Mismatches and Gaps To examine how well Salt Lake City's current housing market meets the needs of its residents— and to determine how likely it is to accommodate demand of future residents and workers—BBC conducted a modeling effort called a"gaps analysis." The analysis compares the supply of housing at various price points to the number of households who can afford such housing.If there are more housing units than households,the market is"over-supplying"housing at that price range.Conversely,if there are too few units,the market is"under-supplying"housing. This section uses the results of the gaps analysis to answer the following questions: 1. How easy is it for renters to find units in their affordability range? 2. How easy is it for renters who want to be homeowners to buy in Salt Lake City? 3. Can current owners afford to buy in the city if they want to buy up or downsize? 4. What can workers afford? Rental Gaps Affordability for renters has two components: mismatches in the rental market and ownership opportunities for renters wanting to buy. The gaps analysis conducted for renters in Salt Lake City addresses both rental affordability and ownership opportunities. Mismatch in rental market. Figure IV-lcompares the number of renter households in Salt Lake City in 2014,their income levels,the maximum monthly rent they could afford without being cost-burdened,and the number of units in the market that were affordable to them.The "Rental Gap"column shows the difference between the number of renter households and the number of rental units affordable to them.Negative numbers (in parentheses)indicate a shortage of units at the specific income level;positive units indicate an excess of units. BBC RESEARCH&CONSULTING SECTION IV,PAGE 1 Figure IV-1. Mismatch in Rental Market,Salt Lake City, 2014 Maximum Affordable Rent, Renters Rental Units Income Range Including Utilities Number Percent Number Percent Rental Gap Less than$5,000 $125 3,082 8% 364 1% (2,719) $5,000 to$9,999 $250 3,259 8% 1,188 3% (2,071) $10,000 to$14,999 $375 2,714 7% 1,250 3% (1,464) $15,000 to$19,999 $500 3,569 9% 2,356 6% (1,213) $20,000 to$24,999 $625 3,023 8% 4,713 11% 1,691 $25,000 to$34,999 $875 7,288 18% 13,785 33% 6,497 $35,000 to$49,999 $1,250 5,261 13% 10,811 26% 5,551 $50,000 to$74,999 $1,875 5,809 15% 5,843 14% 34 $75,000 or more $1875+ 5,788 15% 1,327 3% (4,461) Total/Low Income Gap 39,792 100% 41,637 100% (7,467) Source: 2014 American Community Survey and BBC Research&Consulting. The gaps analysis in Figure IV-1 shows that: • Sixteen percent of renters in Salt Lake City earn less than$10,000 per year.These renters need units that cost less than$250 per month to avoid being cost burdened.Just 4 percent of rental units in the city rent for less than$250 per month. ➢ Over 3,000 renters earn less than$5,000 per year.There are only 364 rental units priced at their affordability range (less than$125 per month).This leaves a "gap,"or shortage,of 2,700 units for these extremely low income households. ➢ Another 3,300 households earn between$5,000 and$10,000 per year.These households have 1,200 affordable units to choose from,leaving a shortage of 2,100 rental units. • Rental unit shortages also exist for renters earning between$10,000 and$15,000 per year (2,800 renters v. 1,250 units=gap of 1,500 units) and those earning between$15,000 and $20,000 per year(3,600 renters and 2,400 units=gap of 1,200 units). • Altogether,the city has a shortage of rental units priced affordably for renters earning less than$20,000 per year of 7,467 units (down from a gap of 8,240 units in 2011).Some of these renters are students.1 These households are also working residents earning low wages,residents who are unemployed and residents who are disabled and cannot work-in other words,those residents who are truly living in poverty.2 1 Data limitations make it difficult to separate out renters who are students and may receive assistance paying rent from parents,student loans and/or other non-income sources.These students affect the rental market in a number of ways but their true economic need for affordable units is unknown. 2 It is important to note that these renters are not homeless.Those renters who cannot find affordability priced rentals are living in units that cost more than they can afford.These households are"cost burdened." BBC RESEARCH&CONSULTING SECTION IV,PAGE 2 In sum,the private rental market in Salt Lake City largely serves renters earning between $20,000 and$50,000 per year-70 percent of rental units are priced within that group's affordability range. The market fails to adequately serve the 32 percent of renters earning less than$20,000 per year—only 12 percent of units are priced within that group's affordability range,even when accounting for the impact of housing choice vouchers.There are 12,624 renters earning less than $20,000 and 5,158 units affordable to them,leaving a gap of 7,467. Despite some losses in rental affordability(discussed in Section II),the rental gap narrowed slightly between 2011 and 2014—falling from 8,240 units to 7,467 units.That decrease in need is primarily related to the increase in renter incomes between 2011 and 2014,which resulted in fewer renters earning less than$20,000 per year. Figure IV-2. 2011 2014 Rental Gap Comparison, Salt Lake City, 2011 and Number of units affordable to renters 2014 5,226 5,158 earning less than$20,000 per year Number of renters earning less than - 13,466 12,624 Source: $20,000 per year BBC Research&Consulting. Difference(rental gap) -8,240 -7,467 Gaps in the For Sale Market This section discusses how easy it is for renters at various income levels to buy in Salt Lake City. It concludes with an assessment of how easily current homeowners can buy"up" or"down"in the market. Market options for renters wanting to buy. A similar gaps analysis was conducted to evaluate the market options affordable to renters who may wish to purchase a home in Salt Lake City.Again,the model compared renters,renter income levels,the maximum monthly housing payment they could afford,and the proportion of units in the market that were affordable to them.The maximum affordable home prices shown in Figure IV-3 assume a 30-year mortgage with a 10 percent down payment and an interest rate of 3.95 percent.The estimates also incorporates property taxes,insurance and utilities (assumed to collectively account for 30%of the monthly payment). The"Renter Purchase Gap"column in Figure IV-3 shows the difference between the proportion of renter households and the proportion of homes sold in 2014 or 2015 that were affordable to them.Negative numbers (in parentheses) indicate a shortage of units at the specific income level; positive units indicate an excess of units. BBC RESEARCH&CONSULTING SECTION IV,PAGE 3 Figure IV-3. Market Options for Renters Wanting to Buy,Salt Lake City,2014/15 11- Renters who want to Cumulative buy:Maximum Total Homes for Percent of Renter Affordable Percent of Sale/Sold,2014-15 Sold Homes, Purchase Income Range Home Price all Renters Number Percent 2014-15 Gap Less than$5,000 $20,283 8% 4 0.1% 0% -8% $5,000 to$9,999 $40,566 8% 14 0.2% 0% -8% $10,000 to$14,999 $60,845 7% 24 0.3% 1% -7% $15,000 to$19,999 $81,128 9% 71 1% 1% -8% $20,000 to$24,999 $101,411 8% 157 2% 3% -6% $25,000 to$34,999 $141,976 18% 813 11% 14% -8% $35,000 to$49,999 $202,825 13% 1,742 23% 37% 9% $50,000 to$74,999 $304,240 15% 2,248 29% 66% 15% $75,000 to$99,999 $405,654 8% 1,365 18% 83% 10% $100,000 or more $405,654+ 7% 1,280 17% 100% 10% Note: Maximum affordable home price is based on a 30 year mortgage with a 10 percent down payment and an interest rate of 3.95%.Property taxes,insurance and utilities are assumed to collectively account for 30%of the monthly payment. Source: 2014 American Community Survey,Multiple List Service and BBC Research&Consulting. The for sale gaps analysis shows the Salt Lake City market to be relatively affordable for renters earning more than$35,000 per year. For renters earning less than$35,000 just 14 percent of homes are affordable,most of which are condos.For renters earning$50,000 per year 37 percent of homes are affordable and for those earning$75,000 per year two-thirds of all homes on the market are affordable. Figure IV-4 shows the typical characteristics of a home affordable to renter households earning $50,000 and$75,000 in Salt Lake City.Although older,these homes are adequately sized for a starter home and are mostly comprised of single family detached housing. Figure IV-4. Characteristics of Homes Renters earning Renters earning Affordable to Renters,Salt Lake $50,000 or less $75,000 or less City and Balance of County, Property Characteristics 2014/15 Average number of bedrooms 2.8 3.0 Note: Average number of bathrooms 1.6 1.8 Maximum affordable home price is based on a 30 Average square footage 1,359 1,587 year mortgage with a 10 percent down payment and an interest rate of 3.95%.Property taxes, Average year built 1961 1958 insurance and utilities are assumed to collectively account for 30%of the monthly payment. Property Type Single family detached 64% 72% Source: Condo 30% 23% Multiple List Service and BBC Research& Townhome 5% 4% Consulting. Figure IV-5 displays the characteristics of homes affordable to the average Salt Lake City worker (earning$48,290),both in the city and in the balance of the county.Affordable homes in the balance of the county are slightly newer and slightly larger than affordable homes in the city but overall,workers have comparable choices in the city and balance of the county. BBC RESEARCH&CONSULTING SECTION IV, PAGE 4 Figure IV-5. Characteristics of Homes Balance Salt Lake City of County Affordable to the Average Worker,Salt Lake City and Property Characteristics Balance of County,2014/15 Average number of bedrooms 2.7 3.1 Source: Average number of bathrooms 1.6 2.0 Multiple List Service(MLS)and BBC Research& Average square footage 1,338 1,544 Consulting. Average year built 1961 1979 Property type Single Family Detached 63% 58% Condo 31% 19% Townhome 5% 21% Figure IV-6 displays the location of homes affordable to households earning$50,000 and $75,000 per year in both the city and the county.The map shows all homes listed or sold in 2014 and homes listed or sold in Q1-Q3 of 2015. Figure IV-6. Homes Affordable to Households earning$50,000 and$75,000,Salt Lake County,2014/15 2014 2015 'r "jam Great Salt Lake 1 ` Great Salt Lake /) �. I Da ,is County f DaVis Couritr' ' A: Irrieedg� � _f\--Eflit L.411' Ill-- ' ' • &-----:— .. 'F'ZI 0 P r: ' : r-',.ta4a- ', . r ; ...„Iij,L11..,a„.. ,. . ,. _Ir.?---....„ ..,:45...,. :... , -, er ...5 ..t..i. --....it- ..:.------.. -.-is b ''4.Y.17a..'1..% ,r - w ;,;. If,.b,t _ J'- - ;y .v •, I. • ' . ,;-J ;..�. rj 1 __ '_f • I •• •Ir../ f e• - Ile ,.iG-.., • '•._• •w 'v.• • i; J a '411 ••. •� + ..., '• J+ri • '1,-�- r''' , Utah County4 ‘?.-- '} - / .y "Utah County, ..� �, --- 'L. .r' -t-�,r n: - Sources E..USGS.NCUru. 't Sources Esn.USGS.NOM, • Homes Affordable to Households Earning TRAX Route $50,000 per Year(Priced Below$202,825) University of Utah Homes Affordable to Households Earning$75,000 Q Salt Lake City Boundary per Year(Priced Between$202,825 and$304,240) Salt Lake City International Airport Note: Does not include recreational or mobile homes. Source: Multiple List Service and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION IV,PAGE 5 Current homeowner equity and options. Between 2000 and 2014,housing prices increased faster(36%)than owner incomes (26%).However,the market is still relatively affordable to current homeowners. Even if we assume owners would not use their current equity for the purchase of a new home,the distribution of market offerings is similar to the income distribution of current owners.In other words,there appears to be no substantial mismatches between owner affordability and the for sale market. What Can Workers Afford? As discussed in the Community Profile (Section I),Salt Lake City has a substantial number of in- commuters: 173,548 people work but do not live in the city.Although housing preferences among in-commuters may differ,it is important to evaluate the city's affordable options in order to understand the tradeoffs related to housing and commute.Figure IV-7 displays affordable rental and ownership options for workers earning the average county wage by industry. Among the five largest industries in Salt Lake City,which account for about half of all workers, four industries have average wages high enough to afford the city's median rent and two of the five industries (20%of all workers)have average wages high enough to afford the 2014/15 median sale price of$235,000. Overall,the average Salt Lake City worker—earning$48,290 per year—could afford 80 percent of the city's rental units and 35 percent of the homes sold in 2014/15.The same worker could afford just 30 percent of the homes in the balance of the county. BBC RESEARCH&CONSULTING SECTION IV, PAGE 6 Figure IV-7. Affordability for Workers by Industry,Salt Lake City,2014/15 Percent of Available Homes That Are Affordable Average Percent of Affordable Can Afford Affordable Can Afford Median Salt Lake Balance of Industry Annual Wage All Workers Rent Median Rent? Home Price Home Price? City County Health and Social Services $43,419 12% $1,085 MR. $176,133 no 28% 21% Manufacturing $58,279 12% $1,457 yes $236,414 48% 48% Public Administration $47,439 9% $1,186 yes $192,440 no 33% 28% Professional Services $73,341 9% $1,834 yes $297,514 64% 68% Hospitality $17,067 8% $427 no $69,234 no 1% 1% Retail Trade $33,359 7% $834 yes $135,324 no 12% 8% Transportation and Warehousing $46,531 7% $1,163 yes $188,757 no 32% 27% Finance and Insurance $69,872 6% $1,747 yes $283,442 ill61% 64% Admin and Waste Services $32,455 6% $811 no $131,656 no 11% 7% Wholesale Trade $65,700 5% $1,643 yes $266,51841 56% 60% Management of Companies $88,196 4% $2,205 yes $357,774 Yes 77% 82% Construction $49,671 4% $1,242 yes $201,495 no 36% 32% Educational Services $34,709 3% $868 yes $140,800 no 14% 9% Information $62,696 3% $1,567 yes $254,332 53% 55% Other Services $35,912 3% $898 yes $145,680 no 15% 10% Real Estate $47,609 2% $1,190 yes $193,130 no 33% 29% Arts and Recreation $30,706 1% $768 no $124,561 no 8% 5% Utilities $89,750 1% $2,244 yes $364,078 ■ 78% 82% Mining $91,939 1% $2,298 yes $372,958 80% 84% Natural Resources $33,862 0% $847 yesil $137,364 no 12% 8% Source: US Census Bureau's Longitudinal Employer-Household Dynamics,Bureau of Labor Statistics Quarterly Census of Employment and Wages(BLS QCEW),Multiple List Service(MLS),2014 American Community Survey and BBC Research&Consulting. BBC RESEARCH&CONSULTING SECTION IV, PAGE 7 APPENDIX B. HOUSING CHOICE SURVEY B3C RESEARCH & CONSULTING 2016 Growing Salt Lake:2018-2022 Growing Salt Lake:2018-2022 Salt Lake City Live Work Survey To better understand the housing choices and needs of Salt Lake City residents and those who work in Salt Lake City but live elsewhere(in-commuters),the city fielded a Live Work Survey as part of the Housing Plan.The survey was available in two forms:an extended version available online and an abbreviated version offered in person or on paper at various community events. The online survey was distributed through neighborhood associations and promoted through the city's communications department.The abbreviated paper survey was managed by a local community engagement organization,Communities United (CU),and was made available to residents living in West Salt Lake through community meetings and neighborhood activities (school events,community and recreations centers,etc.).A total of 1,409 residents and 172 in- commuters responded to the online live work survey.Another 259 residents and 76 in- commuters completed the abbreviated paper survey. Altogether,1,668 residents and 248 in-commuters responded to the survey. This report presents the findings of the survey effort and is organized around the following topics:1 • Respondent characteristics—presents demographic and socioeconomic characteristics of resident and in-commuter survey respondents; • Housing choice—discusses respondents'current housing situation,housing preferences, desire to live in Salt Lake City(in-commuters),and plans to move; • Resident housing needs—includes desired changes to home and neighborhood,housing costs,indicators of housing insecurity,experiences of housing discrimination,and accessibility needs of resident respondents; • Millennial snapshot—provides an overview of housing preferences and needs among post- college millennial residents (aged 25-35); • Paper survey results—presents the results of the abbreviated paper survey; and • Summary of findings—summarizes the overarching themes and findings from the report. 