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HomeMy WebLinkAboutCouncil Provided Information - 4/14/2026SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY OF SALT LAKE CITY 451 SOUTH STATE STREET, ROOM 304 P.O. BOX 145476, SALT LAKE CITY, UTAH 84114-5476 SLC.GOV/COUNCIL TEL 801-535-7600 FAX 801-535-7651 BOARD STAFF REPORT SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY TO:CRA Board Members FROM Allison Rowland Senior Budget & Policy Analyst DATE:April 14, 2026 RE: RESOLUTION: PROPOSED HOUSING DEVELOPMENT FUNDING PRIORITIES FOR FISCAL YEAR 2026-27 ISSUE AT-A-GLANCE This briefing is designed as a follow-up discussion of the CRA’s proposed Fiscal Year 2026-27 (FY27) Housing Development Funding Strategy, which the Board considers each year for any potential modifications. In its latest transmittal (March 27, 2026), CRA staff has changed the proposal slightly from the previous one (transmittal dated February 20, 2026), to reflect a suggestion from a Board Member in the March meeting to base the “Expanding Opportunity” priority on the data source cited in Utah Housing Corporation’s Draft Qualified Allocation Plan for 2027, rather than CRA’s previous recommendation to incentivize new affordable housing in areas where deed-restricted affordable housing is not currently available. If the Board agrees to this change, the Fiscal Year 2026-27 (FY27) Housing Development Funding Strategy would essentially adopt the same priorities as in FY26, with only one substantive change, rather than the two proposed in the transmittal from February, as noted further below. Thus, as recommended in the March 27 transmittal, the proposed priorities for FY27 are: FY27 Threshold Priorities Deeply Affordable Housing Family Housing with Amenities for Children Additional FY27 Priorities Wealth Building Opportunities Expanding Opportunity (see #2 below) Neighborhood Services and Commercial Space The February transmittal proposed: 1. In the Housing Development Loan Program, increasing the share of units required in a proposed development for it to qualify as either “Deeply Affordable Housing” or “Affordable Family Housing,” from 10% to 20%, and Schedule: Page | 2 2. Renaming the “Expanding Opportunity” priority to “Expanding Affordable Housing Availability,” shifting the focus from “high opportunity areas,” and instead incentivizing new affordable housing in areas where deed-restricted affordable housing is not currently available. Now, in the March transmittal, CRA staff proposes to maintain the Expanding Opportunity priority as-is, and change only the source of data, from the CRA’s High Opportunity Area map to the Utah Healthy Places index/map. This reflects a suggestion from a Board Member in the March meeting to use the same data source as the Utah Housing Corporation’s Draft Qualified Allocation Plan for 2027. Next Steps. CRA staff will present their specific funding allocations among the Housing Activities this year as a part of the annual budget discussions in May, along with projected revenue for allocations to each of the four CRA Housing Funds (see the Process, below). Both the proposed total funding dedicated to affordable housing projects, and the allocation of this amount among different program categories are subject to Board approval as part of the CRA’s annual budget process. Goal of the briefing: Discuss and consider adopting the proposed Fiscal Year 2027 Housing Priorities. POLICY QUESTIONS 1.Does the Board wish to be informed of updated balances in each of the four Housing Funds before making decisions about allocations? The Board also may wish to ask about the plan for dealing with any surpluses or shortfalls in actual revenue compared to the revenue estimates. Will the CRA staff return to the Board for authorization to make changes to the amounts allocated to each Activity, for example, through budget amendments? 