1 The results from the paper survey are presented separately from the online survey due to differences in1)the survey instruments,2)different sampling methodologies,and 3)representation of resident groups. BBC RESEARCH&CONSULTING LIVE WORK SURVEY,PAGE 1 Respondent Characteristics Respondents and the city.That the survey was open to anyone interested in participating means that the results are based on non-probability sampling methods.Unlike a statistically valid,random probability sample,the results from this survey are not necessarily representative of all Salt Lake City residents or in-commuters. Compared to Salt Lake City's demographic characteristics,the survey data over-represent homeowners (82%compared to 46%citywide),households with incomes greater than$50,000 (75%compared to 47%citywide),and householders aged 35 to 64 (61%compared to 48% citywide).The data also over-represent—albeit slightly—householders with children under 18 living in the home (30%v.24%for Salt Lake City as a whole). The survey data slightly under-represent post-college millennial householders aged 25 to 34 (20%compared to 26%citywide). Because the data are based on a non-probability sample,they are not weighted to match Salt Lake City's demographic profile.Findings are presented based on the responses received.While the results should not necessarily be projected to Salt Lake City's population,they provide insights into how residents and in-commuters make complex housing decisions,their preferences and attitudes,and can inform policy development. Residents and in-commuters. Figure 1 compares resident and in-commuter survey respondent demographic and socioeconomic characteristics.The typical Salt Lake City resident participating in the survey: ■ Is a homeowner(82%).Seventeen percent rent and 1 percent live with other adults, including parents,and are not paying rent or mortgage. ■ Is a long-time resident of Salt Lake City.Most respondents have lived in the city for at least 10 years (63%).Nearly half(45%) have lived in Salt Lake City for 20 years or more. ■ Works in Salt Lake City(83%). ■ Does not have children under 18 living in the home (70%). ■ Is white (79%).One in ten respondents identified as a racial/ethnic minority and another one in ten declined to provide race/ethnicity. Compared to resident respondents,in-commuters responding to the survey are more likely to be middle-aged,have children living in the home and have a higher household income.In- commuters are also less likely to be renters than residents. BBC RESEARCH&CONSULTING LIVE WORK SURVEY,PAGE 2 Figure 1. Comparison of Resident Residents In-Commuters and In-Commuter Survey Housing Tenure Respondent Characteristics Homeowner 82% 87% Renter 17% 8% Note: Living with others but not paying rent 1% 4% n=1409 residents and n=172 in- commuters. Household Income Less than$25,000 8% 2% Source: $25,000 up to$50,000 17% 8% BBC Research&Consulting from 2016 $50,000 up to$75,000 20% 14% Salt Lake City Live Work Survey. $75,000 up to$100,000 16% 25% $100,000 up to$150,000 20% 26% $150,000 or more 19% 26% Age Under 25 3% 1% 25 to 34 20% 18% 35 to 44 23% 32% 45 to 54 17% 26% 55 to 64 20% 16% 65 and older 17% 7% Children(under 18)living in home Yes 30% 54% No 70% 46% Race or Ethnicity White 79% 83% Hispanic 4% 2% Other minority 7% 7% Decline to respond 11% 8% Housing Choice Both residents and in-commuters shared the importance of different factors to their current housing choice decision and discussed considerations for future moves. Type of home and duration of residence.A substantial majority of both residents and in- commuters live in single family homes-79 percent and 86 percent,respectively. Resident respondents are more likely than in-commuters to live in apartments or condos but less likely to live in townhomes. As shown in Figure 2,44 percent of resident respondents report living at their current address for less than five years,compared to 37 percent of in-commuter respondents. However,an equal proportion of renter and in-commuter respondents-22 percent—has lived at their current address for 20 years or more. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 3 Figure 2. Type of Housing and Type of Housing Length of Time in 7996 � Residents Current Residence Single family home/house 86% In-Commuters Note: - 13% n=1,401 residents and n=168 in- Apartment or condo building 40/ commuters. 1% Townhome Source: 1 5% BBC Research&Consulting from 2016 Salt Lake City Live Work Duplex/Triplex/Fourplex II 6% Survey. 3% 1 Other 1 1% 2% Length of Time in Current Residence Less than 1 year 13% 10% 1 year up to 5 years 31% 27% 5 years up to 10 years 1.5% 20% 10 years up to 20 years 9118% 22% MI 20 years or more 22% 22% Essential factors for selection of current residence. Figure 3 presents how essential residents considered a number of factors to their decision to buy or rent their current home. Factors were rated on a scale of zero to nine where zero is "not at all important"and nine is "essential."The figure shows the average rating for each factor. Having the rent or mortgage fit into their budget was the most essential factor,on average, affecting residents'current housing decision,followed by having a short drive to shopping, restaurants and entertainment,owning instead of renting,and feeling safe. Of less importance was living with a known roommate,being close to quality schools,and having neighbors different than themselves. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 4 Figure 3. How important were the following factors to you when choosing your current home? Not at all important Essential 0 1 2 3 4 5 6 7 8 9 The rent/mortgage fit within my budget • 7.6 Having a short(less than 15 minutes)drive to shopping,restaurants,entertainment,etc • 7.3 Owning instead of renting • 7.2 Feeling safe/being in a low crime location • 7.2 Having parks,trails,open space near my home • 6.9 Having a short(less than 15 minutes)commute to work • 6.7 Being in an urban location • 6.3 Ease of parking my car • 6.3 Being able to have a dog or other pet • 6.0 Being able to easily walk,bike or bus to school or work or church • 6.0 The style of the home itself/architecture • 5.9 Being able to easily walk or bike to a shopping center • 5.6 Living on my own • 5.4 Being close to family and friends • 5.3 Having a lot of space inside my home(e.g.,bedrooms, extra storage,guest room,separate play room,etc.) • 5.2 Having a lot of space outside my home • 5.1 (e.g.,large backyard,garden area) Having neighbors who are similar to me • 4.8 Neighborhood amenities(e.g.,playground,pool, recreation center) • 4.7 Having neighbors who are different than me • 4.4 Being close to quality public schools/school district • 4.3 Living with a roommate I already know • 1.9 Note: n ranges from 1,235 to 1,315. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Residents and in-commuters are highly and equally cost-conscious: Both groups placed the highest importance on making sure housing costs fit within their budget. Compared to residents, in-commuters are less-likely to value being close to work and retail,an urban environment, walk-and bikeability,and having neighbors different than themselves. In-commuters place more importance than residents on safety,having space both inside and outside the home,and being close to quality schools. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 5 Desire to live in Salt Lake City. Residents and in-commuters shared their perspectives on the desirability of living in Salt Lake City relative to surrounding communities. Resident perspectives.Just 23 percent of Salt Lake City residents participating in the survey considered living in other communities when searching for their current home.These included Mill Creek, Holladay,Sandy,Murray,Bountiful and Cottonwood Heights—generally closer in suburbs and/or areas with easy mountain access. When asked what factor(s) encouraged them to choose Salt Lake City over other communities, four primary themes emerged: / "Short commute to work" • Proximity to work or commute time; "Preference to be downtown and • Amenity location factors,such as near more diverse and locally owned neighborhood and being close to businesses-restaurants,shops,etc." downtown; "Political,economic,social cultures • Culture and amenities (e.g.,diversity,urban and diversity fit with our views" lifestyle,restaurants and shopping); and "Wanted to raise our kids around cultural diversity" • Transportation options including walkability,bikeability and public transit. "Multiple transportation options: TRAX,bus,bike lanes, and even Other common responses included schools— walking to work and recreation." both University and primary schools—proximity \ —Resident survey respondents J to family and friends,and affordability. In-commuter perspectives. Most in-commuters (59%) considered Salt Lake City when making their current housing choice.Among those who did not consider Salt Lake City,the most common reason was"I needed a bigger house than I "I needed a bigger house than I could afford in Salt Lake City."Other common could afford in Salt Lake City." reasons given for not considering Salt Lake City were preference for rural or suburban environments, Top reason among in commuters who inability to afford desirable neighborhood in the city, did not consider living in Salt Lake City no desire to live in the city,and proximity to family. Among in-commuters who used to live in Salt Lake City,the top two reasons for moving out of the city were: • "I wanted a bigger home;" (36%) and • "I could not afford to buy in Salt Lake City" (28%). Nearly two in three in-commuters would consider living in Salt Lake City in the future.When asked what factor would be most important for them to consider relocating into Salt Lake City, 52 percent of respondents said affordability.This was far and above other primary factors,as shown in Figure 4. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 6 Figure 4. What is the most A home/apartment in my price range 59% important factor that would cause you to My kids moving schools or 9% graduating from high school consider relocating into Salt Lake City? Finding a home large enough for my family ■ 8% Note: Convincing my spouse/partner to move ■ 7% n=96 residents. Type of home(e.g.,architecture, downsizing,the"right"property) ■ 6% Source: My job moving into the city 5% BBC Research&Consulting from 2016 Salt Lake City Live Work School quality , 4% Survey. Safety ' 2% Other 5% Overall,the preferences expressed by both residents and in-commuters suggest that housing stock and affordability are key factors in the city's effort to attract and retain residents, particularly middle-aged householders with families. Plans to move in the next five years.About the same proportion of residents as in- commuters report that they plan to move in the next five years,as shown in Figure 5.The greatest proportion of residents and in-commuters plan to move because they rent and want to own. In-commuters are more likely to plan to move to shorten their commute time or to move to an area that is either more urban or more rural.More than one quarter of residents expect to move as a result of a job change—far more than the 3 percent of in-commuters. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 7 Figure 5. Plans to Move in the Next Five Years and Why Do you plan to move in the next 5 years? Residents 31% Of those who Yes ° responded YES 29/o In-commuters 42% No 43% 27% I am unsure 28% 3 main reasons for moving: I rent and want to own 44% 35% I plan to be in a better financial position and 42% want more from my housing situation 25% I will change jobs/the location of my job will change ° 27% 3% I want to move to a different neighborhood 18% 18/0 I live in attached housing and want 17% a detached home 5% I want to move to a neighborhood with good transit or within 14% walking distance of services,shopping and entertainment 13% I want to live in a more urban environment 9% 23% I want to live closer to my place of work 7% = 25% I want to live in a more rural environment 5% 15% I will be moving closer to or moving in with,my family/friends O°5% 3/0 I will be moving for my kids'schools M 4% NI 8% I want to live in a more suburban environment °3% 0/0 I plan to sell and take equity for savings/retirement I 1% 8/0° I need to find a house that can be made accessible(e.g.,limited 1% stairs,large doorways)for a disability 5% I own and want to rent I 1% 0% I live in a detached home and want an attached 0% home/apartment("downsize") 5% Other 24% 18% Note: n=608 residents and n=138 in-commuters. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Renter perspectives on homeownership. Sixty one percent of Salt Lake City renters wanted to buy a home in the past five years and did not,as did 83 percent of in-commuters who rent. Most had wanted to buy a detached single family home,although one in four desired attached products like townhomes and condos.Over half did not buy a home because they could not find an affordable home in their location of choice.Three of the top 10 factors renters BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 8 identified as reasons why they did not buy a home in the past five years are related to the supply side of the homeownership equation: • 52 percent could not find a home they could afford to buy in the desired location; • 16 percent could not find a home they wanted to buy in the desired location; and • 14 percent could not find the type of home they wanted to buy. Figure 6. What were the reasons why you did not buy a home? (Top Ten Responses) Could not find a home I could afford to buy in the location I wanted . IMM152% Couldn't afford the down payment . 51% I don't have enough saved for a downpayment 44% Student loans/other debt too high 29% Couldn't afford monthly payments 27% Couldn't get a mortgage 20% Ease of renting 20% Could not find a home I wanted to buy in the location I wanted 16% I have bad credit 15% Could not find the type of home I wanted to buy 14% Note: n=143 resident renters who wanted to buy a home in the past five years. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Resident Housing Needs This section discusses resident housing needs with a focus on desired changes to housing and neighborhood,condition and repairs,housing costs and insecurity,discrimination and accessibility. Satisfaction and desired changes. Overall,Salt Lake City resident respondents are very satisfied with their housing situation: 74 percent rated their level of satisfaction a seven or higher on a nine-scale (where zero was"very dissatisfied"and nine was"very satisfied"). Residents also indicated high levels of satisfaction with their neighborhood,with 70 percent of respondents rating their satisfaction a seven or higher on the same nine-scale. Even though highly satisfied,all residents were asked what they would change about their housing situation and about their neighborhood if they could.Figure 7 displays the responses. These are,for the most part,amenity preferences. For their own housing situation,residents were most likely to want to remodel or add on to their home.For their neighborhood,residents most desired increased safety,neighbors to do a better job of keeping up their homes and fewer apartments/rentals in general.They also desired access to transit and more affordable homes in their neighborhood. BBC RESEARCH&CONSULTING LIVE WORK SURVEY,PAGE 9 Figure 7. Desired Changes to Housing Situation and Neighborhood What would you change about your housing situation if you could? What would you change about your neighborhood if you could? No changes/I'm satisfied 23% My neighborhood would be safer 35% I would remodel my home 15% Neighbors would do a better job keeping up their... 27% I would make repairs that I cannot afford 9% I would like fewer apartments/rentals in general 22% I would add on to my house(more... 9% Transit(light rail,bus routes)would be closer 17% I would buy a home rather than rent 8% There would be more affordable homes to buy in my... 17% I would move to a safer neighborhood 8% I am satisfied/no changes 17% I would buy a bigger house 5% My neighborhood would have better streets and...