2.The Board may wish to ask for an update from CRA staff on guiding policies for the Westside Community Initiative. BACKGROUND AND ADDITIONAL INFORMATION The Process. The guiding polices for the annual Affordable Housing Strategy are the Housing Allocation Funds Policy and the Housing Development Loan Program (HDLP) Policy, which were adopted by the Board in 2021. As outlined in these policies, CRA staff prepares a proposed Strategy—including a resolution and funding allocations—for the Board’s consideration and approval each spring. During the broader City budget discussions (typically in May) the Board finalizes the funding amounts in the Strategy, based on estimated revenue for the coming year. The Housing Development Funding Strategy guides three steps, which are completed as part of the annual CRA budget process: Selecting annual Housing Priorities. Allocating funding for each Housing Activity [for example, the Housing Development Loan Program (HDLP), Assistance for Accessory Dwelling Units (ADUs), and Land Acquisition]. Allocating projected CRA revenue to each of four Housing Funds (Primary Housing Fund, Secondary Fund, Westside Community Initiative Fund, and Housing Development Loan Fund). Page | 2 Page | 3 Housing Priorities. Updated definitions of the five Housing Priorities are as follows: - Deeply Affordable Housing (Threshold Priority): Expand the availability of units for extremely low- income households, thereby providing housing options for individuals or families who are homeless or at risk of homelessness. Deeply affordable housing is generally defined as housing affordable to those earning 30% of the area median income (AMI) or below. - Family Housing with Amenities for Children (Threshold Priority): Provide opportunities for families to enjoy the benefits of urban living by encouraging the development of housing that supports larger household sizes that have at least three bedrooms, and includes family-oriented amenities. - Wealth Building Opportunity: Facilitate the development of residential units targeting low-to moderate income households earning up to 120% of the AMI to build wealth through different pathways such as homeownership, supplemental income opportunities, stipends for renters, cooperative housing, and other wealth-building models. - Expanding Opportunity: Provide affordable housing in areas with positive social conditions that drive health. - Neighborhood Services and Commercial Spaces: Promote an array of neighborhood services and commercial spaces that support the community, such as daycares, restaurants, and retail spaces. This priority ensures that as housing continues to be built throughout the City, residents and neighbors continue to have access to neighborhood services and amenities. Does the Board wish to modify any items on the proposed list of FY27 Priorities? If not, a strawpoll may be in order. Housing Activities. The CRA has identified three “housing activities” that will be used to further the priorities: the Housing Development Loan Program (with its annual Notice of Funding Availability, NOFA); a Wealth-Building NOFA, and Land Acquisition and Disposition. Housing Fund Balances and the Housing Allocation Funds Policy. As noted earlier, Housing Fund balances will be discussed as part of the May Board meeting. The Housing Allocation Funds Policy sets up four housing funds: Primary; Secondary; Housing Development Fund; and Westside Community Initiative. CRA staff account for the revenues, expenditures, interest, payments, and repayments for each fund source separately. The annual budgeting process laid out in the policy includes the Housing Development Funding Strategy. Per policy, the Strategy includes: Limitations of the HDLP Project Scoring Process. In the past, some Board Members have noted that the HDLP scoring process may inadvertently skew funding to larger project sizes and more experienced developers. As CRA staff noted in a 2023 discussion, this is in part a reflection of “other important review standards besides the priorities that projects are evaluated against, such as having other sources of financing secured.” CRA staff also report that the FY26 HDLP guidelines include a section in the evaluation criteria titled “Emerging Developers and Housing Models” which aims to prioritize smaller developers and their projects. The Board may wish to discuss whether it would make sense to have a separate pool of funding and/or scoring criteria that would be available and potentially more appropriate for smaller projects (particularly those that may be eligible based on the City’s recent Affordable Housing Incentives Ordinance). Annual HOUSING Funding Priorities Fy 2026-27 CRA Board Meeting April 14, 2026 ADOPTED Q1 2021 YEARLY BOD APPROVAL HOUSING DEVELOPMENT FUND WESTSIDE COMMUNITY INITIATIVE FUND SECONDARY HOUSING FUND PRIMARY HOUSING FUND HOUSING ALLOCATION FUNDS POLICY HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY This policy established guidelines for allocating/directing resources for housing