- 14% I would downsize(move into a.... 3% I would like more parks and trails in my neighborhood 14% I would make accessibility...■ 2% More people like me would live in my neighborhood 9% I would move to a more urban.... 2% There would be fewer affordable rentals in my...- 9% I would move to a more rural/suburban..., 2% There would be more affordable homes to rent in my...- 9% Other 15% I wish my neighborhood was more kid friendly 7% I would get along better with my neighbors 6% I would like more apartments/rentals . 4% My neighborhood would be more senior-friendly ■ 3% There would be fewer affordable homes to buy in my...■ 3% My neighborhood would be more accessible for...■ 3% Other 23% Note: n=1,287. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 10 Repairs.Just over one-third (36%) of resident respondents said their home needed repairs they could not afford.These repairs ranged from landscaping to complete plumbing and electrical overhauls.Of those who indicated a need for repairs, 12 percent indicated the needed repairs make their current home unsafe to live in. Figure 8. If your home needs repairs that you currently can't afford, please list the top 3 most needed repairs. insulation electrical spnnller system driuewa sewer hornet, anum,is■e front— ) Yexterior bathroom repairs . �painti�g foundation fixgarage ■house" carpet tact■°—.., asemen-ty,airdeedsvgrrsk l. _� panes trxs `■ -floors fence Old OWS ,i,,,,,c trill.. nx , rear '"finish water= _room new re -landscaping- paint estsile.. n better —line la 9 0 .' — . ... ■ furnacremodel porch flooring ,,, pIumbIngnc ment Note: n=468. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Housing costs. On average,resident renters responding to the survey spend about$1,100 per month on rent.The average mortgage payment among resident respondents is $1,555;average HOA fees are$272,and average utilities are$263.As shown in Figure 9,housing costs among in- commuters are not materially different than housing costs reported by residents. It is also interesting to note that average rental costs are approaching average mortgage costs, especially for in-commuters. Figure 9. Monthly Housing Costs Residents In-Commuters Monthly rent $1,107 $1,243 Monthly mortgage payment(including insurance and property taxes) $1,555 $1,572 Monthly Homeowners Association Fee(if applicable) $272 $132 Total Monthly utilities including water,sewer,electric and gas $263 $319 Note: n ranges from 103 to 868 for residents and from 20 to 98 for in-commuters. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. The survey also asked residents and in-commuters what they would do with the extra dollars if their housing costs were 25 percent lower.The responses,shown in Figure 10,reveal the cost conscious nature of both residents and in-commuters.Three of the top four resident responses and three of the top five in-commuter responses were savings-related: BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 11 • 55 percent of residents and 70 percent of in-commuters would save for retirement; • 48 percent of residents and 43 percent of in-commuters would save for emergencies; and • 16 percent of residents and 17 percent of in-commuters would save for a down payment on a house. Figure 10. If you spent 25% Residents In-commuters less per month on your housing, Save for retirement 55% what would you 70% do with those Save for emergencies/emergency fund 48% extra dollars? =11,113% Take a vacation EM.19% Note: 33% n=1,014 residents and Save for a down payment on a house =16% 120 in-commuters. 17% Eat out/entertainment 15% Source: 23% BBC Research& Buy better/healthier food MI 14% Consulting from 2016 Salt 13% Lake City Live Work M11% Survey. Buy clothes,household goods 13% Home improvements 10% 3% Buy a carll 10% 8% Take care of health issue I've been putting off Mi9% 11% ..3.5 Buy things for my kids 13% Pay down debt 7% 3% Buy a bike/motorcycle/recreational vehide 5% 7% Go back to school/get job training 4%0 6% Buy home electronics/personal devices 13% 5% Other III 6% 5% Housing insecurity. Residents and in-commuters challenged by housing costs,changes in employment or other factors that make it difficult to pay housing costs pursue different strategies to afford their rent or housing.Nearly one in five residents report finding additional employment and 12 percent have friends or relatives living with them,as shown in Figure 11. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 12 Figure 11. Strategies Used by Some Had to find additional employment 18% Residents in Order to Pay Rent, Mortgage or Other Housing Costs Have friends/relatives live with you 12% Note: Live with relatives or friends 3% n=1,228. Been at risk of eviction or foredosure ■ 2% Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Some residents reduced their spending on basic needs in order to afford their rent or mortgage. As shown in Figure 12, 13 percent of residents went without needed medication/healthcare/dental care and 9 percent reduced their clothing budget.Among the basic needs considered,residents and in-commuters were least likely to reduce spending on car insurance and child care. Figure 12. In the past year,have Needed medication/ you/members of your household healthcare/dental care 13% had to reduce/go without any of the following basic needs to clothing 9% afford your rent/mortgage? Food 7% Note: Health insurance 6% n=1,228. Transportation 5% Source: BBC Research&Consulting from 2016 Salt Lake Child care . 2% City Live Work Survey. Car insurance 1% Housing discrimination.Just six percent of resident respondents felt they had experienced housing discrimination when looking for housing in Salt Lake City in the past five years.Another five percent of respondents weren't sure.The most common reason respondents provided for perceived discrimination was having pets (although not a protected class under the Fair Housing Act).Other reasons included sexual orientation (19%),age (17%),religion(15%),race (12%), and smoking or drinking alcohol(11%.This is not a protected class but could be a proxy for religious beliefs). BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 13 Figure 13. Resident Experience with Housing Discrimination In the past five years,have you experienced discrimination related to housing to rent or buy in Salt Lake City? Don't Yes If you answered"yes",what was the reason you know 6% believe you were discriminated against? 5% lr I have a pet 39% My sexual orientation 19% My age 17% My religion 15% No My race 12% 89% I smoke or drink alcohol 11% l am a woman 8% I am a single mother 8% I have an emotional support 7% animal I have kids 6% I am Hispanic/Latino(a) 6% I have a disability ■ 5% I am a college student ■ 5% I have a service animal . 4% l am a man . 4% My gender/gender identification , 2% I am an immigrant ' 1% Note: n=1,296. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Accessibility. Fourteen percent of resident respondents indicated their household included a person with some type of disability(physical,mental or developmental)—slightly higher than the proportion of Salt Lake City residents that have a disability(10%).Most resident respondents said their current house or apartment meets the accessibility needs of the member with a disability; however,23 percent of those with a disability said their house does not meet their accessibility needs.The most common improvements needed were grab bars or other bathroom improvements,handrails and ramps. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 14 Millennial Snapshot Millennial residents are a focus of planning efforts in many communities—there is an expectation that millennial housing choices may be markedly different than previous generations.This section of the report provides a snapshot of post-college millennial respondents (aged 25 to 35)to the online survey. Characteristics. Figure 14 displays the characteristics of millennial respondents compared to all respondents. Millennials are less likely to be owners and have a lower income distribution than non-millennials. Millennial residents are equally likely to have children in the home as non-millennial residents (30%).In-commuting millennials are twice as likely to have children(61%)than millennials living in the city and are also more likely to have children than other in-commuters (54%).In this respect,in-commuting millennials look more like other in-commuters than they do resident millennials. Figure 14. Post College Millennial Respondent Characteristics Post College Millennials All Ages Residents In-Commuters Residents In-Commuters Housing Tenure Homeowner 69% 70% 82% 87% Renter 29% 26% 17% 8% Living with others but not paying rent 1% 4% 1% 4% Household Income Less than$25,000 8% 0% 8% 2% $25,000 up to$50,000 22% 18% 17% 8% $50,000 up to$75,000 23% 23% 20% 14% $75,000 up to$100,000 17% 32% 16% 25% $100,000 up to$150,000 21% 14% 20% 26% $150,000 or more 9% 14% 19% 26% Children(under 18)living in home Yes 30% 61% 30% 54% No 70% 39% 70% 46% Note: n=250 millennial residents,n=23 millennial in-commuters,n=1409 total residents and n=172 total in-commuters.. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Important factors housing choice. In many ways,millennial residents are similar to other residents in the factors that were most important in choosing their current home.They are similarly—if not more—cost-conscious (most essential factor with an average rating of 8.2 on a 9.0 scale) and value proximity to shopping,feeling safe and having access to parks and trails. Millennial residents place more importance than other residents on proximity to work and less importance on owning versus renting. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 15 Though not shown in the figure,in-commuting millennials place less importance than resident millennials on distance to shopping/entertainment and work,being in an urban location,walk- and bikability,style or architecture of home,ability to have pets and proximity to trails and open space.In-commuting millennials place more importance than resident millennials on affordability(though both groups considered this the top factor),crime,owning instead of renting,ease of parking,having space both inside and outside the home and proximity to good schools. Overall,the factors important to millennial residents of the city were more similar to the factors valued by other city-dwellers than to other millennials who are in-commuters. Figure 15. How important were the following factors to you when choosing your current home? (Post College Millennials) •Post College Millennials All Residents Not at all important Essential 0 1 2 4 5 6 7 8 9 The rent/mortgage fit within my budget X • 8.2 Having a short(less than 15 minutes)drive to • 7.4 shopping,restaurants,entertainment,etc Having a short(less than 15 minutes)commute to work )C • 7.2 Feeling safe/being in a low crime location *7.1 Having parks,trails,open space near my home • 6.9 Owning instead of renting • X 6.8 Being in an urban location 6.4 Being able to easily walk,bike or bus to school * 6.2 or work or church Being able to have a dog or other pet ;40 6.2 Being able to easily walk or bike to a shopping center X • 6.1 The style of the home itself/architecture * 6.0 Ease of parking my car •x 5.9 Living on my own JM 5.5 Being close to family and friends • 5.3 Having a lot of space inside my home(e.g.,bedrooms, extra storage,guest room,separate play room,etc.) * 5.2 Having a lot of space outside my home yi (e.g.,large backyard,garden area) 5.2 Having neighbors who are similar to me 4.7 Neighborhood amenities(e.g.,playground,pool, recreation center) la 4.7 Having neighbors who are different than me • 4.4 Being close to quality public schools/school district •X 4 o Living with a roommate I already know *• 2.2 BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 16 Note: n ranges from 1,235 to 1,315 for all residents and from 244 to 252 for adult millennials. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Plans to move.Thirty nine percent of post-college millennials living in Salt Lake City plan to move in the next five years.Top reasons among those who do plan to move are a desire to own a home (44%) and expectations of better finances to improve their housing situation (47%).One in five resident millennials said they currently live in attached housing but would like to move to a detached single family home in the next five years.For post-college millennials to stay in the city,the market will need to provide affordable ownership options—including single family detached homes—in walkable and/or transit oriented neighborhoods. Figure 16. Plans to Move in the Next Five Years and Why, Post-college millennials Do you plan to move in the next 5 years? di All Residents 31% Of those who Yes — responded YES 9';, Adult Millennials 42% No 31% 27% I am unsure 30% 3 main reasons for moving: I rent and want to own 14g0 49% I plan to be in a better financial position and 42% want more from my housing situation 47% I will change jobs/the location of my job will change 27% 27% I want to move to a different neighborhood 18% 14% I live in attached housing and want 17% a detached home 22% I want to move to a neighborhood with good transit or within 14% walking distance of services,shopping and entertainment 16% I want to live in a more urban environment El 9% 8% I want to live closer to my place of work •7% 8% I want to live in a more rural environment El 5% 5% I will be moving closer to or moving in with,my family/friends •5% 6% I will be moving for my kids'schoolsII 4% 2% I want to live in a more suburban environment &3% 4% Note: n=608 all residents and n=213 post-college millennials. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Sixty one percent of post-college millennial renters living in the city wanted to buy a home in the past five years and did not.Figure 17shows the reasons those millennial renters did not BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 17 purchase a home when choosing their current residence.The top five reasons are all related to affordability—the top two were specific to downpayment affordability: • 76 percent didn't have enough saved for a downpayment; • 73 percent couldn't afford the downpayment; • 56 percent have student loans or other debt that is too high; • 54 percent could not find a home they could afford to buy in the desired location; and • 44 percent could not afford the monthly payments. Figure 17. What were the reasons why you did not buy a home?(Post-college millennials'Top Ten Responses) I don't have enough saved for a downpayment 76% Couldn't afford the down payment 73% Student loans/other debt too high 56% Could not find a home I could afford to buy in the location 54% Couldn't afford monthly payments 44% Ease of renting 29% Personal reasons(e.g.,divorce,health changed,priorities 22% Could not find the type of home I wanted to buy 20% Couldn't get a mortgage 17% Could not find a home I wanted to buy in the location I want 17% Note: n=41 resident post-college millennial renters who wanted to buy a home in the past five years. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Desired changes. Most post-college millennials express satisfaction with their housing situation and neighborhood,though their level of satisfaction lags other residents: • 62 percent of post-college millennials rated their level of satisfaction a seven or higher on a nine-scale (where zero was"very dissatisfied"and nine was"very satisfied"),compared to 74 percent of all residents; and • 67 percent rated satisfaction with their neighborhood a seven or higher,compared to 74 percent of all residents. The changes post-college millennials desired are shown in Figure 18.Post-college millennials wanted to buy a home instead of renting(17%) and remodel their current home (17%).The top neighborhood changes were similar to the desires of all residents: increase safety(410) and have neighbors that do a better job keeping up their homes (320). BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 18 Figure 18. Desired Changes to Housing Situation and Neighborhood What would you change about your housing situation if you could? What would you change about your neighborhood if you could? I would buy a home rather than rent 17% My neighborhood would be safer 41% I would remodel my home 17% Neighbors would do a better job keeping up their... 32% I would add on to my house(more... 12% Transit(light rail,bus routes)would be closer 23% I would move to a safer neighborhood 10% There would be more affordable homes to buy in my... 21% No changes/I'm satisfied 10% My neighborhood would have better streets and... 20% I would buy a bigger house 8% I would like fewer apartments/rentals in general 20% I would make repairs that I cannot afford 8% I would like more parks and trails in my neighborhood 20% I would move to a more rural/suburban...■ 2% More people like me would live in my neighborhood 12% I would move to a more urban...■ 2% There would be more affordable homes to rent in my..._ 10% I would make accessibility...' 1% I wish my neighborhood was more kid friendly 10% I would downsize(move into a...10% I am satisfied/no changes 10% Other(please specify) 13% I would get along better with my neighbors 9% There would be fewer affordable rentals in my..._ 7% I would like more apartments/rentals 5% There would be fewer affordable homes to buy in my.... 3% My neighborhood would be more senior-friendly , 2% My neighborhood would be more accessible for..., 2% Other 21% Note: n=251. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 19 Housing costs. On average,housing costs for post-college millennials were lower than other resident respondents.As shown in Figure 19,average rent among millennial residents was$961 per month and the average mortgage was$1,360. Figure 19. Monthly Housing Costs of Millennials All Adult Millennial Residents Residents Monthly rent $1,107 $961 Monthly mortgage payment(including insurance and property taxes) $1,555 $1,360 Monthly Homeowners Association Fee(if applicable) $272 $246 Total Monthly utilities including water,sewer,electric and gas $263 $209 Note: n ranges from 103 to 868 for all residents and from 23 to 197 for post-college millennial residents. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. If their housing costs were 25 percent lower,post-college millennial residents are most likely to use the money to save for emergencies (54%),save for retirement(43%),save for a downpayment(28%) or take a vacation(28%).Their responses demonstrate a similar level of cost sensitivity as other residents.Even so,millennial residents are more likely to spend the extra dollars on food,entertainment,clothes and household goods than residents of other ages. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 20 Figure 20. If you spent 25% Residents Adult Millennials less per month on your housing, Save for retirement 55% what would you a3% do with those Save for emergencies/emergency fund 48% extra dollars? 54°i Take a vacation 29% 28% Note: n=1,014 all residents and Save for a down payment on a house 16% 251 post-college 28gO millennials. Eat out/entertainment 15% 20% Source: Buy better/heatthier food 14% BBC Research& 22% Consulting from 2016 Salt Buy clothes,household goods 11% Lake City Live Work 15% Survey. 10% M Home improvements 8% Buy a car 10% 10% Take care of health issue I've been putting off 9% 10% Buy things for my kids 7�° 5% Pay down debt �90 10% Buy a bike/motorcycle/recreational vehicle s5% 7% Go back to school/get job training 14% 6% Buy home electronics/personal devices 13% 4% Other 6% Paper Survey As discussed in the introduction,the city's survey effort also included an abbreviated paper survey which was made available to residents living in West Salt Lake through community meetings and neighborhood activities(school events,community and recreations centers,etc.). The survey was offered in both English and Spanish.A total 259 residents and 76 in-commuters completed the abbreviated paper survey. Demographic characteristics. Compared to the respondents of the online survey, respondents to the paper survey had lower incomes,were more likely to be renters and were more likely to be Hispanic or Latino/a. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 21 Figure 21. Paper Survey Respondent Characteristics Abbreviated Paper Survey Extended Online Surve Residents In-Commuters Residents In-Commu Housing Tenure Homeowner 31% 29% 82% 87% Renter 65% 60% 17% 8% Living with others but not paying rent 3% 11% 1% 4% Household Income Less than$25,000 57% 61% 8% 2% $25,000 up to$50,000 32% 28% 17% 8% $50,000 up to$75,000 8% 8% 20% 14% $75,000 up to$100,000 2% 3% 16% 25% $100,000 up to$150,000 0% 0% 20% 26% $150,000 or more 0% 0% 19% 26% Race or Ethnicity White 11% 11% 79% 83% Hispanic 82% 77% 4% 2% Other minority 5% 8% 7% 7% Decline to respond 2% 3% 11% 8% Note: n=259 paper survey residents,n=62 paper survey in-commuters,n=1409 online residents and n=172 online in-commuters. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Housing costs. On average,paper survey respondents who are resident renters spent$1,153 on monthly housing costs and those who are resident owners spent$1,489 on monthly housing costs (including rent/mortgage,utilities,insurance,etc). In-commuter housing costs were similar($1,201 on average for renters and$1,413 on average for owners). These estimated housing costs are surprisingly high given the relatively low incomes of most respondents.It may be that many of the paper survey respondents are cost burdened. Indeed, the housing costs of resident respondents to the online survey are only slightly higher on average,despite having substantially higher incomes (see Figure 22). Figure 22. Monthly Housing Costs, $1,738 Paper and Online Survey $1,489111 Resident Respondents •Paper Survey Residents $1,153$1,179 Note: Online Survey Residents n=199 paper survey renters,n=101 paper survey owners,n=189 online renters and n=794 online owners. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Renters Owners Discrimination. Respondents to the paper survey were asked if they had ever experienced discrimination related to renting or buying housing and if so,what was the reason. Fifteen BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 22 percent of resident respondents indicated they had experienced discrimination—more than twice the proportion of respondents to the online survey that felt they had experienced discrimination in the last five years (6%). Among those that answered"yes,"the top reasons were being an immigrant(50%),being Hispanic (47%) and race(34%). Figure 23. Resident Experience with Housing Discrimination, Paper Survey Respondents Have you ever experienced discrimination related to renting or buying housing? If you answered"yes",what was the reason you Yes believe you were discriminated against? 15% I am an immigrant 50% I am Hispanic/Latino(a) 47% My race 34% No 85% I have a pet 11% I am a college student 11% I am a woman 11% My age - 8% Other - 8% I smoke or drink alcohol - 8% I have kids ■ 5% I am a single mother ■ 5% I have a disability 0% Note: n=249. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Accessibility.Just six percent of resident respondents to the paper survey indicated they or a member of their household have a disability,compared to 14 percent of online survey respondents.One-third of those that said"yes"indicated their home does not need their current accessibility needs (compared to just 23%of online survey respondents).Thus,paper survey respondents are less likely to have a disability(or a household member with a disability)but those that do are more likely to need accessibility improvements. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 23 Figure 24. Disability and Accessibility Do you or any member of your household If you answered"yes",does the house or have a disability of any type(physical,mental, apartment you currently live in meet your or your developmental)? familiy's accessibility needs? No 36% Yes 64% No 94% Note: n=259. Source: BBC Research&Consulting from 2016 Salt Lake City Live Work Survey. Although the paper survey was not as detailed as the online survey it does highlight housing needs among predominately low income and Hispanic households: • Affordable rental and ownership housing options; • Fair housing education and outreach to address perceived housing discrimination;and • Accessibility improvements for households including a person with a disability. Summary Key themes and findings from the survey effort are summarized below: • Residents and in-commuters are highly and equally cost-conscious: Both groups placed the highest importance on making sure housing costs fit within their budget. Location,tenure and safety were also important considerations in their current housing choice. • Compared to residents,in-commuters are less-likely to value being close to work and retail, an urban environment,walk-and bikeability,and having neighbors different than themselves.In-commuters place more importance than residents on safety,having space both inside and outside the home,and being close to quality schools. • Resident respondents chose Salt lake City over surrounding communities based on proximity to work,locational amenities,culture and transportation options (transit and walk-and bikability). • A high proportion of in-commuters considered living in the city or would consider it in the future.Among in-commuters,affordability and home size were the key factors in determining their desire and ability to live in Salt Lake City. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 24 ■ Housing costs among in-commuters are not materially different than housing costs reported by residents.For both residents and in-commuters rental costs are approaching mortgage costs. ■ A small but significant proportion of residents identified housing condition as a critical need in Salt Lake City.Four percent of all resident respondents have needed repairs that make their home unsafe and 3 percent of resident respondents need accessibility improvements to accommodate a household member with a disability. ■ Post-college millennial residents are strikingly similar to non-millennial residents in regard to their housing preferences—moreso than they are to their millennial counterparts who live outside but work in the city.Resident millennials are similarly—if not more—cost- conscious as other residents and value proximity to shopping,restaurants,entertainment and work,feeling safe and having access to parks and trails. ■ Millennials are more likely than other residents to be renters and are more likely to move in the next five years,many with the hope of purchasing a home.For post-college millennials to stay in the city,the market will need to provide affordable ownership options—including single family detached homes—in walkable and/or transit oriented neighborhoods. ■ Based on the results of the paper survey,lower income,minority residents have acute housing needs related to affordability,accessibility and discrimination in rental and for-sale housing markets. BBC RESEARCH&CONSULTING LIVE WORK SURVEY, PAGE 25 APPENDIX C. SALT LAKE CITY'S DOWNTOWN RENTAL VARKET: PAST, PRESENT, AND FUTURE KEV C. GARDNER POLICY I\STITUTE Growing Salt Lake:2018-2022 Growing Salt Lake:2018-2022 Kern C.Gardner POLICY INSTITUTE Research BriefU THE UNIVERSITY OF UTAH October 2016 Salt Lake City's Downtown Rental Market. Past, Present, and Future Authored by:James Wood I Ivory-Boyer Senior Fellow I Kern C. Gardner Policy Institute Highlights Background • In 2010, after 100 years of development, the num- The development of rental housing in downtown Salt ber of downtown rental units in Salt Lake City to- Lake City has always been prone to periods of intense taled 5,200. By 2020, that number is expected to activity followed by years of inactivity. Downtown, for double to 10,000 units and the downtown popula- the purposes of this research brief, includes the area tion will grow to 20,000, about the same popula- from approximately 700 East to 700 West and from 400 tion as Payson or Brigham City, in an area of 1.65 South to North Temple.' A look back at apartment de- square miles. velopment in this area shows that prior to the early 20th century, housing in downtown was limited to de- • Since 1910, the downtown rental market has seen tached single-family units.Tenement and row housing, several apartment development booms but the common features in some downtown markets, were size of the current boom is unprecedented. Nearly never part of the housing patterns of Salt Lake City.The 1,900 units have been completed in the past four first multifamily rental units in downtown were com- years. The current vacancy rate of these units is less pleted around 1910. Over the next few years,some no- than two percent. New downtown apartments have table apartment communities were developed along the highest rents in the state;the average rent for a South Temple and North Temple, including the Kens- studio unit is $1,000, $1,100 for a one-bedroom ington, Buckingham, Hillcrest, and Eagle Gate Apart- unit, and $1,450 fora two-bedroom,two-bath unit. ments. By 1920, the downtown rental inventory had • The magnitude of the current boom combined with reached about 1,000 units. very high rental rates seems like a recipe for an Following a six-year break, development resumed in overbuilt market. However, as of October 2016, 1926. Over the next four years, several new apartment there are no signs of a distressed market; vacancy projects were completed. Most were small apartment rates are low, rental rates are increasing, and ab- communities, less than 35 units,and by 1930 the rental sorption rates are strong. Demand for downtown inventory had increased to around 1,400 units. rentals is supported by a unique set of locational and demographic advantages. This pre-Depression apartment boom was followed by a long,quiet 50-year interlude with no new large apart- • Over the next three to four years,vacancy rates will ment developments in downtown. During these years, increase as an additional 3,000 units are complet- the rental inventory slowly increased through the con- ed. The doubling of the rental inventory by 2020 version of some owner-occupied units, to renter-occu- could dampen market conditions and investment pied housing units and the development of small scale opportunities and bring the current boom to a rental housing. close. INFORMED DECISIONSTM Kern C.Gardner Policy Institute 411 East South Temple Street,Salt Lake City,Utah 84111 I 801-585-5618 I gardner.utah.edu AN INITIATIVE OF THE DAVID ECCLES SCHOOL OF BUSINESS By the late 1970s, the downtown housing market cap- units is 5,044,just 165 units shy of doubling the down- tured the interest of developers as home building in town rental inventory in ten years. A note on the pro- the suburbs was threatened by serious overbuilding. posed projects: they are almost certain to be devel- Up to this time, downtown multifamily housing had oped. All the developers are first rate and have local been exclusively rental housing. A new concept of development experience. owner occupied multifamily housing (condominiums), By 2020, the number of renter households in down- however,was about to be tested by the 337-unit Amer- town Salt Lake City will exceed 10,000. Add the 425 ican Towers condominium project, which at the time condominiums at City Creek to the existing owner oc- was by far the largest housing development in down- cupied inventory and the downtown housing market town's history. American Towers, along with several will have close to 11,700 occupied dwelling units. The other condominium projects developed at about the downtown population will increase from 10,700 in same time, had very mixed success; in some cases, ab- 2010 to over 20,000 by 2020, equivalent to the popula- sorption took several years.In sharp contrast,the apart- tion about the size of Payson or Brigham City in just ments developed during this period were well received 1.65 miles of downtown Salt Lake City. by the market. Some 600 new rental units were devel- oped. Half of the new units were developed by Zions Table 1 Securities (now Property Reserve Inc.), the commercial Population and Housing in Downtown Salt Lake City real estate division of the Church of Jesus Christ of Lat- ter-day Saints. By 1985,this period of apartment devel- 2010 2020 forecast opment had ended. Population 10,703 20,500 It took almost 15 years before developers in the late Households 6,097 11,695 1990s returned to the downtown market. When they Average Household Size 1.75 1.75 (persons) did, both condominium and apartment development Owner Occupied Units 888 1,500 took off. Condominium development was concentrat- Renter Occupied Units 5,209 10,195 ed in remodeling and rehabilitation of existing build- Total Occupied units 6,097 11,695 ings rather than new construction while apartment de- velopment included three very large rental projects: Percent of Renter 85% 87% Households Northgate Apartments at Gateway(340 units); Brigham Source: U.S. Census for 2010 and forecast, Kern C. Gardner Policy Apartments (337 units); and the Palladio Apartments Institute,University of Utah (250 units). This building boom, which extended into the 2000s, and was stimulated by the 2002 Olympic Is the Downtown Rental Market Winter Games, pushed the downtown rental inventory to 5,200 units by the 2010 Census. It had taken roughly Overbuilt? 