by funding source. Also requires "Annual Housing Funding Strategy" (right) be brought in front of Board every year. To be included in CRA budget For your approval today To be included in CRA budget $ $ $ $ WEALTH BUILDING OPPORTUNITY FY27 recommended annual housing priorities Seeking Board approval today FAMILY HOUSING w/ AMENITIES for CHILDREN DEEPLY AFFORDABLE HOUSING EXPANDING OPPORTUNITY HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY NEIGHBORHOOD SERVICES AND COMMERCIAL SPACES 2 3 4 5 Source: US Census, American Community Survey 5 Year Estimates 2019-2024 Colliers Retail Q4, Salt Lake County Report (5) HIGHER INCOME HOUSEHOLDS MAKING $75K OR MORE HAVE INCREASED WITHIN SALT LAKE CITY THROUGH THE YEARS, LOWER INCOME HOUSEHOLD MAKING LESS THAN $50K HAVE DECREASED. COMMERCIAL CONSTRUCTION HAS SLOWED, WHILE VACANCY REMAINS LOW PERCENTAGE OF FAMILY HOUSEHOLDS HAVE BEEN DECREASING SINCE 2018 23% OF RENTING HOUSEHOLDS ARE SPENDING MORE THAN HALF THEIR INCOME ON RENT 1 HOMEOWNERSHIP RATE IS GROWING AT A SLOWER PACE THAN RENTALS AND HOMES PRICES CONTINUE TO RISE Data Summary MARCH BOARD DISCUSSION Align CRA’s housing availability map with UHC’s use of the Utah Healthy Places Index/Map Continue to push for mixed-income neighborhoods through the city Evaluate tradeoffs of various policies: Maximize affordable units in the city Focus on smaller-scale developments Develop affordable housing in high-cost areas Avoid concentrating affordable housing in communities with fewer resources Updated map for expanding opportunity Priority: UTAH HEALTHY PLACES INDEX MAP FY27 Housing Activity IMPACT HOUSING PRIORITIES Wealth Building Opportunity Family Housing w/ Amenities for Children Deeply Affordable Housing Neighborhood Services & Commercial Spaces Residential Wealth Building NOFA Land Acquisition/ Disposition Housing Development Loan Program HOUSING ACTIVITIES Expanding Opportunity recommended housing ACTIVItIES Highlights and Policy Implications Housing Development Loan Program NOFA Funding priorities receive higher weighted score and interest rate reductions Ideal for rental housing developments seeking gap financing to leverage LIHTC Results in high number of affordable units for amount of CRA investment Can more effectively support deeply affordable housing than other CRA programs HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY Residential Wealth Building Pilot Program Incentivizes homeownership/wealth building residential units not currently being acheived through the HDLP NOFA Effectively supports smaller-scale developments and family-sized units Suitable for neighbhorhoods in the city that have limited vacant/developable property Yields lower number of total affordable units for amount of CRA investment Typically requires greater subsidies/flexibility for CRA funding HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY recommended housing ACTIVItIES Highlights and Policy Implications Property Acquisition/Dispositions Provides the CRA the most control to establish what is built on properties Allows CRA to achieve multiple housing goals on CRA properties Provides most flexibility out of all the CRA housing activities HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY recommended housing ACTIVItIES Highlights and Policy Implications housing ACTIVItIES to achieve housing priorities Require affordable family housing and/or deeply affordable housing as threshold in Housing Development Loan Program NOFA Increase threshold from 10% to 20% Utilize interest rate reduction benchmarks (Alignment with CRA's Guiding Framework) Provide higher ranking weight when achieving annual priorities HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY HOUSING DEVELOPMENT FUND SECONDARYPRIMARY WESTSIDE COMMUNITY INITIATIVE FUND ANNUAL HOUSING PRIORITIES HOUSING DEVELOPMENT LOAN PROGRAM RESIDENTIAL WEALTH BUILDING NOFA housing fund allocations FY27 ANNUAL HOUSING FUNDING STRATEGY HOUSING ACTIVITIES NEIGHBORHOOD SERVICES & COMMERCIAL SPACES WEALTH BUILDING OPPORTUNITY DEEPLY AFFORDABLE HOUSING FAMILY HOUSING w/ AMENITIES for CHILDREN LAND ACQUISITION/ DISPOSITION EXPANDING OPPORTUNITY $ $ $ $ next steps The CRA Board may consider approval of the FY27 housing annual housing priorities CRA staff will present proposed funding allocations to housing activities as part of the FY 27 budget discussion HOUSING FUND ALLOCATIONS ANNUAL HOUSING PRIORITIES HOUSING ACTIVITIES ANNUAL HOUSING FUNDING STRATEGY