100 years and four periods of concentrated apartment development for the downtown rental inventory to The size of the current apartment boom is unprece- reach 5,200 units. In addition to the rental units, there dented. In just 10 years, nearly as many apartment were almost 900 owner-occupied units downtown by units will be developed downtown as were developed 2010. The 2010 Census reported a total downtown in the previous 100 years. The boom, however, has population of 10,703. The average household size was brought much higher rental rates. The 15 apartment small at 1.75 persons and rental housing accounted for projects completed since 2011 have the following aver- 85 percent of occupied housing units (see Table 1). age rents:studio$1,000,one bedroom $1,100,two-bed- room two-bath $1,450. There are no-three bedroom Since the 2010 Census, almost 4,000 new units in large units in the recently completed projects. The rents do downtown apartment projects have been added to the not include the charges for a media package, sewer, inventory; 1,864 completed units and 1,991 under con- water,trash,or parking fees,which could easily add in- struction units (see Tables 2 and 3). In addition, there other $150 to $200 to the base rent. are another 1,179 units proposed that will be built over The historic magnitude of the current boom,combined the next two to three years.The total number of corn with very high rental rates, seems like a ready-made pleted, under construction, and proposed downtown recipe for an overbuilt market.The top-end rental rates INFORMED DECISIONS TM 2 gardner.utah.edu are equivalent to the mortgage payment on the medi- are "nonfamily, not living alone and with the house- an priced home ($290,000) in Salt Lake County;surpris- holder 18 to 34 years" has increased annually at a six ingly, the vacancy rate in the 15 new projects (1,864 percent growth rate in Salt Lake City, an increase of units) is less than two percent. Furthermore, the ab- 3,000 households. For roommates who are single, sorption rates of some of the projects under construc- young professionals, and working downtown, the cost tion indicate demand is still strong in the third quarter of housing can be shared, making downtown living of 2016. much less financially intimidating. The market will be seriously tested in the next two One more favorable demographic trend is the increase years with the completion of the under construction in net in-migration. From 2009 to 2014, net in-migra- projects and the addition of the proposed projects. tion statewide never exceeded 11,000 individuals, but Probably the most interesting test case will be the in 2015, it jumped to 21,300 and is projected to aver- nearly 1,000 units under construction by Salt Develop- age 32,000 over the next four years. Conservatively, at ment north of Gateway: Hardware Villages' 470 units least one-third of these in-migrants will locate in Salt and 4th West Apartments'498 units.These two projects Lake County, and some will be attracted to the down- will have the highest quality and the highest priced town rental market, due to the nearness of employ- units in the state. Rents will be over two dollars a ment and life style considerations boosting demand square foot,or$2,000 per month for a typical two-bed- for downtown rentals. room unit. Using the typical housing cost to income ratio of 30 percent, the renter of a $2,000 apartment Location is probably the greatest and most obvious ad- would need at least $80,000 in income to afford a unit vantage of downtown living. Proximity to public trans- at Hardware Village. According to the 2015 American portation, restaurants, shopping opportunities, cultur- Community Survey, 22,500 renters in Salt Lake County al amenities, nightlife, and walking distance to 75,000 have incomes of at least $80,000, or 20 percent of all jobs makes for a unique rental market. Salt Lake City's renters. The renter pool certainly looks deep enough in Central Business District is the largest concentrated job terms of income to support the development of high- market in the state.Four out of five employees in down- priced rental units, but of course the key question is town work in office settings at jobs with an average pay preference and suitability. How many of these high in- of$52,000.This proximity to a large base of job oppor- come renters want or can (family size considerations) tunities with above average pay is integral to the suc- live in a two-bedroom two-bath unit in downtown Salt cess of downtown rental housing. Lake? Will the doubling of the downtown rental inventory in Every renter faces three primary considerations in their 10 years lead to an overbuilt market? First, a little con- decision to rent: cost, configuration (size, bedrooms, text may help. In 2015,the Salt Lake County rental mar- space), and location. The cost of renting downtown, at ket had about 126,000 occupied rental units,only 7,000 least in the newer projects, excludes about 80 percent of these units were located downtown; not quite six of the renters in Salt Lake County. The configuration of percent of the county's rental inventory. Countywide downtown rental units is a bit friendlier to renter the vacancy rate is about three percent while down- households. Sixty percent of all renter households in town the rate is less than two percent. Rental rates for Salt Lake County are one and two-person households. one and two-bedroom units in newer downtown proj- These smaller households are a deep market and well ects are 30 percent higher than similar units in the sub- matched for configurations of studio, one, and two urban market. Two thousand of the 6,700 apartment bedroom units. units presently under construction countywide are in the downtown market, and 1,200 of the 7,300 apart- Another factor affecting market depth and related to ment units proposed countywide are downtown. configuration is the relatively rapid growth of "nonfa- mily renter households", or unrelated roommates.This The recent surge in downtown apartment develop- household type—no children present—does not have ment is part of a larger apartment boom, a boom that the configuration concerns of a family household. A extends throughout Salt Lake County. The downtown two-bedroom two-bath apartment is suitable. Since market will face some competition from the large num- 2000, the number of households with individuals that ber of under construction and proposed units in the county's suburban areas as well as the several hundred INFORMED DECISIONS TM 3 gardner.utah.edu units on the periphery of the downtown market, but destabilized nor suffer double-digit vacancy rates or the fundamental advantages of a downtown location falling rents. But a doubling of the rental inventory in and favorable demographic trends will effectively off- roughly 10 years will likely dampen market conditions set much of the competitive headwinds. Employment and investment opportunities. By 2020, the current opportunities will continue to grow with development boom will very likely recede and take its place as the of new office, retail, and commercial space. One exam- fifth period of downtown rental market expansion ple is the completion of downtown's newest office since 1910. building (462,000 square feet)at 111 South Main,which should increase office employment by as much as 1,000 Table 2 jobs over the next few years. Demographically, the in- Apartment Projects Developed in Downtown Salt crease in non-related households (roommates), higher Lake City(2011-2015) levels of net in-migration, as well as the growing num- ber of individuals in the prime age group for renting Apartment Community Year Number of Built Units (18-34 years), bodes well for the apartment market in Seasons at City Creek 2011 176 general. Nearly half of all renters in Salt Lake County City Creek Landing 2011 111 are between 18-34 years old and this age group is ex Eastside Apartments 2011 180 pected to grow by five percent from 2015 to 2020, an Rendon Terrace (tax credit) 2011 70 increase of 17,000 individuals." Wasatch Advantage 2012 160 The previous four periods of apartment development Citifront II 2012 91 have typically increased the rental inventory by at least 644 City Station 2012 132 50 percent. But no previous expansion compares in rel- The Lotus 2012 84 ative or absolute terms to the present boom. In the two Cityscape 2013 122 most recent expansions (early 1980s and early 2000s), Liberty Gateway 2013 160 new apartment developments were very successful Newhouse 2015 61 and overbuilding was not an issue. In the current ex- Encore 2015 220 pansion, as noted, a total of 5,000 units will be added Seasons at Library Square 2015 119 to the market. So far, 2,000 units have been completed Seasons on the Boulevard 2015 92 and quickly absorbed by the market and the vacancy North Sixth (tax credit) 2015 86 rate is at a low of two percent. Total 1,864 Source: Ivory-Boyer Construction Database, Kern C.Gardner Policy As the remaining 3,000 units reach the market over the Institute next four years, the vacancy rate downtown will in- crease. But how much will vacancy rates increase? Even Table 3 if only 85 percent (2,550 units) of the remaining new Apartment Projects Under Construction in units were rapidly absorbed, the vacancy rate in the Downtown Salt Lake City,2015 downtown market would still be under seven percent. Rental rates are likely more vulnerable to the building Apartment Community Units boom than occupancy rates. As vacancy rates increase Fourth West Apartments 498 to more normal and healthier levels, developers and Hardware Village 470 owners will be less aggressive with their rental rate in- Liberty Crest 177 creases and may offer concessions to new renters such 360 Apartments 151 as reduced deposit and/or reduced rent. Alta Gateway 264 The Bonneville 158 A snapshot of the downtown apartment market in Oc- 616 Apartments 273 tober 2016 does not show an overbuilt market; rental rates are increasing,vacancy rates are very low,and ab- Total 1,991 sorption of new units is strong. Over the next three to Source: Ivory-Boyer Construction Database, Kern C.Gardner Policy four years, vacancy rates will increase as an additional Institute 3,000 units are completed but the market will not be INFORMED DECISIONS TM 4 gardner.utah.edu Figure 1:Map of Downtown Housing Market Study Area - — Nor h Temple Street Second Avenue I South Temple Street -) a 100 South 4.. VI °' 112 Q. . 200 South W o aa,, o N "e) N n 300 South a) (tov 400 South 400 South 500 South I 600 South Downtown Housing Market Study Area i North I 1.25 mile INFORMED DECISIONSTM 5 gardner.utah.edu Endnotes i. As defined in this research brief,downtown Salt Lake City includes approximately the area from 700 East to 700 West, 400 South to North Temple(see Figure 1).This area includes census tracts 1019,1021, 1025,part of 1140,part of 1011.01, and part of 1011.2. ii.The projected increase in the 18-34 year age group for Salt Lake County was estimated from statewide population projections published by the Kern C.Gardner Policy Institute. In both the 2000 and 2010 Census,the number of individ- uals in the 18-34 year age group in Salt Lake County was 37 percent of the statewide count of individuals in that age group. This 37 percent share was applied to the 2020 statewide population projections by age to derive the number of 18-34 year old individuals in Salt Lake County in 2020. INFORMED DECISIONS TM 6 gardner.utah.edu UO Kern C.Gardner POLICY INSTITUTE THE UNIVERSITY OF UTAH ADVISORY BOARD Advisory Board members provide stra- Ken Bullock Jill Remington Love tegic direction to the institute and help Wilford Clyde Brad Rencher establish it as an enduring community Sophia M.DiCaro Josh Romney asset that assists elected officials,busi- Lisa Eccles Charles W.Sorenson ness and community leaders,and the Spencer P.Eccles James Lee Sorenson public make informed decisions. Matt Eyring Vicki Varela Conveners Kern C.Gardner Ruth V.Watkins Michael O. Leavitt Christian Gardner Ted Wilson Mitt Romney Matthew S.Holland Natalie Gochnour,Director Clark Ivory Ex Officio Board Ron Jibson Scott Anderson,Co-Chair Senator Orrin Hatch Mike S. Leavitt Governor Gary Herbert Gail Miller,Co-Chair Vivian S.Lee Doug Anderson Speaker Greg Hughes Kimberly Gardner Martin Senate President Wayne Niederhauser Deborah Bayle Ann Millner Lane Beattie Mayor Ben McAdams Cristina Ortega Representative Brian King Cynthia A.Berg Jason Perry Roger Boyer Senator Gene Davis Taylor Randall STAFF AND FACULTY ADVISORS Natalie Gochnour,Director DJ Benway, Research Analyst Shelley Kruger,Accounting and Jennifer Robinson,Associate Director Anna Bergevin, Research Associate Finance Manager James A.Wood, Ivory-Boyer Cathy Chambless,Senior Research Jennifer Leaver,Research Analyst Senior Fellow Associate Sara McCormick,Senior Research Dianne Meppen, Director of John C.Downen,Senior Research Associate Survey Research Analyst Levi Pace,Research Analyst Pamela S.Perlich, Director of Ken Embley,Senior Research Associate Nicholas Thiriot,Communications Demographic Research Emily Harris, Demographic Analyst Specialist Juliette Tennert,Director of Michael T.Hogue,Senior Research Effie Johnson Van Noy, Utah State Economic and Public Policy Research Statistician Data Center Coordinator Adam Meirowitz, Faculty Advisor Mike Hollingshaus,Demographer Natalie Young, Research Analyst Matt Burbank, Faculty Advisor Colleen Larson,Administrative Samantha Ball, Research Associate Manager INFORMED DECISIONS TM Kern C.Gardner Policy Institute I 411 East South Temple Street,Salt Lake City,Utah 84111 I 801-585-5618 I gardner.utah.edu AN INITIATIVE OF THE DAVID ECCLES SCHOOL OF BUSINESS 151 i8 MI APPENDIX D: AFFORDABLE HOUSING FINANCE WORKING GROUP REPORT & R ECO V V E N DATI O N S Growing Salt Lake:2018-2022 Growing Salt Lake:2018-2022 -` Si ' - ::s'• ..ro ''' r 1fR � _., / ' , . 1 f t .f, ,all► _KF A a 4.i* fIUg Y- { 7 y' � :#11'- y o f Ot �ll -. fee' ,4,. _... 1 1 L . nldi _r �) fit,' J nN ^yi :,1♦~ SALT LAKE CITY HOUSING AND NEIGHBORHOOD DEVELOPMENT AFFORDABLE HOUSING FINANCE WORKING GROUP REPORT AND RECOMMENDATIONS 1 0 TABLE OF CONTENTS 1 INTRODUCTION PAGE 1 2 GLOSSARY PAGE 3 3 FINDINGS PAGE 6 4 RECOMMENDATIONS PAGE 8 5 POLICY RECOMMENDATIONS PAGE 9 6 INCENTIVES PAGE 11 7 FUNDING RESOURCES PAGE 13 8 STAFF RECOMMENDATIONS PAGE 16 ADDENDUM PAGE 17 INTRODUCTION In 2013, Housing and Neighborhood Development (HAND) identified a gap of 8,240 rental apartment units for those at 40% or below the area median income of Salt Lake County. In 2016, updated numbers revealed a slightly smaller gap of approximately 7,600 units however the decrease is a result of a growth income level and not additional housing units. Salt Lake City renters are cost burdened with half paying more than 30% of their income on housing costs; more troublesome is that a quarter of renters in Salt Lake City are paying more than 50% of their income toward housing costs. Salt Lake City has seen a market rate multifamily boom with rents at all-time highs and vacancy rates at historic lows. Yet affordability remains an issue in the city despite the increase in new units. A projected multifamily pipeline created by HAND staff shows a healthy number of new units coming to market over the next few years, with a good number targeted to those with low incomes; however, even with these new units, there remains a large gap in Salt Lake City's affordable housing market. One of the predominant impediments to the creation of affordable housing is the lack of funding resources available to the for-profit and non-profit housing development communities. The primary sources for funding construction of new or rehabilitation of existing housing consist of 4% and 9% Low Income Housing Tax Credits and other gap funding sources that include the State's Olene Walker Housing Trust Fund and the City's Housing Trust Fund. Other federal sources include HUD financing tools such as a 221(d)4, Section 8 vouchers, and federal grants such as HOME and Community Development Block Grants. While tax credits are a useful tool they are very competitive and may require the developer to take on more expensive debt thus requiring SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 1 higher rents. Funding from federal grants, such as THE PROCESS CDBG and HOME, has been reduced over the past ten years and also as stringent restrictions. The group met over a two month period for a total of six meetings during which time they identified a Understanding the difficulties of funding affordable number of tools and then developed financial pro housing, HAND created a Finance Working Group formas on specific case studies using those tools. comprised of for-profit and non-profit developers, The agenda was as follows: CRA lending institutions, representatives from Utah Housing Corporation and the National Development Meeting 1 — Discussed meeting schedule, goals, and Council, and Housing Trust Fund Board members expectations who met over a two month period with the objective to identify possible financing tools and policy Meeting 2 — Created and discussed list of possible recommendations. These include potential funding financing and policy tools sources on city, county, and statewide levels and changes to current city ordinances and policies to Meeting 3 — Reviewed Case Study 1: Sugar House incentivize and help finance the large gap in development affordable housing. Meeting 4 — Presentation from UTA regarding The group understands that to see an increase in Transit Oriented Development; reviewed Case Study affordable housing in the city, that new funding 2: High Opportunity Area; reviewed Case Study 3: sources must be created in conjunction with Small Scale Acquisition changes to City policies and ordinances. Meeting 5 — Presentation and discussion of WORKING GROUP MEMBERS recommended solutions Steven Akerlow - Morgan Stanley Meeting 6 — Joint meeting between Finance Working Joni Clark - Salt Lake CAP Group and Non-Profit Housing Strategy Group to Irena Edwards - Key Bank and Housing Trust Fund gather input on solutions and gained consensus on Board member recommendations Ryan Hackett - Utah Non-Profit Housing Corp Michael Lohr - Goldman Sachs The Housing Finance Working group recommends Jeff Nielsen - Wasatch Development Group that the Housing Trust Fund Board, Mayor Biskupski Claudia O'Grady - Utah Housing Corporation and the Salt Lake City Council endeavor to explore Ali Oliver - UTA and Housing Trust Fund Board the following recommendations as possible member solutions for the affordable housing shortage in Salt Chris Parker - Giv Group Lake City. Affordable housing requires a long-term Amy Rowland - National Development Council strategy with some short-term solutions that make Marion Willey - Utah Non-Profit Housing Corp building, acquiring, and preserving units actionable and sustainable. The group presents these Salt Lake City Staff included: Mike Akerlow, Melissa recommendations with the understanding that Jensen, Sean Murphy, Todd Reeder, Tammy public input, feasibility, and detailed analysis of Hunsaker, Marina Scott impact is further required. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 2 r,, V ..w IA 2 • GLOSSARY AFFORDABLE HOUSING DEFINITIONS AFFORDABILITY RENT FORMULA: The industry standard for calculating affordable rents according The following list of terms is by no means inclusive to area median income. The formula uses the but serves as a reference for informed discussion. published income limit tables from HUD with a The term "affordable housing" truly means housing combination of FMR. For example, a family of 3 at that is affordable for anyone. Categories within 50% AMI is making roughly $33,250 annually and affordable housing include moderate income, low can afford a 2 bedroom apartment at about $800/ income and extremely low income. To foster clear month minus utilities. The formula is technical and communication, HAND staff has compiled the also accounts for slight variances but ensures that following list of often used terms and definitions projects have consistent rent rates that and where possible, the source of those definitions. accommodate a variety of incomes. AFFORDABLE MARKETS: This refers to AFFORDABLE HOUSING: A home is generally communities that are driven by market forces that considered affordable if the household pays 30% or also align with HUD's definitions of "affordable less of their gross income (before taxes are taken rent". These markets can change at any time and out) towards rent/mortgage payments. The term have no obligation to remain affordable. usually refers to homes affordable to people with AREA MEDIAN INCOME (AMI): The median income low, very low and extremely low income, including of each Metropolitan Statistical Area (MSA) and low-wage working families, seniors on fixed incomes, each county based on all wage-earners in the area. veterans, people with disabilities and the homeless. The U.S. Department of Housing and Urban There are different kinds of affordable homes, Development (HUD) issues a listing of AMIs each including public housing (owned by the local year. AMI is used to determine the eligibility of housing authority), Section 8 vouchers that help applicants for both federally and locally funded people rent privately owned homes, and privately affordable housing programs and depends on family owned housing developments with restricted rents. size. HUD Definitions of Affordable Housing: http://nonprofithousing.org/wp-content/uploads/ Low Income: Income does not exceed 80% of Area Media-Packet-Affordable-Housing-Glossary.pdf Median Income (AMI) AREAS OF OPPORTUNITY: Areas of opportunity Moderate Income: Income does not exceed 60% of have been best described this way "places that AMI effectively connect people to jobs, quality public Very Low Income: Income does not exceed 50% of schools and other amenities" (HUD Secretary Shaun AMI Donovan). HUD frequently refers to these as Extremely Low Income: Income does not exceed "geographies" of opportunity and has created an 30% of AMI opportunity index in order to quantify such http://nonprofithousing.org/wp-content/uploads/ opportunity throughout the US. The most notable Media-Packet-Affordable-Housing-Glossary.pdf work has been done by Jim Woods in 2004. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 3 FAIR HOUSING: Title VIII of the Civil Rights Act of HOUSING CHOICE VOUCHER / SECTION 8 1968 (Fair Housing Act) prohibits discrimination in PROGRAM: Federal rent-subsidy program under the sale, rental and financing of dwellings based on Section 8 of the U.S. Housing Act, which issues rent race, color, religion, sex or national origin. In Utah, vouchers to eligible households. The voucher state law also includes source of income as a payment subsidizes the difference between the recognized protected class. gross rent and the tenant's contribution of 30% of http://portal.hud.gov/hudportal/HUD?src=/ adjusted income, (or 10% of gross income, program offices/fair housing_equalopp/progdesc/ whichever is greater). There are two main types of title8 voucher programs: Tenant Based: The subsidy remains with the tenant FAIR MARKET RENT (FMR): Rental rates set by the and allows them to move to a unit that best suits U.S. Department of Housing and Urban their needs. Development (HUD), that represents the estimated Project Based: The subsidy remains with the unit monthly rent for a modest apartment. FMRs and the property qualifies tenants according to the determine the eligibility of rental housing units for parameters of the program. the Section 8 program and serve as the payment http://nonprofithousing.org/wp-content/uploads/ standard used to calculate subsidies under the Media-Packet-Affordable-Housing-Glossary.pdf Rental Voucher program. http://nonprofithousing.org/wp-content/uploads/ HOUSING FINANCE AGENCY (HFA): Each State has Media-Packet-Affordable-Housing-Glossary.pdf a Housing Finance Agency in Utah it is Utah Housing Corporation (UHC). UHC manages Utah's low HOUSING ASSISTANCE PAYMENT (HAP): Section 8 income housing tax credit program and allocation Housing Assistance Payment Contracts ("HAP process, distributing over $6.7MM in 2016. HFAs Contracts")provide that the resident pays a portion are State-chartered, were established to help meet of the Contract rent (the resident's portion is the affordable housing needs of State residents, limited to a percentage of the resident's income), have statewide authority to finance affordable with the remainder of the Contract Rent bein paid housing, and typically are governed by a board of under the HAP contract as a Housing Assitance directors appointed by the Governor. Payment. For example, if the Cotnract Rent is $600 https://www. hudexchange. info/resources/ and the resident's protion is $200, the HAP portion documents/Glossary-of-Multifamily-Affordable- would be $400. Housing-Preservation-Terms.pdf https://www.hudexchange. info/resources/ documents/Glossary-of-Multifamily-Affordable- INFILL DEVELOPMENT: A strategy for Housing-Preservation-Terms.pdf accommodating growth and preventing sprawl through greater density and efficiency in land use HOUSING COST BURDEN: When 30% or more of a development within existing urban boundaries. household's income is spent on housing costs. Many http://nonprofithousing.org/wp-content/uploads/ households are severely over-burdened and pay Media-Packet-Affordable-Housing-Glossary.pdf more than 50% of their income towards housing (see Severe Cost Burden). http://nonprofithousing.org/wp-content/uploads/ Media-Packet-Affordable-Housing-Glossary.pdf SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 4 LOW INCOME HOUSING TAX CREDIT PROGRAM disabilities. Public housing comes in all sizes and (LIHTC): The LIHTC program was created in the Tax types, from scattered single family houses to high Reform Act of 1986, and it includes both rise apartments for elderly families. There are competitively allocated "9 percent" tax credits and approximately 1.2 million households living in non-competitive "4 percent" tax credits. Developer- public housing units, managed by some 3,300 HAs. owners of LIHTC properties can claim credits http://portal.hud.gov/hudportal/HUD?src=/ against their federal income tax liability, for up to program offices/public indianhousing/programs/ ten years after the property is completed and leased up, provided that the property remains in compliance with LIHTC requirements. Typically, a PUBLIC HOUSING AUTHORITIES Local government LIHTC property is owned by a limited partnership or agencies that are authorized to manage housing for limited liability company in which the real estate very low- and extremely low-income households, developer is the general partner or managing either as public housing, through Section 8 member and in which corporate investors hold the vouchers, or with other types of affordable housing. remaining ownership interests. In Utah, many of the Generally, households pay no more than 30% of industrial banks are the primary investors in these their income for rent and the remainder is partnerships providing a unique market for subsidized by the Federal government through HUD. purchase of these credits. http://nonprofithousing.org/wp-content/uploads/ https://www.hudexchange. info/resources/ Media-Packet-Affordable-Housing-Glossary.pdf documents/Glossary-of-Multifamily-Affordable- Housing-Preservation-Terms.pdf QUALIFYING CENSUS TRACTS: A Qualified Census Tract (QCT) is any census tract (or equivalent MARKET RATE HOUSING: Rental housing that is geographic area defined by the Census Bureau) in privately owned but charges rents consistent with which at least 50% of households have an income the property amenities as well as local housing less than 60% of the Area Median Gross Income market prices and conditions. Typically, these (AMGI). HUD has defined 60% of AMGI as 120% of property owners do not receive direct subsidies. HUD's Very Low Income Limits (VLILs), which are Conventional market-rate properties may offer rental based on 50% of area median family income, housing that is also considered "affordable". adjusted for high cost and low income areas. https://www.fanniemae.com/content/fact sheet/ wpworkhouse.pdf RACIALLY/ETHNICALLY CONCENTRATED AREAS OF POVERTY: A census tract where the number of MIXED-USE DEVELOPMENT: A building or group of families in poverty is equal to or greater than 40 buildings that combines multiple revenue producing percent of all families, or an overall family poverty uses in an integrated and coherent plan. As an rate equal to or greater than three times the example, a mixed-use development might include metropolitan poverty rate, and a non-white retail space on the ground floor, offices on the population, measured at greater than 50 percent of middle floor, condominiums on the top floors and a the population. garage on the lower level. http://nonprofithousing.org/wp-content/uploads/ SEVERE HOUSING COST BURDEN: When 50% or Media-Packet-Affordable-Housing-Glossary.pdf more of a household's income is spent on housing costs. PUBLIC HOUSING: Public housing was established http://nonprofithousing.org/wp-content/uploads/ to provide decent and safe rental housing for eligible Media-Packet-Affordable-Housing-Glossary.pdf low-income families, the elderly, and persons with SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 5 ft - FINDINGS . , OVERVIEW 9% TAX CREDITS During the group's discussions, several key findings The working group recognizes that the 9% tax emerged as issues facing developers and those credits are the single most important tool for financing affordable housing. While there are many providing financing for affordable housing. issues, the following are five key findings from the Because of the amount of equity created as a group that helped inform the recommendations. result of the 9% credits, many projects using this SUBSIDY AMOUNTS tool are able to provide units to those with extremely and very low incomes. However, the The working group dedicated significant time to process to get these tax credits is extremely determining what kind of subsidy would be needed competitive and occurs only once each year. Many for the development of affordable housing units. times developers will have to wait 2 to 3 years Scenarios from throughout the city were presented before they may get the credits which can to the group for their consideration of varying sizes, increase costs. a range of AMI's, and uses. Land location continues to be the key determining factor in the subsidy 4% TAX CREDITS needed. The working group concluded that the gap ranged from $12,000 - $50,000 per unit when used The 4% tax credits do not provide as much equity in conjunction with 4% credits and $67,000 - as the 9% tax credits and therefore require other $360,000 per unit without any other subsidy. funding sources. To be eligible for the tax credits, Concluding that in order to increase the affordable a developer must also get a Private Activity Bond housing stock a significant financial commitment which is more than 50% of the cost of the would need to be made. project. These bonds are expensive to finance and thus drive up the costs of the project resulting in WORKING WITH THE CITY higher rental rates. As a result, 4% tax credit projects often are targeted to those at 60% of The development professionals in the working group area median income. The Private Activity Bonds felt that the City could be a better and more are allocated by the State and have an annual cap collaborative partner in affordable housing which over the past couple of years has been development. They are unsure of what's available to expended by the spring. However, these credits them as far as incentives, fee waivers, expedited may change and become less desirable if interest processes, etc. If the City wants more affordable rates increase. housing developers building new units, the working group felt that the City needs to create a more streamlined and productive environment. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 6 SMALL ACQUISITION AND DEVELOPMENT The working group believes that a critical component missing is affordable housing in smaller developments. These may include townhomes, cottages, small apartment buildings, etc. However, land and development costs are typically higher which results in a higher sales or rental rate. The group stated that these types of units are an effective tool for addressing affordability but the financing is not available for medium density projects. SALT LAKE CITY HOUSING TRUST FUND The City's Housing Trust Fund is recognized as a valuable and necessary tool to maximize the tax credits and to leverage other available funding sources. The working group discussed the need for the fund to be sustainable with a constant funding source in addition to more flexibility to do projects that might not fit the status quo. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 7 fr // if _ t. e RECOMMENDATIONS • OVERVIEW The Finance Working Group began their work by creating a list of over 20 financing tools and policy changes that may result in additional funding or incentives for developers to build affordable housing in Salt Lake City. They categorized their recommendations into three groups: policy, incentives, and funding resources. The working group notes that concessions may need to be made within each recommendation and continued conversation is needed on how each solution could be modified for the greatest good. This includes dialogue on not only solutions but the ability to monitor and administer those solutions. The group also noted that further clarity of the definition of affordable housing is needed in order to ensure consistency on the parameters in which each solution is discussed. In addition, the group generally felt the Housing Trust Fund Board should be the main body that manages and recommends subsidies either in the form a loan or a grant to the Mayor and City Council. Each recommendation also had various discussions on ease, convenience and timeliness as key factors to offering any incentive or subsidy to developers. Lastly, it is noted that each solution should be explored in the context of leveraging legislative dollars, county collaboration and feedback to the State's affordable housing group. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 8 f At PPP 5 POLICY RECOMMENDATIONS , • .a . INCLUSIONARY ZONING could range from $60,000 - $250,000 per unit should a developer decide not to include any Inclusionary Zoning policies are common around the affordable units. Pricing would vary depending on country and ensure that as cities change and the location of the units and the need for develop, affordability is included in the early stages affordability in the desired area. Distinct policy of development. An inclusionary zoning ordinance elements would have to be designed for multi-family requires that any new residential construction has a developments and single-family developments. certain percentage of affordable units included. Variations could be added to this policy including Some cities will also allow developers to make "in targeting geographic areas where there is a lack of lieu" payments should they decide not to include affordable housing, incentive zoning and upzoning affordable units. Inclusionary zoning throughout the waive certain parameters in order to allow for more country has typically been targeted at those between density at which time the developer would include 40%420% AMI. These policies also have the ability an affordable component. to limit concentrated areas of affordability and poverty. While other policies around zoning could be In addition, the group recognizes the need and explored to include density and other incentives the expense to ensure that the inclusionary zoning group focused on inclusionary zoning due to its requirements are being met. Such compliance would success throughout the nation. include auditing rent rolls and incomes, inspecting units, and enforcing when necessary. Salt Lake City continues to be a high performing market that attracts businesses, residents, and CASE STUDIES developers. In the opinion of the group inclusionary zoning would not be an outright deterrent for Seattle, Washington development however, considerations for compliance San Francisco, California and design of the policy would be critical in the Washington D.C. long-term impact of the policy. IMPACT RECOMMENDATION A citywide ordinance would ensure that affordability A citywide inclusionary zoning policy should be is being included in all housing projects or providing considered as a long-term strategy for ongoing a revenue to subsidize future housing. The impact of affordability. This zoning would require that 5%-10% this policy would most likely be seen through infill of new construction of over 50 units be affordable to development and development on the west side people with low to moderate incomes. The group where the majority of land is still available. was amenable to the option of "in lieu" fees which SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 9 THE MISSING MIDDLE Over the past 5 years, Salt Lake City has seen a types such as these are ideal for the city's shifting multi-family renaissance with thousands of units demographics including those who are aging in built, under construction, or in the permitting place, students graduating from college, young process. While new single family construction, families who want to remain in the city, and those especially in subdivisions, has been somewhat who are living on a working wage. limited due to a scarcity of undeveloped land, there is still a strong market particularly where homes are RECOMMENDATION torn down and rebuilt or go through extensive remodeling. While much of the new construction in Creating missing middle housing in the city will the city has been at market rate, there has been a require changes to current zoning ordinances. Any slight increase in affordable multi-family and single solution or proposal will need to be coordinated family homes. through the Planning Division. The "Missing Middle" refers to an absence of multi- To create more affordable housing opportunities, the unit, clustered housing or other medium density working group recommends that the City Council housing types compatible in scale with single family seriously consider Accessory Dwelling Units as a homes that help meet the demand for not only tool to providing affordable housing units urban living, but for affordability as well. Examples throughout the city. ADU's provide affordable of these unit types include townhomes, duplexes, housing to family members, aging adults, young accessory dwelling units such as carriage homes or families, single parents with children, those with mother-in-law apartments, and small scale disabilities. apartment buildings or bungalow courts. The group also recommends that the City Council Current zoning in Salt Lake City tends to favor either address the efficacy of density bonuses. In some single family or high density multi family with cities, density bonuses are used as an incentive for limited opportunities for missing middle type affordable housing, yet most developers in Salt Lake housing. The Residential Multi Family zone (RMF) City do not take advantage of them because of the allows some of this type of housing to be built increased cost of other building systems. however the density requirements in that zone are such that large land parcels would be necessary for development. As a result of the larger parcels and therefore higher price, it becomes difficult to build medium density housing at an affordable price. The Planning Division recognizes that there are barriers in building this type of housing in the current ordinance. Accessory dwelling units, townhomes, and small scale apartment buildings are sensitive to the look and feel of single family neighborhoods and can be sold or rented to those with fixed incomes. Housing SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 10 f my 4.1 INCENTIVES INCENTIVES RECOMMENDATION Incentives are items that would increase some Land Banking and participating in Community Land affordability but may not have a direct monetary Trust are some of the most powerful tools for long- correlation. In addition, the working group believes term preservation of affordable housing. The group these are some of the more immediate actions that agreed that any revenue targeted for affordable might be able to be taken. housing should be partially used for land acquisition and preservation in either of these entities. Further, COMMUNITY LAND TRUST the land within the trust should be developed by a wide variety of public and private entities according A Community Land Trust is an entity that develops to what each community needs. Both a Community and stewards affordable housing, community Land Trust and a model of land banking bring gardens, civic buildings, commercial spaces and extreme value and it is recommended that the other community assets on behalf of a community. administration prioritize the analysis of these They are public or community-owned entities unique models. generally created to acquire, manage, maintain, and repurpose vacant, abandoned, and foreclosed CASE STUDIES properties. In addition, they can be used in an opportunistic fashion to purchase land at an Champlain, Vermont affordable price in an attempt to preserve it. While a Albuquerque, New Mexico public entity may manage the Trust, a nonprofit Durham, North Carolina structure allows public entities like a city to contribute but also provides an opportunity for tax- IMPACT deductible donations to be made in the form of property. Geography 2014 2015 West Side Single Family $215,000 $234,750 East Side Single Family $305,000 $319,250 An alternative to a trust is the strategic effort of West Side Multi-Family $171,250 $185,250 land banking for affordable housing purposes. This East Side Multi-Family $178,750 $193,500 would include a committed plan for buying and East Side Median Land Cost $98,750 $125,000 West Side Median Land Cost $80,000 $79,500 preserving land and buildings that are currently hard Salt Lake County Median Sales Price to access or it is anticipated as communities gentrify that the property will be hard to access. An annual investment of $1,000,000 would produce This method also ensures affordability by roughly 5 pieces of land and while that may appear maintaining ownership but offering long-term leases. minimal, this would be preserved in perpetuity ensuring long-term affordability. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 11 TAX ABATEMENT INCREASED CITY ACCESS Abatement is a reduction in the level of taxation The ease in which developers are able to do faced by an individual or company. Examples of business with Salt Lake City was a key area abatement include tax decrease, a reduction in identified to help incentivize affordability. The group penalties or a rebate. If an individual or business discussed many variations of how this might work overpays its taxes or receives a tax bill that is too and the value it would bring to each project. The high, it can request abatement from the taxing intention of this recommendation is to expedite authorities. This incentive would allow affordable current affordable projects and increase mixed housing developers the ability to increase their income development. financial capacity for debt service and therefore add some affordability in the overall project. RECOMMENDATION RECOMMENDATION The City should create a decision making body represented by each department that reviews Salt Lake City should consider sponsoring a project transactions jointly, commits to a response statewide tax abatement program in collaboration time and has the ability to waive fees (in accordance with the State and Salt Lake County. The tax with policies). This group could only be accessed by abatement should be in proportion to the level of developers who commit to a percentage of units at affordability in any given housing project. Meaning a specific level of affordability. Authority is a key that if the percent of affordability is 50% the tax component of this policy and the group would need relief should correlate at 50% and should be to be able to act quickly to waive fees and expedite validated annually. The group agreed that this long- affordable housing developments through the term strategy would significantly incentivize permitting process. For example: affordability on an ongoing basis. • Impact Fees • Density CASE STUDIES • Parking Requirements • Design Changes Washington, D.C. New York City, New York In addition it is recommended that a housing Portland, Oregon ombudsman be the point person to facilitate and communicate with the group and the developers. IMPACT IMPACT A tax abatement of roughly $40,000 per year would leverage an additional $600,000 in available debt Based on a recent affordable housing development increasing the developers ability to add affordable in Salt Lake City: units. Cost Ty pe Amount Impact Fees (total for all units) $899,816 Permit Fees $102,771 Parking Meter Fee $51,744 Waiting Period (5 Months) Interest & Revenue $100,000 Waiting Period (5 Months) Tax Credit $160,000 Adjustment Total $1,314,331 SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 12 fr FUNDING RESOURCES FUNDING RESOURCES EQUITY INVESTING A committed revenue source is an integral part of Currently Salt Lake City issues a Request for funding the subsidies needed for affordable housing. Proposals for a development, negotiates a purchase While incentives create lasting partnerships and price and then sells the property to the developer. support for affordability they are not sufficient to Equity investing would allow the City to contribute house those at 40% AMI and below long term. These equity through a land or cash donation in exchange may be the most challenging yet critical for a return on its investment. The group recommendations to consider. contemplated several forms of equity and joint venture scenarios with diverse return expectations. This form of contribution is seen as a way to create sustainable funding over a long term period but requires a much higher risk tolerance than generally seen from public entities. RECOMMENDATION The City should explore a limited partnership agreement structure in which they offer a percentage of equity for a higher return. This would require a comfort in investing in projects with a limited amount of affordability in order to produce revenue that could be reinvested as a subsidy for existing or future projects. IMPACT The standard for general investors is a 10% return, however, since the City's main interest is sustainability the target would range from 4-5% returns which would be fully reinvested in subsidy, loans, or land acquisition for future affordable housing development. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 13 CITY-ISSUED BOND OR LEVY affordable housing and mixed use/income developments. Notably, fees can also be a polarizing A general obligation bond, revenue bond, other issue for communities drawing out opposition to types of bonds or levy would supply an initial affordable housing and whose role it is to pay for it. investment in affordable housing. This type of This is seen as an approach that should be viewed revenue would help address the current gap that through a long-term lens with the most-long term exists by providing immediate subsidy to impact. developers, however, without a plan to issue a bond every 5-7 years it doesn't provide much REAL ESTATE DOCUMENT FEES sustainability. Document Fees (Transaction Fees) are a mechanism RECOMMENDATION designed to produce revenue from specific transactions at the City/State level. Such revenues A bond issuance should be explored in order to are then a dedicated source of funding for a specific address the current gap. It is recommended that the public purpose. While variations are wide the group administration and Council explore the feasibility of specifically explored a document/real estate being a bond issuer. Further, if there is a model that recording fee which is the most common fee used allows the bond dollars to be revolving through the across the country for this purpose. This would loan fund that would be a very effective tool for produce significant revenue and provide a consistent leveraging such dollars. As a supplemental source of funding for affordable housing. recommendation the group favors a legislative appeal to increase the amount the Private Activity RECOMMENDATION Board issues toward multifamily housing as a way to leverage additional 4% tax credits. While a document fee would provide significant revenue the group preferred options that remained CASE STUDIES in the jurisdiction of the city. They felt that any fee would be valued so long as the city had the Charlotte, North Carolina: $15MM every 2 years for authority to charge it and that it was in some way 8 year cycle related to the real estate/housing markets. However, Austin, Texas: $55MM one time bond should the possibility arise to impose a fee that Miami, Florida: $3B over 40 years ($195MM for could benefit both the county and the city it would affordable housing) be favored within the working group. California: $3B over 30 years Seattle, Washington: $140MM levy voter approved CASE STUDIES every 7 years Philadelphia, Pennsylvania: $12MM annual revenue IMPACT Washington State: $27MM Oregon State: $12MM Bond Amount Per Unit Cost Units $15,000,000 $50K - $100K 225 — 300 Units IMPACT $25, 000,000 $15K - $25K 1,000 — 1,667 At a $25 fee for each home sold in Salt Lake County, CITY AND/OR COUNTY FEES revenues and potential units would be as follows: 2014: 14,767 homes sold Fees arose in the group as the most consistent, fair, $369,175 in revenue and long term solution to begin to fill the gaps on $50K-$100K per unit cost 5 affordable units SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 14 LINKAGE FEE AND/OR IMPACT FEES PEER-TO-PEER RENTAL FEES Commercial linkage fees are a form of impact fee Peer-to-peer fees are increasingly common in urban, assessed on new commercial developments or tourist, driven cities. This approach could supply major employers based on the need for workforce revenue that would see an increase over the next 10 housing generated by new and expanding years, however, there is consideration for businesses. An impact fee would be imposed on compliance in a gig economy like peer-to-peer rental property developers by municipalities for the new such as Airbnb. Hotel fees would be easier to infrastructure that must be built or increased due to administer but could garner larger opposition. new property development. These fees are designed to offset the impact of additional development and RECOMMENDATION residents on the municipality's infrastructure and services, which include the city's water and sewer The city should explore how an occupancy fee could network, police and fire protection services, schools be charged in the peer-to-peer market. Currently, the and libraries. These fees can also be levied against compliance and implementation of enforcing fees is any individual or entity where its actions create an new and best practices are still being formed. In externality within a municipality. These fees are one addition, this is an opportunity to be innovative in of the more consistent mechanisms to fund our approach and curve the impact this market is affordable housing seen throughout the country. having in urban areas throughout the county. In Salt Lake City there is no zone clarity for this type of RECOMMENDATION rental and Housing & Zoning Enforcement is currently shutting down these enterprises in The working group recommends that either a residential zones. It is recommended that a permit linkage fee or impact fee be explored. With fee and occupancy fee are explored to determine the anticipated growth of the Salt Lake City market over best benefit to the community. the next decade these fees would play a critical role in supporting affordable housing. Lastly, it is IMPACT recommended that the City conduct the necessary diligence of a nexus study as quickly as possible in It is estimated that Airbnb has approximately 150 order to validate how much revenue would be units available online in Salt Lake City. If a permit produced and assess the actual link of development fee of $350 were charged that would generate on affordable housing. The group also notes that $52,500 in revenue. If an occupancy fee of $5 per exceptions can and should be made for industry person were charged (average stay of three people specific businesses that the city is trying to attract. with 200 stays per year at each location) it would generate $450,000 in revenue. CASE STUDIES Somerville, Massachusetts: $500,000 Boston, Massachusetts: $7MM SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 15 111 8 STAFF RECOMMENDATIONS rni OVERVIEW COMMUNITY LAND TRUST To ensure preservation of existing affordable housing and to secure The working group understands that the preceding property in high opportunity areas HAND staff recommendations are effective tools but they may recommends that the City work with a non-profit to require more due diligence, public outreach, and create a community land trust. support and/or action from legislative bodies including the City Council, the County, and the State. HAND staff has evaluated the proposals and recommends the following: ZONING HAND staff recommends that the Mayor and City Council approve ADU's throughout the city; create a density program that would be an incentive INCLUSIONARY ZONING A form of inclusionary to developers; and examine the RMF density zoning may work in Salt Lake City in certain requirements so that medium density products geographically targeted areas. These areas could could be built on smaller parcels in neighborhoods. include transit corridors and east side locations. HAND staff recommends that the Mayor and the Council evaluate best practices and determine how inclusionary zoning could work in Salt Lake IMPACT FEE/LINKAGE FEE As an ongoing funding City to produce more affordable housing. source to the Housing Trust Fund, HAND staff recommends that the City impose an affordable PEER-TO-PEER HAND staff recommends that the housing impact fee or linkage fee. Mayor and Council consider peer-to-peer occupancy and permit fees as a source of revenue. While this may be new to many cities and possibly difficult to INCREASED CITY ACCESS The creation of a team enforce, it could be a strong generator of revenue for within the City that could make quick decisions and affordable housing. an ombudsman who could help navigate city processes would reduce costs for affordable housing HOUSING BOND OR LEVY To generate a funding developers. Reduced costs translate into more source large enough to address the affordable housing units. The ability for this team to waive fees housing needs in the city, HAND staff recommends and make quick decisions is crucial to its success. that the Mayor and Council approve a housing bond or levy that is voter approved and repeated every predetermined number of years. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 16 ADDENDUM CASE STUDIES FOR THE WORKING GROUP COMPREHENSIVE LIST OF TOOLS EVALUATED BY THE WORKING GROUP Affordable Housing Development - Case Study Summaries The Process: Teams were asked to consider three different housing development opportunities. The goal was to model a mixed-income development financing scenario for each case study that didn't use the 9% Low Income Housing Tax Credit (LIHTC), but still included some units affordable to households with incomes below 40%of the Area Median Income. The projects could include market rate units as well. Teams were allowed to consider a reduction of the land cost and use of other available affordable housing subsidies to make the proposed projects feasible. The proposals are summarized below, in a format which illustrates the subsidy amount needed per affordable unit. CASE STUDY 1: Sugarhouse Land - Old Deseret Industries Property This 1.4 acre site at 2234 S Highland Dr. is city-owned and is in a High Opportunity(low poverty) neighborhood. It is zoned CSHBD-1 (Sugarhouse Business District), with a potential building height of 105 feet, and is valued at$3MM. The site is not in an area that qualifies for the tax credit basis boost. With 4%Credits Conventional (no LIHTC) Proposal Specifics Notes Notes #Units Proposed 110 60 Development Cost Per Unit $142,844 $1MM land cost $140,740 $0 land cost #of Units@60%ami 77 70% 0 #of Units @ 40%ami 33 30% 12 20%affordable 100%affordable Sources per Unit Bank Debt Supported $53,499 $88,733 Equity $50,023 1.18pricing $29,901 10% IRR Developer Loan $4,545 $0 Public Debt $18,182 $2MM OW+City $22,106 $1MM City Remaining Gap/unit $16,594 $0 Total Subsidy $5,825,386 w/full land cost $4,326,350 w/full land cost Subsidy Required per Affd. Unit $52,958 $360,529 Findings: The 4% LIHTC provided additional equity, but the project still needed significant subsidy to be feasible; over$5.8MM for a 110 unit project, with all units meeting the tax credit rent requirements. This is primarily because the location does not provide the 30% boost in credit basis that makes downtown 4%tax credit projects more feasible. With 20%of the units affordable,the conventionally-financed project required an extremely high subsidy per affordable unit of$360K. The model assumes that a conventional equity investor would need to receive the same rate of return a 100% market rate project would provide in order to allow the developer to commit the affordable units. The project would require 100%of the land cost to be contributed, as well as requiring an additional $1MM in soft subordinate financing. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 17 CASE STUDY 2: Vacant Land at 454 E South Temple This site is privately-owned land in a Historic Landmark District and High Opportunity Area. The site is 1.14 acres, and was listed for$3.7MM. The zoning is R-MU. Site is located in a LIHTC Basis Boost Area. The teams were asked to do essentially the same exercise as in Case Study#1; provide as many units affordable to households at or below 40%ami as possible, either using 4% credits or within a market rate development. With 4%Credits+ Boost Conventional (no LIHTC) Proposal Specifics Notes Notes #Units Proposed 110 70 Development Cost Per Unit $174,760 $3.5MM Land $171,844 $2.7MM Land #of Units @ 60%ami 77 70% 0 #of Units @ 40%ami 33 30% 7 10%affordable 100%affordable Sources per Unit Bank Debt Supported $53,207 $129,423 Equity $107,727 1.18pricing $42,421 10% IRR Developer Loan $4,545 Repaid in 15yrs $0 Public Debt $9,281 $1MM OW Modeled Gap/unit $0 $0 Total Subsidy $1,220,900 w/full land cost $800,000 w/full land cost Subsidy Required per Affd. Unit $11,099 $114,286 Findings: With the same unit mix as the previous case study,the 4% LIHTC model yielded a much more feasible project, requiring only an $11K per unit subsidy. The difference was almost entirely due to the additional equity available with the tax credit basis boost which the location provides. This example illustrates the value of a basis boost eligible sites in creating affordable units with minimal additional subsidy. Once again,the conventionally-financed project was much less feasible, with a required subsidy of $114K per affordable unit; and only 10%of the units restricted at a 40%ami affordable rent level. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 18 CASE STUDY 3: Acquire Existing Downtown Apartment Building Subject is a 20 unit, 1925 vintage multi-family building located at 254 S 300 E. The building sits on .20 acres and includes 16 parking spaces. The building is privately-owned and is being marketed for a purchase price of$2,935,000. It was substantially renovated in 1998, and has had other major capital improvements in the last few years. The teams were instructed to investigate the feasibility of providing some portion of the units at affordable rent levels without using tax credits. Conventional (no LIHTC) Conventional (no LIHTC) Proposal Specifics half@ 40%ami Notes all © 60% ami Notes #Units Proposed 20 20 Development Cost Per Unit $152,625 $60K in rehab $173,775 $500K in rehab #of Units @ 60%ami 0 20 100%affordable #of Units @ 40%ami 10 50%affordable 0 Sources per Unit Bank Debt Supported $67,226 $78,750 Equity $17,941 10% IRR $21,000 10% IRR Developer Loan $0 $0 Public Debt $50,000 $1MM City $50,000 $1MM City Modeled Gap/unit $17,459 $24,025 Total Subsidy $1,349,171 $1,480,500 Subsidy Required per Affd. Unit $67,459 $74,025 Findings: Though the existing rents in the building are very close to 60%ami rents already(avg. $853/unit),the teams found that the operating expenses provided by the seller were unreasonably low, making the building essentially overpriced. Using a market level of operating expenses, and assuming some level of capital improvements were likely to be necessary (this amount varied between teams),the result was a necessary subsidy of around $70K per unit, depending on the depth and percentage of affordability being modeled. SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 19 COMPREHENSIVE LIST OF TOOLS EVALUATED BY WORKING GROUP Tool Name Description Tool Parameters Type This would be designed to address the current gap in the community General Obligation Bond Funding to support the preservation,assistance,and new development of affordable housing (8,200 units) One time funding This would be designed to address the current gap in the community Private Activity Bond Funding to support the preservation,assistance,and new development of affordable housing (8,200 units) One time funding Tax Allocation Would provide subsidy from General Fund to affordable housing developers Roughly$39K annually for 15 years Incentive Policy can vary and the requirement may be substituted with"in lieu" Inclusionary Zoning Ordinance that requires a given share of new construction to be affordable fees Policy Develop and steward affordable housing and other neighborhood spaces on behalf of a Community Land Trust community Generally held by a nonprofit group but contributed to by the city Preservation Offering a letter of credit for a certain percent of an affordable housing transaction so that the Letter of Credit developer can access higher LTV and lower cash flow transactions Varied Incentive Using the Housing Trust Fund allocation to leverage private dollars.The money would act as a first loss position but actual dollars loaned would come from a financial institution pool.City Varied but the loan parameters are likely to be less flexible then Loan Loss Reserve would be the first in and then subordinate its own position. current structure Incentive Zoning tool that that permits developers to build more housing units,taller buildings,or more Density Bonus floor space than normally allowed,in exchange for provision of a defined public benefit Varied Incentive A cross functional team(similar to RDT)that meets to review applications and apply waivers. Decisions would be based upon certain parameters but also leave SLC Deal Team Important that the group have decision making authority some discretion to the team Incentive Energy Efficiency Waiver Having a standard that is more cost effective such as Enterprise Green Certification Varied Incentive Car Charging Requirements Flexibility on requirement based on the merits of the project Varied Incentive Impact Fee Waiver Additional fee waiver on properties that have some affordable housing but is not 100% Varied Incentive Reduce Parking Restrictions Reduce ratio of parking needed and encourage finance institutions to support that ratio Instead of 1:1 it would be 1:2 Incentive Flexible design standards on hard to develop properties(like historic or environmental land Design Leniency for"Hard to Develop" issues) Varied Incentive Currently HTF ordinance has a 55 year term.A fee could be instituted The term in which a property needs to remain affordable to access certain benefits such as tax in cases in which the developer changes the affordable units to market Affordability Term in Housing Trust Fund Ordinance credits or Housing Trust Fund dollars rate Preservation Can vary but include whether or not it is a primary residence or Peer to Peer Short Term Rental Services(Airbnb) Additional Tax on overnights stays in single family homes. additional property etc... Revenue Generation Deed&Mortgage Document Recording Fees Fees collected when deed and mortgage documents are being recorded Generally all transactions and fees can range from$50-$130) Revenue Generation .50%&1%Can be limited or equally instituted(i.e.no fee for family Real Estate Transfer Fee Charge on real estate based on the sale price of the property being transferred transfers) Revenue Generation Commercial linkage fees are a form of impact fee assessed on new commercial developments or major employers based on the need for workforce housing generated by new and Generally determined by studies that can equate impact on Impact/Linkage Fee expanding businesses community to a dollar amount. Revenue Generation SALT LAKE CITY AFFORDABLE HOUSING FINANCE RECOMMENDATIONS I 20